The City and County of Honolulu issued 36 percent more building permits for solar systems in October than a year ago, as the Public Utilities Commission cut a popular solar incentive program.

October marks the eighth straight month of year-over-year increases in the number of photovoltaic permits issued on Oahu. The city issued 720 permits, up from 518 in October 2014, according to data from Marco Mangelsdorf, who tracks rooftop solar permits and is president of Hilo-based ProVision Solar.

Mangelsdorf said October will most likely be the last month of such an increase due to the end of Net Energy Metering, the solar incentive program that credits solar owners the full retail rate for the excess energy they send to the grid.

"The statewide solar electric industry will take a sales and revenue hit due to the transition away from NEM," Mangelsdorf said.

On Oct. 12 the state PUC reduced the credit that new rooftop solar owners on Oahu, the Big Island and in Maui County will receive for the excess energy their photovoltaic systems send to the grid. Current solar owners and those who applied by Oct. 13 will be grandfathered in.

Hawaiian Electric Co., the utility serving Oahu, Maui and the Big Island, is replacing Net Energy Metering with grid-supply and self-supply programs. Through grid-supply, customers are credited approximately 15 cents per kilowatt-hour for the excess energy their systems send to the grid — a 10-cent reduction from the current retail rate offered to NEM participants. Grid-supply has a minimum charge of $25, while NEM had a minimum of $17.

Under the self-supply program, solar customers will not export energy to the grid. Energy storage systems, such as batteries, will consume all of the excess energy produced by their solar systems. If a system can’t power a home at any time, a customer can draw power from the grid. The PUC ordered that self-supply systems would be approved under an expedited review by Hawaiian Electric Co.

Solar companies said the rise in solar building permits is due to the utility’s approval of systems in areas that had backed-up applications because the utility said technical reviews were needed.

"Once the NEM changed, HECO released nearly all of our applications on grids under 120 percent saturation all at once," said Rich Taylor, project developer at PhotonWorks Engineering.

In April HECO cleared a backlog of 2,749 systems in a queue that had customers waiting for approval since October 2014. These systems were held up because HECO required additional technical reviews, saying the high numbers of solar systems in certain neighborhoods could create problems for the grid.

Colin Yost, principal at RevoluSun LLC, said the end of NEM will cut into the permit numbers in several months.

"We definitely will see a drop," Yost said. "It won’t come immediately because people are working through a backlog of approvals."

Yost said the grid-supply option is not as attractive as NEM, and self-supply doesn’t exist because batteries are expensive.

"Those factors together are combining to depress sales," Yost said.

The top 10 solar contractors year to date are Hawaii Energy Connection LLC, Alternate Energy Inc., RevoluSun, American Electric Co. LLC, REC Solar Inc., SolarCity Corp., Bonterra Solar Services, Vivint Solar Developer LLC, Haleakala Solar Inc. and Eco Solar LLC.

HECO leads the nation in the number of rooftop solar owners compared with the amount of customers the utility serves — approximately 16 percent of HECO’s customers on Oahu have rooftop solar.

On Oahu, 48,743 PV systems have been installed on residential homes. Combined, Hawaiian Electric Industries’ utility subsidiaries — including the Maui and Big Island power companies — have approved more than 71,000 rooftop solar systems among a total of 450,000 customers.