popular articles

Clearway cancels solar projects in Hawaii due to Hawaiian Electric’s financial risks

Clearway cancels solar projects in Hawaii due to Hawaiian Electric's financial risks

Please share:

Clearway Energy recently decided to cancel three power purchase agreements (PPAs) for solar projects with Hawaiian Electric, citing concerns over the utility’s financial stability. This decision follows significant financial losses Hawaiian Electric incurred due to litigation surrounding the August 2023 wildfires, which devastated Maui and destroyed the town of Lahaina. These disasters have led to estimated rebuilding costs in the billions, worsening the company’s financial position.

Leo Asuncion, chairman of the Hawaii Public Utilities Commission, confirmed this cancellation during a panel organized by the National Association of Regulatory Utility Commissioners. According to him, this decision could be an alarming sign for the future of renewable energy projects in the islands. Clearway, which was set to supply nearly 200 MW of solar energy via the Makana La Solar, Kaiwiki Solar, and Puako Solar projects, was one of fifteen developers selected in a request for proposal (RFP) issued by Hawaiian Electric.

Increased risks to the state’s energy targets

Asuncion expressed concerns that this decision could trigger a domino effect, prompting other renewable project developers to reconsider their commitments. “If other developers follow Clearway’s example, Hawaii might miss its renewable energy transition targets,” he warned. Hawaiian Electric currently aims to achieve over 40% renewable energy in its portfolio by 2030, a goal the company still believes is achievable despite this recent setback.

Hawaiian Electric spokesperson Darren Pai emphasized that the company continues to negotiate with twelve other projects selected in the same RFP, with commissioning scheduled between 2026 and 2033. However, the company is now seeking legislative measures to bolster investor confidence by guaranteeing payments to renewable energy producers, even amid financial challenges.

A strategy to appease investor concerns

In a context where wildfire-related litigation resulted in a $104.4 million net loss for Hawaiian Electric Industries (HEI) in the third quarter, HEI, Hawaiian Electric’s parent company, recently raised over $550 million through a stock issuance to fund settlement agreements. Despite this capital infusion, the company remains under scrutiny due to its substantial debt and significant financial obligations.

Clearway Energy, which continues to operate four renewable energy projects on Oahu, stated in a press release that it is ready to resume negotiations once Hawaiian Electric’s financial situation stabilizes. However, the group remains attentive to sector developments, as Hawaii’s public utility regulator has initiated actions to strengthen infrastructure resilience against wildfires, including risk mitigation and forecasting plans.

A financial model under scrutiny

The current situation raises broader questions about the financial viability of utility companies facing natural disasters and costly litigation. Hawaiian Electric recently closed a funding cycle to cover part of the litigation costs through four installment payments. However, this stabilization strategy does not seem to reassure all business partners, and the impact on future investments remains uncertain.

Amid this financial and regulatory tension, Hawaii’s energy sector leaders fear that additional project delays or cancellations could hinder the state’s energy transition. Clearway’s case could thus mark a turning point, underscoring the need for utilities to strengthen their economic models to meet the growing challenges of climate change.

Register free of charge for uninterrupted access.

