Outcry over new solar rules putting pressure on HECO

Hawaiian Electric Co. continues to be under fire for its Sept. 6 procedural changes for new solar installations.

Two weeks ago, this column covered concerns on the part of consumers that had contracted to install solar systems and on the part of industry leadership. In the meantime, the state Legislature held an informational hearing during which it questioned HECO about its procedural changes and also heard testimony from the Interstate Renewable Energy Council, the Hawaii Solar Energy Association and the Hawaii PV Coalition, ending with a directive to work on a solution and report back next month.

HECO acknowledged that the transition to new procedures on Sept. 6 left many customers that had followed all the company’s rules in what the solar industry calls "solar limbo." This then caused a significant slowdown for many solar installers.

HECO announced on Sept. 6 that consumers wanting to install solar systems first had to get HECO to confirm that the grid in their neighborhood could handle the added solar power. HECO said if the grid needed an upgrade to handle more solar power, the consumers installing new solar systems would have to pay for those upgrades.

This week, I had the opportunity to interview Peter Rosegg, a spokesman for HECO. He said that at the informational hearing, all parties agreed that safety cannot be compromised. Responsible solar installers also acknowledged the utility’s statement that too much solar on a circuit without proper protective equipment risks the safety of customers and utility crews and damage to customer electronics and utility equipment such as lines, transformers and substations. Still, many solar industry leaders are skeptical, saying that HECO is heavily overplaying concerns about safety, reliability and grid penetration.

Delays both for HECO customers and the solar industry are frustrating and costly. The impact of the changed procedures, from the solar industry’s point of view, include 30 percent to 75 percent of their jobs postponed; "millions" lost in revenue; "millions" in commitments to vendors; warehouses full; lost hours for employees; continued payment so as not to lose skilled and hard-to-find electrical journeymen; and six weeks of confusion.

In response, and in an effort to work with the Hawaii Solar Energy Association and PV Coalition, HECO has pledged to try to help some 1,000 customers who may have committed to bank loans, obtained building permits and ordered solar equipment but had not yet notified the utility in advance as is now required.

HECO acknowledges that all customers are facing high electric bills. The utility recognizes that for those able to do so, adding rooftop solar is a way to manage their electricity costs and to contribute to Hawaii’s clean energy future. The good news is that 35,000 solar systems have been successfully connected to grids, mostly in the past two years. More than 70 percent of circuits on Oahu have room for more solar without dealing with studies or reliability upgrades.

HECO is continuing to modernize and upgrade grids, spending $140 million in the first half of this year alone. The grid was designed to provide electricity by means of central distribution out to customers. Clean energy, including solar and wind sources, causes fluctuations that had not been planned for when the grid was built up during the past 100 years.

This week, I also had an opportunity to interview Robert Harris, director of the Sierra Club, Hawaii Chapter. He asserts that the sooner HECO can complete necessary upgrades and create a smarter grid, the sooner safety and reliability will be enhanced. These changes would likely enable a higher percentage of solar penetration and reduce uncertainty for customers and installers. Rosegg agrees that as the grid gets smarter and HECO refines its processes, approval for rooftop installations will become quicker, more equitable and less costly.

While HECO is a major reason for the slowdown, the solar industry is also in the midst of an inevitable industry consolidation. The combination of federal and state tax credits together with bonus depreciation in recent years has fueled a dramatic, unsustainable proliferation in the number of companies in the market. Concurrently, as the Great Recession resolves, investment capital, once vying for solar projects, may be pulling back in favor of other competing opportunities.

During the last legislative session, strong consideration was given to reducing state credits now in place. It didn’t happen. Legislators should let it go. Federal credits begin to phase down at the end of 2016. Tapering state credits now while HECO is also in transition on its policies and its grid is a dangerous prospect. The phasing out of additional federal Safe Harbor and bonus depreciation benefits together with industry consolidation portend substantial headwinds for solar.

The big picture is that modern civilization is quickly realizing that the health of the planet and its inhabitants is, in part, dependent on our collective ability to move beyond petroleum toward a consortium of clean, renewable energy options including not only solar, but also wind, geothermal and hydroelectric sources. HECO’s ability to support this transition to the maximum extent possible is a critical step. The task is huge, but essential. As a society, we will get there in time.

———

Ira Zunin, M.D., M.P.H., M.B.A., is medical director of Manakai o Malama Integrative Healthcare Group and Rehabilitation Center and CEO of Global Advisory Services Inc. Please submit your questions to info@manakaiomalama.com.