 Welcome back to Hawaii, the state of clean energy, in case you wondered. This is Jay Fidel and this is Think Tech Hawaii and we have two young men from Hawaiian Electric to discuss Shared Solar and related programs. One is Mark Wong and the other is Mike Ito. Welcome to the show, you guys. Thank you, Jay, happy to be here. So let's talk about Shared Solar because to me it's very exciting. It's really a step forward. It's gonna help, it's gonna make us more resilient. It's a thing that needs to happen and is happening and I'm really happy to see it happen. I think we all will be happy. Mark, can you describe what Shared Solar is and the status of the initiative as it exists? Yeah, happy to do so, Jay. Thanks again for having us on. We're very excited about this program. It's been around for a little while. It was first enacted by the state legislature in 2015 through Act 100. We have gone live with a phase one, which went live in 2018 and we currently have two operating projects with four more to come online soon. Is this related to community solar? It is. So officially in the legislature in the regulatory world, it's known as community-based renewable energy or CBRE. But when we started marketing this and talking with folks, it was really hard to understand what is CBRE? So we started using the term Shared Solar in our phase two of the program, which makes a little more clear to folks. But essentially in a nutshell, we have a lot of customers that aren't able to put up rooftop solar, whether they live in a condo or a rental or they have a big tree over their house. So what this program enables is one of our customers, they can subscribe to a Shared Solar project that's located on the same island that they're located on. And what they do is they essentially buy an interest or a subscription to this facility like buying five panels on a utility scale project. And then they would through a mechanism through their existing electric bill receive line item bill credits that would offset their energy usage. So it's a really great program because folks that couldn't put solar on the roof before can participate and get the energy savings and be a part of the renewable energy movement. Yeah, that's fabulous. We had the low hanging fruit people who all came in. They had the bucks, they put it on the rooftop developers and the installers were happy as they could be. And then the next stage, people said, I don't need that. I'm happy just buying electrical energy from Hawaiian Electric. But in fact, we need to get more solar out there. The solar is a statement of resilience and it's a statement of renewables. And it's important that we do that in order to achieve our target. So, a community solar wasn't doing that much at the beginning, what happened to accelerate it this way and to make it so it's palatable from what you say. This is something that everybody would be interested in. It sounds like it's more flexible. Somehow can you talk about that? Yeah, so the name is community solar. So involving the community is challenging because there's a lot of different interests that can be balanced. And I think one thing that Hawaiian Electric and our regulators have taken in mind that it requires like an editor of reproach to figure out and learn and to improve. So we did a phase one of our program. We got applications that exceeded our original eight megawatt capacity, but we learned some things from it. And as a result, the capacity was greatly increased in phase two to over 250 megawatts worth of capacity. So that made it a lot more attractive for developers to invest and utilize economies of scale to put in larger projects and more projects. So those are some of the things programmically that we looked at as well as looking at improvements for making it easier to interconnect, less expensive, and also working with the communities because many of these projects are cited in areas that require a lot of land. And so we work to make sure that we put in protections and gave visibility and a two-way exchange with the community so we can make sure that these projects are cited in the best way possible. Okay, we're gonna come back and get the details of how it works so everybody knows. But let me talk to Mike for a minute. Now, you're not doing the shared solar. The shared solar does not require an RFP because it's limited to 250 megawatts per hour. So, but you're doing other similar programs, what, that are bigger than that, that do require an RFP? Can you talk about your share of the workload here? Sure, so it's really still part of the shared solar program, but by going through the RFP, we're able to go after larger chunks of, or bigger solar systems. And so we're just conducting those in conjunction with Mark and his team who will be administering the programs, once they're built or selected and built and go through that whole process. But so we're all tied together. It's the same program. It's just again, allowing us to go after larger projects than just under 250 kilowatts. Well, it's the same thing. It's just, you need the RFP because it's not within the 250, but other than that, it's the same kind of thing, right? Same concept and the same grouping of consumers and so forth, am I right? Yeah, so the larger projects will work the same way. So the winning bidders will become the subscriber organizations, just as Mark described, and those subscriber organizations will have to go out and find subscribers who want to participate and take an interest in their project. Yeah, I don't know why, but this reminds me of the Wheeler Doctrine, Mark. You remember the Wheeler Doctrine, they don't talk about it much anymore, but it was in Texas, where somehow, the regulation in Texas is way different as we know. As we know from their last crisis, we know in Texas it's different. But the Wheeler Doctrine was that I could generate power on my house with