I have noticed several trends in the electric power market which I find very intriguing. The first is the development of distributed power generation. I am not referring to the growth of the large merchant power generators, but the growth of the individual residential power generators. My sister and brother-in-law live in Hawaii. They installed a solar cell array on their home. The solar cell array generates surplus electric power during the day, resulting in negative metering during the day. During the evening and at night the house draws power from the Hawaii Electric power distribution grid. The arrangement with Hawaii Electric is that the electric power that is distributed into the Hawaii Electric grid is applied as a credit up to the amount drawn from the grid during the periods that the solar cell array is not generating electric power. Assuming that the solar cell array has been sized to generate excess electric power over and above the peak daytime power requirements, Hawaii Electric is receiving essentially “free” electric power during the solar power generating period. I would guess that the kilowatt hour rate for electric power from Hawaii Electric is among the highest in the nation. The return on investment for the residential installation is probably very attractive.
This arrangement leads to some interesting questions regarding the future of electric power distribution by electric utilities.
Since Hawaii has minimal heavy industry (the exception being the various military bases), the peak requirements for electric power would be typically in the early morning and evening/ night when residential usage peaks. Does this match the distributed power generators anticipated contribution to the grid?
Should electric power storage be added to residential distributed generation sites minimizing the electric power draw from the grid, does it make sense to charge the electric power billing method to a basic “connection to the grid” fee plus usage per kilo watt hour rate?
How does Hawaii Electric manage the large numbers of distributed electric power generator sites adding power to their distribution grid (low voltage) versus the transmission grid (high voltage) designed for this purpose?