The Public Utilities Commission has approved the first grid-scale solar and battery energy storage project to be built on Molokai.

The 2.64-megawatt project, including a 3-MW battery energy storage system, will be owned and operated by Molokai New Energy Partners, which will sell electricity to Maui Electric Company. It is expected to be in service by the end of 2019.

With Federal New Market Tax Credits approved through Punawai O Puuhonua, a Hawaii-based community development organization, the project is expected to provide savings to the island’s 3,200 customers every year of the 22-year contract. The project will deliver energy at about 17 cents per kilowatt-hour, less than the present cost of diesel generation. Maui Electric makes no mark-up and takes no profit on electricity purchased from independent power producers like MNEP.

“As this solar and battery project moves forward, we recognize there is still much to be done in our efforts to reach 100 percent renewable energy on Molokai,” said Sharon Suzuki, president of Maui Electric. “We’ll be seeking more affordable renewables to power the island and look forward to continue working with the Molokai community, policy makers and renewable energy developers to achieve this ambitious goal.”

As a community development entity, Punawai O Puuhonua manages New Market Tax Credits that support creation of jobs, goods and services in lower-income communities in Hawaii.

“We are grateful to have the New Market Tax Credit resources that can support the economic feasibility of a Molokai project,” said Pono Shim, manager of Punawai O Puuhonua. “During the community engagement meeting a young father shared, ‘This project is really for my daughters…If our parents had done something like this 20 years ago it would have been for us, and this one is for the current children.’ We support and appreciate his foresight.”

The facility will be located on vacant industrial land owned by Molokai Ranch and leased by MNEP, adjacent to Maui Electric’s Palaau Power Plant.

“Molokai New Energy Partners is very pleased with the recent decision by the PUC regarding our solar and battery storage project,” said Charles Magolske, executive vice president of corporate development for Molokai New Energy Partners. “We look forward to progressing the construction of this project and bringing lower cost clean solar power to Molokai.”

Molokai has one of the highest levels of customer-sited solar power in the state, raising concerns for system reliability on the small island grid. The Molokai New Energy Partners’ project includes 4.88 MW of solar panels and its 3 MW/15 megawatt-hour battery system has the potential to store energy and discharge up to 2.64 MW during peak demand periods, such as the early evening hours.

Maui Electric is taking a multi-pronged approach to helping the island community reach the 100 percent clean energy goal. This includes continuous outreach and discussions with the community; alternative financing possibilities through available tax credits and third-party grants; innovative utility-sited solutions and new customer options to prepare the Molokai grid to take on more renewable energy.