whatever source I had and I could put a line across the street and sell you the power. And if I did that, Hawaiian Electric or any utility would not be part of it. It would just be between me and my neighbor across the street, and that had all kinds of issues and problems attached to it. But it makes me want to ask you, is it possible to have shared solar, community solar without the utility being involved? Yeah, that was an issue that came up early in our program design. And a lot of these issues had to be worked out. That's why from 2015 to 2018, there was all of these discussions. But I think, you know, for us in terms of Wheeling, we were very careful about that and shared solar is not a form of Wheeling. But, you know, that is something that's being discussed in the community. Right now in my area, we are exploring the concept of microgrids, where customers can create like a hybrid microgrid where they have the ability to disconnect from the grid. But, you know, they primarily stay connected and disconnect just in emergencies. So I think for in terms of Wheeling, we tried to stay away from that. Well, for good reason, for good reason, because you really need to have some intermediary, some overarching organization when you have people who have, may I say, no connection other than the connection. So anyway, I'm just wondering too, what's the difference between shared solar or, you know, of whatever size, RFP or no RFP and a microgrid? Is it the same thing or is it different? Yeah, these will be different. And our current microgrid services tariff, it's actually a rider on top of all of our existing programs including CBRE, but they're very different in that we envision that these phase two projects and phase one projects are going to be connected to the grid all the time. We do have options for energy storage and providing things like ancillary and grid services on to support the grid. Okay, so I wanna do a case study with you. I'm into case studies this week. I ask everybody about case study. So I think I'll ask you about a case study. So my name is Jay, okay? And I have a bunch of neighbors and we call ourselves the redheaded club although nobody can tell I'm redheaded. I actually never was redheaded but we call ourselves the redheaded club. And we actually have a free, you know, an association, an unincorporated association. It's a club, okay? And we live in various parts of Oahu because, you know, we get together, we have our redhead club meetings and everything and we wanna do shared solar and we'll stay within the 250 for this part of the discussion. So, and we think that we wanna do that and we're entrepreneurial in nature. I mean, we wanna be at the cutting edge to what it's about for us. Okay, what do we do? How do we move forward on this kind of shared solar project with all my buddies all over Oahu? That's exactly what we want. And right now it's our call to action is for folks to get together like you're discussing and create subscribe organizations and get more projects, get them on sooner so that we can provide benefits to our customers as subscribers. So if you were interested and you had this group of friends on Oahu and you wanted to get together, you could look at different models like how you wanna help the community. And that's one of the great things about community solar and shared solar is that it allows for a lot of different types of models. So, you know, if you wanted to create a project and site it in Mililani. And you wanted- When you say site it, you mean that's where I am physically putting my solar installation. It could be anywhere in the island. I just have to find a venue for it, right? Exactly. So, you know, that can be a canopy over a parking lot or it could be a rooftop on top of a business or open land. So let's say someone wants to take advantage of that because that space is not being utilized. You could then partner with a developer if you don't have that expertise amongst your group. And that developer would help you basically put together a project that you would submit to Hawaiian Electric to interconnect to our grid. And so assuming you have the financing and capital to pay this developer to work and develop this project for a small project, you would go to Hawaiian Electric's shared solar website. We call it the CBRE portal and that's at communityenergyhoi.com. And we happen to be open for accepting applications. We're doing that in a four month window that concludes on July 11th of this year. What happens in July 11th? Do I turn into a pumpkin? Good question. We hold a four month procurement window so that we can collect all of the proposals for projects. Oh, it's a batch thing. It's a batch thing. Gather them all together and act on them all at the same time. Yeah, so we take the applications and as part of this, you have to determine what your bid is. So you need to bid what the credit rate is that your subscribers would receive. And the idea is that the projects that were submitted first and submitted with the best deal for the subscribers will be given priority capacity in our program. So we have a certain amount of megawatts across our service territory for small projects on Oahu, Maui and Hawaii Island. And in the event that we get more like a lot of applications and it exceeds that capacity for each of those islands, we go through a reverse auction process to determine who we give capacity to. But the capacity alarms are quite large and so we think that there's room for folks to submit applications on it. Why does it need to be a capacity? I mean, as I see it, I mean, you could have unlimited capacity but only be helpful. But why does it need to be a capacity? Part of it I think goes back to the iteration. So we design these windows that are specific in size and we actually, per the direction of our regulators actually increase that capacity from 20 to 30 megawatts