Rooftop solar permits fell 50% on Oahu in ’14

The number of permits issued for rooftop solar systems in Hawaii last year decline 50 percent, the second year-on-year decline.

Despite grim statistics, industry representatives remain optimistic for 2015 as Hawaiian Electric Co. begins to approve customers who have been waiting to install rooftop photovoltaic systems.

The City and County of Hono­lulu issued 6,554 rooftop solar building permits in 2014, compared with 13,303 in 2013, according to data from Marco Man­gels­dorf, president of Hilo-based ProVision Solar. The record year for Oahu permits was 16,715 in 2012.

The total value of the projects in 2014 also declined compared with the year prior. In 2013, Oahu’s PV industry obtained permits showing a total value of $453.65 million. Last year the total value was $200.72 million, a drop of 55 percent, according to Mangelsdorf.

The drop in permits is due largely to a change in HECO policy. In September 2013, addressing potential safety and reliability concerns in areas where rooftop solar had grown rapidly, HECO began requiring customers and contractors to be approved by the utility before installing PV systems.

The ruling was a major setback for the solar industry as homeowners could not move forward with solar installations without the utility’s approval.

In October, HECO took a step toward speeding up system approvals. In an Oct. 31 letter to the Public Utilities Commission, the utility said it had 4,807 solar customers waiting for approval. The utility promised to approve all but a few hundred of those by April and the rest by December 2015.

In the letter, HECO reported that 2,749 customers were waiting approval because the systems were in areas with high numbers of PV systems connected to the grid.

In light of HECO’s efforts to "clear the queue," Jon Yoshimura, director of policy and electricity markets for SolarCity in Hawaii, said he expects the market to stabilize in 2015.

"Our experience in Hawaii was that solar installations were unjustly postponed, to the great frustration of HECO customers who had made the choice to go solar," Yoshimura said. "This is one area for optimism as the cause for decline was partly due to HECO’s concerns that too much rooftop solar was threatening the reliability and stability of its grid infrastructure."

SolarCity and HECO dispelled many of the utility’s fears regarding oversaturation of grid circuits through tests at the National Renewable Energy Laboratory in Golden, Colo., Yoshimura said.

"Simply put, there is more space for rooftop solar on Hawaii’s homes than HECO thought," Yoshimura said.

Chris DeBone, managing partner at Hawaii Energy Connection, said he expects to see a good portion of business come to fruition in 2015 after HECO’s announcement it would approve the backlog of systems.

"We haven’t seen a significant decline in signed sales agreements or public demand," DeBone said, "That’s all new business for us in 2015, and we’re excited about that."

Not all in the industry are optimistic.

Mangelsdorf of ProVision Solar said the industry will face a continued slump in the first four to six months of 2015. "I would very much like to see someone make a credible compelling case for why things are going to get better in the near future," he said.

A weakening consumer demand and challenges with the grid are some reasons the decline may continue, said Mangelsdorf.