How Hawaii Residents Could Save Billions by Going Renewable

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Hawaii-Off the Grid
Caleb Jones/APSolar panels on the roof of a home in Honolulu. Hawaii is looking to reduce the state's dependence on fossil fuels.
By 2045, Hawaii would like to be the first state in the U.S. getting all of its energy from renewable sources. It's a lofty goal, but one that could keep $5.1 billion in the Hawaiian economy instead of it being spent on foreign oil.

It's a transformation that's already taking place in the state, which has the highest cost of electricity in the country. How Hawaii handles the renewable revolution could lay the foundation for a greener energy infrastructure throughout the U.S. -- while saving each of the state's residents thousands each year.

Hawaii's Dependence on Fossil Fuels

As an island state, Hawaii is dependent almost entirely on imported coal and oil for its electricity generation. This has resulted in rising energy costs as oil prices have risen, leading to electricity prices that are nearly three times the national average, at 30.2 cents a kilowatt-hour compared to 12.9 cents a kwh nationwide.

Source: U.S. Energy Information Administration
The solution to this problem is generating more energy in-state and reducing energy imports. With residential rooftop systems now available for 15 cents a kwh or less -- less than half of the cost of electricity in Hawaii -- it makes sense for most homeowners to go solar. And with utility-scale wind and solar projects being built for 6 cents a kwh, it seems like a natural time to make a massive commitment to renewable energy.

The potential cost savings for customers is what's really amazing about Hawaii's goal: The $5.1 billion in projected savings would work out to $3,591 a resident a year if it were spread out evenly.

Challenges in Getting to 100 Percent Renewable

Of course, getting to 100 percent renewable energy can't be done by simply flicking a switch. Even if Hawaii could generate enough wind, solar, and wave energy on an absolute basis to power its state, there would be the issue of timing. For example, the sun isn't always out and the wind isn't always blowing. So, a network of energy storage and smart devices would have to be built out to keep the lights on.

Hawaiian Electric (HE), the state's publicly traded utility, has a plan to install up to 200 megawatts of energy storage on Oahu by 2018. And regulators are now pushing to advance these kinds of technologies even faster -- but there's a lot of work to be done.

If Hawaii can create a grid infrastructure through which there's enough renewable energy to power the state, a large amount of energy storage, and enough demand response to make supply and demand balance, it could create a framework for the grid that could be copied around the country.

Renewable Energy Could Save Billions

The cutting edge of renewable energy isn't as costly as it was even a year or two ago, and for Hawaii, setting a goal such as 100 percent renewable energy by 2045 isn't as crazy as it seems. In fact, it could be a big money-saver for the state's residents.

And if Hawaii does renewable energy right, it could show the rest of the country how to make renewable energy work on a grand scale. The country's island state could actually show us the future of energy, on the way to saving billions of dollars on oil imports every year.

Travis Hoium is a Motley Fool contributor. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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