on Oahu. But it allows us to kind of like put these in different phases, different chunks. And so we do like this first allotment of small projects and we learn from it and there will be future phases that could include cheese programs. It's kind of pilot. You're testing to see how you can handle this amount of shared solar and then another phase, is that it? Yeah, so we hope that we'll have new things we learn and we'll have future phases. Of sure. It strikes me that one of the things you're gonna learn is how much time and effort you have to put into manage all this. Cause you're dealing with consumers, you're dealing with groups that are not necessarily within your control but who may have questions and problems that you may have to help them with and so forth. So it sounds like to me, one of the issues to look at going from phase one to phase two, I guess this is phase one, going from phase one to phase two is just exactly how much administrative management time it's gonna take to manage these various, am I right? Yeah, that is one of the roles of the subscriber organization, not just building and interconnecting these projects but once it's built and it's delivering electricity to the grid, there is an administrative aspect. So you have to go out and find your subscribers and that's where the different business models come to play. So the Redhead subscriber organization, you could decide to sell subscriptions to people that are in the neighborhood around the project or people that belong to the club or belong to a school or a community organization cause you can decide who your subscribers are just as long as they meet the requirements like being on the same island as the project. So what is the one electric gonna ask me to do? What's the, what are the conditions that I will have to satisfy in order to establish this and get connected and do the project? Well, especially for these types of projects, some level of expertise and experience and I think that's where- Is that by me or by my contractor? By your contractor. So if you had come in and none of the folks in your organization had experience developing, we may not consider the capacity but if you were to partner with someone who did have experience building then you could get in and create this organization. Okay, so you're gonna look to see who's involved and whether they have the experience and so forth. What else do you want from me? So we also wanna make sure that you can do business in Hawaii and those sorts of things. We're gonna go through an application process which is gonna be facilitated through our online portal where you'll have to describe details about the project and we wanna make sure that you're able to administer those subscribers so that you have some sort of a plan to acquire them to market and to serve those customers. Administrative capacity. Does the utility wanna know who my subscribers are? We have the ability to see that because point electrics role in all this is that of an administrator. So we're gonna be making sure that those customers receive bill credits but from a strategic standpoint and the goal objectives we would like to see as many residential and low to moderate income customers as possible. And that's why we're developing this specific low to moderate income RFP and any share solar project can have low to moderate income customers but the LMI RFP is you have to commit to all of those customers being LMI qualified folks. So you wanna make sure that this goes smoothly you don't want it to fail. So you wanna make sure that the administration of it by the red headed club is solid and that we keep good records and so forth. What's the economics? Do I bill me? I'm the executive director of the red headed club. Don't tell anybody. Do I bill my consumers, my end users around the island or do you build them? Yeah, good question. So a lot of the administrative tasks are facilitated through our CBRA portal. So the portal allows subscribers to create a quote customers can log in and create a quote and kind of see what sort of savings they could realize they can see if they're qualified. So our portal will check these customers see if they're a Hawaiian electric customer that they have an account and good standing and things like that. And then they can actually sign up and get a subscription through this portal. One important factor or feature of our program is that it truly is a community program where the agreements are strictly between subscribers and the subscriber organization. Like Hawaiian electric doesn't play a part in that. So there are payments like we envision kind of two models pay up front model where it's analogous to rooftop solar where you have like say $30,000 and you pay a developer to put it up on your roof. But we also have a model called pay as you go which is more like a lease. And that means the Hawaiian electric will actually advance the money to build the facility. Did I get that right? This is just the subscription. So what I'm saying is that a subscriber organization would build the subscriber directly in order to purchase the subscription. Okay, I see, this is only for the subscription then not for the actual construction. It's just, it's the club economics. Yeah, the Reddit club, yes. Let me move to Mike, he'll forget who I am. Mike, you're different than Mark, I know you are. And you require RFPs. So when Mark says that by a certain date, groups have to submit applications and Hawaiian electric is gonna look at them in a batch and decide who would get permission to do a non-RFP shared solar project. It's different for you, right? How does it work for you procedurally? And how does it work for the, what do you wanna call it, the shared solar company and the redheaded club who is actually exceeding 250 kilowatts? Sure, so in a lot of ways it's similar to what Mark described, just the way they have their