The residential solar space is in flux. If you’re a consumer who would like to put photovoltaic (PV) on your roof and get relief from your electricity bill, it’s not quite as simple as calling up a contractor and flipping a switch shortly after. Since HECO implemented a 2013 policy to slow down installation of new solar rooftop systems, permits issued for these systems have declined by 50 percent. I suspect HECO’s pending acquisition is not helping things. Acquisitions are by nature messy and distracting for employees.
The good news for the consumer is that the state’s 35 percent renewable tax credit is still available for homeowners, as is the Fed’s 30 percent personal tax credit (until Dec. 31, 2016). That’s a sweet deal. For now the solar tax credit in Hawaii seems safe, but, of course, laws can change and the clock is ticking on the Federal incentives.
Does that mean there’s plenty of time left to get your system?
Certainly not at the old rates.
There are thousands of people waiting to get their rooftop systems approved in order to get the coveted NEM (net energy metering) status that translates into low electrical bills. In November HECO announced a plan to clear the logjam of customers awaiting approval for rooftop solar systems in neighborhoods with high amounts of solar already installed. This plan, in effect, would approve about 90 percent of the roughly 2,500 applications in high-use areas by the end of April. According to HECO, the 10 percent of the applicants who don’t make the cut in these saturated areas might have to wait as long as the end of the 2015 for approval.
On Feb. 23 HECO issued an update saying there are still 2,193 customers in high-use areas waiting for clearance. The electrical company says they will honor current NEM agreements with existing rooftop solar owners and those with pending applications.
For those who haven’t yet applied, the story will be different. Here’s why:
HECO intends to end retail net energy metering and replace it with an alternative tariff structure. However, this new Transitional Distributed Generation (TDG) has not been approved by the state Public Utilities Commission. The proposed agreement will put a cap on NEM agreements, so new applicants might not get the low rates.
"Instead of being credited the retail electricity rate, Oahu rooftop solar owners would get an estimated TDG tariff rate of about 40 percent less," says Leslie Cole-Brooks, executive director at Hawaii Solar Energy Association.
Under the proposed TDG rate "it will take longer to amortize your system," says Myron Thompson, CEO of Solar Cool Hawaii, whose company has shifted from focusing strictly on PV to thermal air-conditioning technology.
Cole-Brooks says, "It’s still a great deal even with the TDG rate because you’re taking charge of your electric bill and you’re going have a hedge of what’s going to happen to your electric bill into the future."
On Feb. 28 the PUC released a statement that has been interpreted as ordering HECO to begin issuing NEM agreements for all those pending. In response to the letter, Robert Harris, Hawaii representative for the industry trade group, the Alliance for Solar Choice, said this "clears one of the major roadblocks" to deploy solar in Hawaii and allows for penetration levels unheard of throughout the United States.
Careful reading of that letter makes it hard to see much change. Basically, HECO has only agreed to provide formal documentation if requests are refused. They are still in control.
The bottom line: If you’re interested in PV, it’s better to get your application in sooner rather than later. However, given the muddled state of affairs, if you live in a high-use PV area, there’s no guarantee you will get your system any time soon or at all, much less at a preferential NEM rate.
The only guarantee in life is death, taxes and higher electrical rates.
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Mike Meyer, formerly Internet general manager at Oceanic Time Warner Cable, is now chief information officer at Honolulu Community College. Reach him at mmeyer@hawaii.edu.
