Solar businesses struggle without incentives

Oahu’s solar industry continues to tank, as bills designed to help revive it move through the state Legislature.

The number of permits issued for residential rooftop solar systems in the first quarter of this year was down 62 percent from 2016, according to a recent report released by the Department of Business, Economic Development and Tourism.

The total number permits issued in Honolulu last quarter for residential rooftop solar systems — with the average price of $20,800 — was 449, compared to 1,189 in the first quarter of 2016.

Hawaii Solar Energy Association said Wednesday “2017 kicks-off with a cloudy outlook,” reporting the industry is still struggling more than a year after the state eliminated a popular incentive program and replaced it with two less profitable programs.

“The 2017 solar market has seen no marked improvements since 2016 and is so far characterized by a slowdown in solar activity, decrease in consumer choice, and reduction in employment,” said Hajime Alabanza, executive assistant at HSEA.

State regulators ended a popular solar incentive program called net energy metering (NEM) in October 2015. The program credited customers the full retail rate for the excess energy their solar energy systems sent into the grid.

The state replaced NEM with a program called grid-supply, which credits customers for excess energy but at a lower rate, and self-supply, which prohibits solar systems from sending excess energy into the grid. To meet the requirements of the self-supply program customers buy batteries to absorb the excess energy produced by the system.

After hitting its limit last year, the grid-supply program was recently reopened to add a limited number of participants. Once the program’s limit is reached a second time, the self-supply program will be the only option for residents. To date the self-supply program has not been a popular choice, with only 51 energized systems.

There were 47,218 rooftop solar systems on Oahu in the fourth quarter of 2016, according to the latest report released by Hawaiian Electric Co.

Solar representatives say incentives are needed to help the self-supply program get off its feet. The total installation price of a Tesla Inc.’s battery system, Powerwall 2, is $7,000 adding roughly 35 percent an average total solar system’s cost.

“Although the cost of energy storage systems has been falling over the past few years, it is imperative that energy storage incentives are made available,” HSEA said in the Wednesday report.

At the Legislature, House Bill 1593 would create a three-year pilot program that would offer rebates to residents who buy batteries. The bill moved out of its final committee Wednesday. Senate Bill 665 would offer a tax credit for energy storage systems, and it passed out of its final committee on Tuesday.

Leslie Cole-Brooks, executive director of the Distributed Energy Resources Council of Hawaii, said she is hopeful HB 1593 will pass and give the industry the momentum it needs while waiting for batteries to become more affordable.