Solar energy idea gets needed boost

Many residents have been unable or unwilling to invest in a solar water heating system, even with tax rebates, especially in this weak economy. For them, the incentives simply don’t outweigh the costs.

Now Hawaiian Electric Co. hopes to change that balance for qualified residents by covering the cost of the system itself.

This type of innovation, a limited version of "on-bill financing" already under consideration by the state Public Utilities Commission, is long overdue.

The PUC should give HECO’s plan serious consideration. And HECO should work to expand its Simply Solar plan to reach more of its customers, who pay the highest electricity costs in the country.

Simply Solar would not generate as much monthly savings as a system paid for and installed by the customer, who would pay back HECO over 12 years via a surcharge on his or her electric bill. Still, the customer would see some savings during the 12-year period and much more after that.

Gov. Neil Abercrombie praised HECO for what he predicts will "bring much-needed relief to consumers who have been faced with continued rising electricity costs."

Others believe HECO’s plan just scratches the surface of the potential for on-bill financing.

Jeff Mikulina, executive director of the Blue Planet Foundation, supports HECO’s effort, but wishes HECO had embraced on-bill financing years ago. He also prefers that the payments be limited to six years and cover businesses and energy-efficient appliances.

Blue Planet supported a broader bill approved by the state Legislature last year that would have allowed the PUC to approve on-bill financing for purchases of "renewable energy systems or energy efficient devices."

A solar water heating system costs an average of $6,600, which can be reduced to $2,050 due to a $750 instant rebate and about $3,800 savings from state and federal tax credits.

Under the Simply Solar program, HECO would pay an independent contractor for the unit’s installation and maintain it.

In order to qualify for the proposed program, homeowners must never have had a solar water heating system installed in the past. HECO says there are 1,850 potential customers on Oahu, 450 on Hawaii island and 250 in Maui County. Mikulina said he expects more than 2,000 households will sign onto the system upon PUC approval. HECO has asked that it be allowed to sign up households beginning next month.

Hawaii already leads the nation in solar water heaters on a per capita basis, with units now installed in about 85,000 homes.

HECO estimates that a household with a solar water heating system can reduce its monthly electricity consumption by 25 percent to 35 percent. For those entering the utility’s proposed Simply Solar program, HECO estimates households using 600 kilowatt-hours a month would cut their electric bills by $10 to $15 a month.

If Hawaii is going meet its goal of generating 40 percent of its energy from locally renewable sources by 2030, policymakers will have to get serious about reducing the start-up costs for the already strapped energy consumer. HECO’s proposal is a step in the right direction.

Should Simply Solar prove as cost-effective as touted, HECO should look to expand the program to other kinds of solar power and extend it to businesses.