"Greed, for lack of a better word, is good. Greed is right. Greed works."

— Gordon Gekko In the 1987 film, "Wall Street"

Looking at the solar electric industry in Hawaii, it appears that many in this business have taken this philosophy to heart.

Taking advantage of years of muddiness regarding the state solar tax credit statutes and with the support of the overworked Department of Taxation trying, and failing, to play the "solar police," photovoltaic companies and their customers have been able to get away with a lot over the past several years.

If anyone thought that the total hit from these tax credits on the state’s general fund from 2011 was a large amount — which it was — that figure will be a fraction compared to what the record sum will be for 2012.

With the advent of microinverters in 2008 and the recent reductions in system prices, PV integrators began pushing multiple "independent" systems to homeowners with the pitch that the homeowner could double, triple, quadruple or more the number of systems that could qualify for the maximum $5,000 per system state tax credit.

What’s been lost in this discussion is the purpose of the original tax credit law, which was never to promote rampant multiple dipping. In effect this loophole in the interpretation of the tax credit law has been big enough to drive a cane truck through. Again, this was never the intent of state House and Senate members who supported and passed this legislation years ago.

The other notable recent development on the solar tax credit front is the investigation launched by the U.S. Treasury and Internal Revenue Service into accounting practices by California-based SolarCity. Federal officials are looking into whether SolarCity may have over-inflated the fair market value of PV systems for cash grant and tax credit purposes.

How could such a practice work? Say the cost to install a PV system is $3.50 per watt. For a cash sale to a homeowner, the purchase price of that system could be in the $6-$7 per watt range. For that same identical system installed on a neighbor’s roof through a third party-financed deal, the value of that system is claimed to be in the $9-$10 per watt range for cash grant or tax credit purposes.

The net effect of limiting or eliminating multiple tax credits per home or facility and the exponential growth of PV systems pushing an increasing number of utility grid circuits to saturation is leading to the likelihood that the number of solar electric systems installed across the state will top out soon if it hasn’t already done so this year.

As the frantic sales pace inevitably slows down, there will be a serious consolidation in the state’s solar electric industry. Those companies not saddled by substantial debt that are able to downsize in a managed and sustainable fashion, and find revenue sources not based on new system sales, will survive. Many others will not, at least not in anything close to their current form.

The explosive growth of PV system sales across Hawaii over the past several years has helped tens of thousands of homes and businesses become more energy independent. It has reduced the amount of imported fossil fuels needed in our isolated state. It has provided jobs and fueled a white-hot construction trade.

And, unfortunately, it has led to and encouraged the practice of pushing the limits and, it appears, going beyond them in search of closing more sales and making more of a profit. These practices will likely lead to corrective actions that will tarnish the industry in the eyes of elected officials and the public. And we in this line of business will have to collectively bear some of the responsibility and consequences for that greed.