sort of cutoff coming up in July. We've opened an RFP for exclusively for LMI subscriber projects. So that one opened in March and it'll be open until May 17th. And so developers who are interested in becoming subscriber organizations have that time to put their bids together, submit it through, we have an electronic platform that we take field bids and all the way up until the deadline. And so they have that period to make those projects the middle and sort of just staggered a little bit from that. We have another RFP also for CBRE, but that one is not limited to just LMI subscribers, though even in that one, we do encourage it and give some preferential scoring if you do make those type of commitments. Tony, you have RFPs, you're competing, right? Who's competing for what? You have multiple possibilities for a given project or is it a group project that they're competing for? So similar to like other larger renewable energy procurements that the company has done in the past, it's up to the developers to choose a site. So they can identify any site, they have flexibility on the size of their project. And so depending on what they decide to submit, we can then compare the different ones to see which ones provide the most value to customers. And so that's where the competitive side comes in. If I have my rich headed club, then I wanna get a, and it's more than 250 kilowatts, if I wanna get a developer in, I might say to developer one, two, three, and four, whatever, how many there are available to me, would you guys please submit RFPs to Hawaiian Electric? And then what, Hawaiian Electric will look at what you're proposing and decide which ones of you is the best one for this site for the red headed club, how far off am I when I describe it that way? So when you submit it, it would sort of be a package deal. So the red headed club would be partnering with the developer, whatever other experts you need to provide a proposal. And so that proposal would then compete against the other proposals that we receive. For that site, for that site. No, just for, well, it's for that island. And so again, there's flexibility on, you can choose a site wherever you want to throughout the island and make your submittal based on that. But is it just for my club or for all of the solar installations under this program? So in this case, it would be like your club is making a bid or a proposal. So you would have already partnered with whoever else you need to a solar contractor, whatever other expertise you need to put this together. And together you'd be submitting a single bid that would compete against other folks similar to yourself that have put together proposals for other sites. Okay, so your deadline for this is, would you say it was May sometime? Yeah, May 17th for the LMI RFP. That's my lucky day, by the way, just in case you're wondering. But on the other hand, Mark's program, the one Mark was describing, the deadline is July 11th. That's my other lucky date. And so you're faster. Why is your deadline so much earlier than July 11th? There's no particular reason for the differences. We've just structured the RFPs to be able to allocate enough time to get proposals to bid in. And like I said, then there'll be a subsequent one shortly after that for non, that's not required to be LMI subscribers. So there's a couple of opportunities for folks to bid into the larger projects as well. Okay, so, and this is all part of the phase one that we're talking about, right? The phase is the same for both the 250 and the above 250, right? I believe technically this is considered phase two, Mark, you can correct me if I'm wrong, but this is phase two. Phase one was the smaller one, but there were no RFPs or larger projects as part of that one. So when will it all be settled down? When will you know? When will they know? When will the redheaded club know? When it's all, when we're ready to build, for example. Well, if it's related to, if you was for the LMI RFP, then we go through the process of evaluating the projects and making our selections. And that's targeted to be mid November of this year to award for that RFP. Okay, then I have all my papers. I'm ready to go. Or do I need something else? I need a, what a building permit beyond that? Yeah, there'd probably be a number of permits and, you know, that's actually part of our review process to ensure that the folks providing the bids are aware of what they have done. They're sort of due diligence to make sure they know what they need to do even once we do give them that award for that project so they can, you know, move quickly to get that project online. So have you received any RFPs so far? The way our system works is it's all blind for us. So we don't get to see what's been submitted until the deadline passes. Okay. All right, let's go back to Mark for a minute. So Mark, how much of what Mike said you agree with on a percentage basis? A hundred percent, 110 percent. What would you add to that, you know, as compared between the two, you know, 250 plus 250 more? Well, I think, you know, generally shared solar is a new concept and, you know, it's starting to get up to speed on the mainland too, and it's complicated. So I want to make a plug for a virtual session that we're going to be having tonight at 6.30 you can email sharedsolarathoineelectric.com to get the information to log in, but we'll be holding more of these sessions. We have another one on April 13th. So we invite anyone who's kind of wanting to learn more kind of on the fence or kind of looking at this, we'd be happy to explain a little bit more about it. Oh, that's so great. So they're in Dippinus. That's two hours away. I'm so glad. That's perfect timing. Perfect timing, yeah. What are you going to cover? We're going to cover some of the aspects about the program in a little more detail, kind of what questions you asked like, what