Publicite

Recently published in

The US solar industry is expected to add 502 GWdc of capacity to the market by 2035. However, political uncertainty could jeopardize these projections, putting future investments at risk.
The UK government has introduced an amendment aimed at preventing its public company from buying components linked to forced labour, which could impact the supply of Chinese solar panels.
The UK government has introduced an amendment aimed at preventing its public company from buying components linked to forced labour, which could impact the supply of Chinese solar panels.
CATL introduced several innovative batteries for electric vehicles, including the Naxtra, the first series-produced sodium-ion battery, and the Freevoy, marking the entry into the era of multiple power sources.
CATL introduced several innovative batteries for electric vehicles, including the Naxtra, the first series-produced sodium-ion battery, and the Freevoy, marking the entry into the era of multiple power sources.
Meyer Burger announces the introduction of short-time work at its Thalheim site starting May 1, 2025, affecting 300 employees due to temporary material shortages required for solar cell production.
Meyer Burger announces the introduction of short-time work at its Thalheim site starting May 1, 2025, affecting 300 employees due to temporary material shortages required for solar cell production.
After a one-year interruption, the Noor Ouarzazate III solar plant, with a capacity of 150 MW, has been brought back into operation by the Masen group. This event highlights Morocco's ambitions in renewable energy and energy transition.
Algeria explores a partnership with Chinese giant LONGi to launch local solar panel production. This initiative is part of the country's energy diversification strategy.
Algeria explores a partnership with Chinese giant LONGi to launch local solar panel production. This initiative is part of the country's energy diversification strategy.
The United States plans to impose heavy tariffs on solar panels from four Asian countries, citing transnational subsidies supported by China.
The United States plans to impose heavy tariffs on solar panels from four Asian countries, citing transnational subsidies supported by China.
Chinese group Das Solar begins construction of its first European factory in Mandeure, with an initial 2 GW capacity and the planned creation of 600 jobs.
Chinese group Das Solar begins construction of its first European factory in Mandeure, with an initial 2 GW capacity and the planned creation of 600 jobs.
EDP (Energias de Portugal) expands its German portfolio with a second 65 MWp photovoltaic complex. Carried out with Kronos Solar EDPR, this initiative supplies nearly 22,000 households and marks a step forward in its European growth strategy.
Recurrent Energy launched operations of a 127 MW solar site in Louisiana, marking a strategic first entry into a state with strong industrial energy demand.
Recurrent Energy launched operations of a 127 MW solar site in Louisiana, marking a strategic first entry into a state with strong industrial energy demand.
AXIAN Energy has entrusted Voltalia and Entech with the development of a 60 MW solar plant combined with 90 MWh storage in the Kolda region, scheduled to be operational by 2026.
AXIAN Energy has entrusted Voltalia and Entech with the development of a 60 MW solar plant combined with 90 MWh storage in the Kolda region, scheduled to be operational by 2026.
Atlas Renewable Energy has signed a power purchase agreement with Chlorum Solutions to power its chemical operations in Brazil with 24 MW of solar energy from the Draco complex.
Atlas Renewable Energy has signed a power purchase agreement with Chlorum Solutions to power its chemical operations in Brazil with 24 MW of solar energy from the Draco complex.
Kosol Energie has completed a 10 MW solar power plant in the Kutch desert, relying on GoodWe inverters to optimise energy output under extreme climate conditions.
EDF Renewables and Power Sustainable secured financing for Desert Quartzite, a 375 MW solar power plant with storage, located in California and operational since December 2024.
EDF Renewables and Power Sustainable secured financing for Desert Quartzite, a 375 MW solar power plant with storage, located in California and operational since December 2024.
Catalyze has secured an $85 million tax equity investment from RBC to support the development of 75 MW of commercial and community solar projects across the United States by the end of 2025.
Catalyze has secured an $85 million tax equity investment from RBC to support the development of 75 MW of commercial and community solar projects across the United States by the end of 2025.
The New York-based developer has received permission to operate Troy Solar I, a 995 kW power plant connected to the Central Maine Power grid.
The New York-based developer has received permission to operate Troy Solar I, a 995 kW power plant connected to the Central Maine Power grid.
US manufacturer ES Foundry has signed a three-year, 150 MW supply agreement with a community solar developer to reinforce its domestic supply chain and support the expansion of the solar market in the United States.
The Ethiopian Prime Minister’s visit to TOYO’s factory in Vietnam signals a new phase in energy cooperation with the Japanese group, focusing on industrial expansion in Ethiopia.
The Ethiopian Prime Minister’s visit to TOYO’s factory in Vietnam signals a new phase in energy cooperation with the Japanese group, focusing on industrial expansion in Ethiopia.
Niger is increasing its reliance on solar energy to offset the reduction in Nigerian electricity exports, a direct consequence of diplomatic tensions following the regime change in Niamey.
Niger is increasing its reliance on solar energy to offset the reduction in Nigerian electricity exports, a direct consequence of diplomatic tensions following the regime change in Niamey.
DTE Energy has begun construction of a new solar park to provide Ford Motor Company with 100% renewable electricity for its manufacturing sites in Michigan.
DTE Energy has begun construction of a new solar park to provide Ford Motor Company with 100% renewable electricity for its manufacturing sites in Michigan.
UK commercial and industrial solar specialist Atrato Onsite Energy has finalised a structured financing agreement with Barclays to support the expansion of its photovoltaic asset base.
Matrix Renewables and rPlus Energies have completed the commissioning of Pleasant Valley Solar 1, a 261 MWdc project located in Ada County, Idaho, now the largest solar facility in Idaho Power’s network.
Matrix Renewables and rPlus Energies have completed the commissioning of Pleasant Valley Solar 1, a 261 MWdc project located in Ada County, Idaho, now the largest solar facility in Idaho Power’s network.
The first phase of the 500 MW photovoltaic project in Yingjisha has been commissioned, marking a key milestone in expanding solar capacity in the Kashgar region.
The first phase of the 500 MW photovoltaic project in Yingjisha has been commissioned, marking a key milestone in expanding solar capacity in the Kashgar region.
Groupe VALOREM secured €22mn in funding with Arkéa Banque to develop 63 rooftop photovoltaic plants in Nouvelle-Aquitaine and Occitanie, consolidating its model in a shifting French solar market.
Groupe VALOREM secured €22mn in funding with Arkéa Banque to develop 63 rooftop photovoltaic plants in Nouvelle-Aquitaine and Occitanie, consolidating its model in a shifting French solar market.

Advertising