Consumers may soon be able to obtain low-cost loans to install solar and other alternative energy systems and then repay the loans through the savings on their electrical bills.
State House and Senate negotiators Thursday reached consensus on an innovative bill that could help middle- and lower-income consumers afford solar. The loans, which would enable consumers to overcome the high upfront costs of installing photovoltaic power systems, would come from a pool of money generated by the same type of bond financing used by utilities to upgrade power plants and respond to storm damage.
The state would issue revenue bonds — backed by fees paid by electricity customers — based on financing orders from the Public Utilities Commission. A new Hawaii Green Infrastructure Authority would use the money from the bond sales to make loans to consumers.
The green infrastructure loan program could appeal to middle- and lower-income consumers who do not have the money to take advantage of the solar tax credits the state now offers as an incentive for alternative energy.
Rep. Chris Lee (D, Kailua-Lanikai-Waimanalo), the lead House negotiator on Senate Bill 1087, called it "a big step forward for renewable energy in Hawaii."
Richard Lim, director of the state Department of Business, Economic Development and Tourism, described the bill, which is up for final votes next week, as "the democratization of clean energy."
Utilities have used the bond-financing tool, known as securitization, for more than a decade to pay for environmental improvements to power plants, respond to transmission-line damage from storms and recover the so-called "stranded costs" at power plants when markets are opened to greater competition.
The bonds are secured by the ability of utilities to charge customers to satisfy the bond debt.
Hawaii could be among the first to use the bond-financing tool to help underwrite solar.
"It’s a game-changer, that’s the best way to put it," said Richard Wallsgrove, program director at the Blue Planet Foundation, a conservation group.
"It’s innovation because we’re taking all of these pieces that people have figured out — rich guys in suits in New York who have figured out how bonds work to finance big projects — and rather than financing coal plants and nuclear power plants, now we’re going to finance rooftop solar, energy efficiency in homes — so, things that are directly going to drive down people’s bills. And anybody can sign up for it. There’s no limit to the impact it could have on our energy infrastructure."
Sen. Donovan Dela Cruz (D, Wheeler-Wahiawa-Schofield), the lead Senate negotiator on the bill, has urged the state to consider incentives for energy other than solar, such as natural gas, because of capacity issues at Hawaiian Electric Co. HECO requires customers, mainly businesses with larger solar projects, to pay for interconnection studies before allowing new installations in regions where solar has reached a 15 percent threshold on the circuit.
"Hopefully, this is a tool that will help us reach penetration goals sooner rather than later," Dela Cruz said of the loan program. "However, once we reach those penetration goals, we need to make sure that there are going to be technologies available so that working families, senior citizens and other local residents will still have access to clean energy but affordable energy as well."
