SolarCity announced today that the company signed a power purchase agreement (PPA) with Kaua’i electric utility (KIUC). SolarCity already built a 12-megawatt solar array for KUIC which went into operation in September 2014 and now supplies 5% of the island’s electricity, but under the new deal, the California-based solar installer will develop a new solar array and a massive 52 MWh energy storage system to provide electricity when the sun is down.
The deal is pending approval from Hawaii’s Public Utilities Commission, but KIUC has requested to accelerate the process in order to bring the project online by the end of next year.
On the energy storage side, the deal is believed to be one of the biggest of its kind. Neither KIUC nor SolarCity disclosed the dollar amount attached to the project, but based on battery cost alone, the project should be worth more than $13 million.
SolarCity has a deal with Tesla Motors to distribute battery packs for homes (Powerwall) and utility-scale energy storage (Powerpack). Tesla CEO Elon Musk disclosed that the cost per kWh of the Powerpack is $250 for utility scale.
The Powerpack is a tower of 100 kWh of energy storage. The 52 MWh Kaua’i project requires 520 Powerpacks, which as per the price disclosed by Musk would represent $13 million.
The day after Tesla announced its home and utility-scale energy storage products, SolarCity announced that they will use them to offer an option for home owners in Hawaii to go completely off-grid. The announcement came after SolarCity’s customers in Hawaii have reported difficulties connecting their PV systems to Hawaiian Electric Co.’s grid.
Since then, electric utilities are feeling a little more pressure to invest in solar and energy storage since Hawaii made it law for them to adopt 100% renewable energy by 2045.
Under the terms of the new 20-year contract, KIUC will pay SolarCity an electricity rate which they say is lower than the current cost of generation, which in Kaua’i is often from imported fossil fuels, and only “slightly more” than the cost of energy from KIUC’s two existing 12 megawatt solar projects.
SolarCity and KIUC are aiming to begin construction work on the project by April 2016.
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