Four CEOs on Innovation: Connie Lau

Tom Flaherty of Strategy& (PwC): Could you describe what you and your management team have focused on to embed innovation in your business over the last couple of years?

Connie Lau, CEO, Hawaiian Electric Industries: For context, Hawaiian Electric has innovated for many years in renewables and distributed resources. In 2008, our state adopted a forty-percent renewable portfolio standard. In 2015, it was increased to a hundred-percent RPS by 2045. And this year, we have a new carbon neutral law by 2045, plus county commitments for a hundred-percent renewable ground transportation, also by 2045. With that backdrop, many actions that people might think are innovative today, we faced three or four or more years ago.

When we first started, renewables were extremely expensive, and technologies didn't exist to integrate them and to optimize performance of the electric system. However, Hawaii's oil-based and expensive generation helped make renewables more economic and feasible in Hawaii much sooner than on the U. S. mainland. 

We saw that with private rooftop solar. When Fukushima caused oil prices in the Asia-Pacific region to skyrocket, driving up our rates, the payback period for private rooftop solar in Hawaii dropped to two or three years, thanks to federal and Hawaii state tax incentives and full retail net energy metering. Private rooftop solar demand surged.