Hawaiian Electric Industries Inc. (HE) has entered into an agreement with SunPower Corporation (SPWRA) to purchase solar photovoltaic (PV) power. Under the fixed price contract of 20 years, SunPower will generate the power from a five-megawatt (MW) solar farm.
SunPower will design, build and operate the farm at Kalaeloa in West Oahu on a 40-acre land leased from the Department of Hawaiian Home Lands (DHHL) at Roosevelt Avenue and Boxer Road. Following a nod from the Hawaii Public Utilities Commission and other needed approvals, SunPower plans to begin construction in 2011 and complete the solar farm within five months.
To generate power, SunPower will install high-efficiency solar panels on a SunPower Tracker system. The Tracker positions solar panels in such a manner that it follows the sun’s movement during the day and increases sunlight capture by up to 25% in comparison to conventional fixed-tilt systems. The system also reduces land requirements to a large extent.
The solar farm is expected to produce enough renewable power to avoid almost 11,000 tons of carbon dioxide emissions per year, which is equivalent to removing 37,600 cars from Hawaii’s roads over the 20-year term of the power purchase agreement.
Other projects at Oahu pertaining to renewable resources include expansion of a waste-to-energy plant, development of a waste gasification plant, a new wind farm, renewable projects existing and being developed under the Feed-in Tariff and an enlarged Net Energy Metering program. Other ventures in the renewable space also include biofueling of new and existing power plants.
The performance of Hawaiian Electric is steadily improving through operational excellence, constructive regulatory outcomes and a focus on enlarging its renewable portfolio. However, the company has yet to earn the approved ROE for its regulated utility assets. In addition, lower electricity volume sales, a tourism-dependant Hawaiian economy and uncertainty over the sustainable strength of the Japanese economy continue to weigh on the stock’s valuation. The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.
Based in Honolulu, Hawaiian Electric Industries Inc. is a holding company with subsidiaries engaged in the electric utility, banking and other businesses operating primarily in the State of Hawaii. The company mainly competes with The AES Corporation (AES) and Constellation Energy Group, Inc. (CEG).
AES CORP (AES): Free Stock Analysis Report
CONSTELLATN EGY (CEG): Free Stock Analysis Report
HAWAIIAN ELEC (HE): Free Stock Analysis Report
SUNPOWER CORP-A (SPWRA): Free Stock Analysis Report
Zacks Investment Research