does this look like for the redheaded club? What do I need to do to take my next steps to make this happen? Well, I, you know, I use that as a case study because the redheaded club is not a, it's not a reason for having a business organization. It's pretty social if anything. And they may not know each other that well and so forth. The reason I raise it and suggest it as a case study is that really anybody can do this as long as I get together and make a viable organization and have some administrative, you know, administrative function, then I can approach you. And, but here's the question I'll put to you, both of you. Why? Why would I do that? Why would I use the shared solar, community solar, no avenue at this point rather than any other? For just like any renewable energy project, there's going to be a business model out of it. So, you know, folks can do that, but primarily the program is to help your community out. That's why we want these projects to be kind of born out of the community. And it's really to help your neighbors, help your, you know, the people of the state of Hawaii realize the goals and realize energy savings at the same time. Because right now the energy future isn't equal. And this kind of evens the playing field. Yeah, it allows me to get a piece of solar even though I wouldn't otherwise do it. That's the tremendous, tremendous benefit. But let me turn to Mike. Now with Mike, you're talking about RFPs, RFPs presumably are competitive in the sense of rates. So when the RFPs are dropped on your desk after the deadline, of course, you're going to compare them for rates and you're going to pick the rate that is most attractive to the consumer. So presumably, I'm only asking, I'm guessing here, presumably the consumer who is in one of your projects, Mike, lower rate because of that competition. Am I right? So when we do make the selection for the project, you know, for the winning projects, it does take into consideration the price of the proposal is obviously important part of it. There are other non-price criteria that we look at, including like I think Mark touched on earlier with experience and the other ones include like community outreach plans and cultural resource impact. So we want to make sure again that these projects are friendly for our communities as well. So it's not just price, but in the end, the energy that is created from these projects serves really all customers, not certainly those who are subscribed have a specific interest in it because they'd be the one with the subscription to the project. But this energy obviously serves all of our customers. So we still want to try to ensure that, you know, we're paying a competitive price for the energy that's going out across the grid. So here's my last question to you, Mike. So my red-handed club only needs like 240, was it megawatts now? Megawatts, kilowatts? Kilowatts, kilowatts. It only needs 240, but you know, and if you tell me I'll be better off if I do 260, maybe I'll do that. Should I do that? I'll get some more subscribers. I'll get people maybe who are blonde instead of red-handed, I'll give them a waiver. They don't have to be completely red-headed, okay? They can join my group. Are they better off? Are we better off? My group, is it better off to get more and cross that threshold? Don't worry, Mark, I'll give you a chance to comment on this too. You know, participating in the competitive bidding side of it, it's hard to say because you don't know who your competition is until after the bids are unsealed. So, you know, it could go either way from us, from our perspective, obviously we want to get as much community solar going as we can. So, we'd encourage folks to take the leap, but you know, there are differences and so it may work one way or the other. I think you'd have to really dig into the details a little bit, but the more the better for us. Okay, yeah, I would certainly want to consider that. You know, if there's a real benefit in getting 5,000 members of my, I don't think there are 5,000 red-heads in all of Hawaii, by the way, let's assume I have the ability to get 5,000 people that I might want to consider that. I think I'd have to do the sharp pencil and all that, but I might want to consider that. Interesting possibilities. So, Mark, your opportunity to comment on this really interesting choice of determining the number of people in my club and the amount of capacity they want to buy. Yeah, well, again, I agree with Mike. The larger projects are going to be able to serve more customers and they're probably taking advantage of economies of scale and things like that, but 250 kilowatts is that magic number. Once you go above that, you have to compete through the RFP process and that may not be for everyone. The advantage of the lesson, it'll take longer, yeah, more resources, that sort of thing, but it is a good process. A lot of the community members we spoke to like that because it provides a lot of transparency from the bidder, but if you're looking for a more streamlined process that is quicker, below 250 kilowatts has its advantages to being able to go through an interconnection process faster and getting those projects online sooner. And that's actually one reason that the capacity for small projects was increased because we recognized that there's an opportunity to get more projects in that. Yeah, I get the same feeling from just talking with you for a few minutes here. Well, thank you very much, Mark and Mike. Thank you very much for joining us on Think Tech and discussing this. I hope you have a good session at 6.30, that's two hours away, no pressure. And I hope we can talk to you about this and related projects again soon. Thank you, Mark. Thank you, Mike. Thanks for the opportunity. Aloha. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter and LinkedIn and donate to us at thinktechhawaii.com. Mahalo.