Steep drop in demand for PV permits linked to inferior incentives
DENNIS ODA / APRIL 19
The decline of issued solar permits is attributed to the state discontinuing a solar incentive program in 2015.
The city issued the fewest number of photovoltaic building permits in 18 months in July.
The City and County of Honolulu issued 336 PV permits last month, a decline of 54 percent from 738 in July 2015, according to data from Marco Mangelsdorf, who tracks rooftop solar permits and is president of Hilo-based ProVision Solar.
Year to date, the number of solar permits issued was down 27 percent from the same period last year. There were 2,946 PV permits issued from January to the end of July, compared with 4,053 issued during those seven months last year.
Mangelsdorf said the number of permits issued in 2016 will likely be half of what was issued in 2015.
The decline is largely attributed to the discontinuation of a state solar energy incentive program.
In October the state Public Utilities Commission stopped offering credit equal to the retail rate for the excess energy that PV systems sent to the grid. Many solar energy system owners lowered their electrical bill to approximately $17 a month through the net energy metering program.
The PUC replaced the net energy metering program with two less attractive options. When ending net energy metering, PUC Chairman Randy Iwase said he wanted to save space on the grid for other renewable energy options, such as community solar projects.
As of Sept. 30 there were 57,583 solar energy systems in the state. At the end of June there were 65,751 solar energy systems in the state — 44,541 on Oahu, 10,617 on Maui and 10,593 on Big Island — according to HECO’s website.
Waning interest
Only one of the two incentive programs now available to residents lets customers export excess energy into the grid. The grid-supply program credits new solar energy system owners 15 cents a kilowatt-hour for the extra energy their systems send into the grid, or roughly 8 cents less than the retail rate that had been offered through the net energy metering program.
The PUC also put limits on the total amount of energy it would accept from the grid-supply program. Oahu’s limit is 25 megawatts, Hawaii island’s limit is 5 megawatts and Maui County’s limit is 5 megawatts. Maui has reached its limit. Oahu and the Big Island are expected to reach theirs soon.
Robert Harris, Hawaii director of public policy for Sunrun Inc., said it is hard to predict what customers will save with the new programs.
“What’s challenging is the uncertainty caused by the new (programs),” Harris said. “It’s not as easy to predict how much customers will save, and for (grid-supply) the rates are set for just two years.”
The other incentive program, self-supply, encourages owners of PV systems to store their excess energy in batteries. Participants in this program are not allowed to send excess solar energy into the grid.
Leslie Cole-Brooks, executive director of the Distributed Energy Resources Council of Hawaii, said time-of-use rates would help solar energy systems connected to batteries be attractive to residents. Time-of-use pricing is a rate system that charges customers for the energy they use depending on the time of day.
Without more incentives “we will see the industry continue to slow to a crawl,” Cole-Brooks said. “The death of a robust, homegrown industry which has already done so much to help Hawaii gain its energy independence helps no one.”
12 responses to “Steep drop in demand for PV permits linked to inferior incentives”
Leave a Reply
You must be logged in to post a comment.
Less of a gravy train for PV installers. A set of 250watt panel and inverter cost about $500. Most companies charge about $1000 for the set and it only takes a few days to install it. the profits they make are huge hence the reason why every company that had nothing to do with anything started installing PV. Perhaps they need to start lowering their prices. there is no way they could let these pv guys ride on the backs of tax payers and rate payers forever
You can say the same about almost anything. A 100% markup is not unusual. If it takes very special skills it may even exceed 1000%. Have you ever hired an electrician or plumber?
Yes a 50% markup is quite common. So what this means is that a $500 a panel may in fact cost $250 to manufacture. If you could manufacture your own panels then you would make a 75% markup.
HECO is Greedy and its a shame. Net Metering is awesome
Net Metering is no so awesome for HECO’s shareholders.
net metering is only awesome to those who could afford the upfront costs of a PV system
They can go on to built PV solar energy farms. They have a lot of future business.
This is probably a good thing for current PV owners. Once battery banks become more prevalent, the current PV holders can get off the grid and not have to finance HECO any more. But if there were MORE PV owners, the legislature would probably enact a tax to force EVERYONE (including those off the grid) to keep HECO in business. Sometimes less is more, and I think the fact that HECO can lose the current number of PV owners without going out of business is a good thing. Had even more people switched, it may have been too late.
Would it make sense to allow those who cannot afford a full solar system to invest monies with others in similar situations with a return on their investment that would effectively reduce their bills after “x” number of years? (cooperative solar, which is formed solely for the benefit of their members, for example).
No, because that would decrease HECO’s power/profits, which the state will never allow. Instead, the state will ensure that ratepayers fund HECO’s solar plants, so that WE pay for an asset that *HECO* (and not us) will own, as per business as usual in Hawaii.
HECO don’t own over 40% of generation capacity on this island already. Get your facts right.
Sure you can if one is not connected to the grid. But don’t expect to do it cheap.