Hawaii’s wealthy make up the majority of residents who have rooftop solar, and two programs the state created to change that are floundering.
Gov. David Ige signed a law to create a community solar program in 2015. The program would help renters and low-income families benefit from solar, but the details of the program are still being debated and it will take at least six months to implement once all the parties agree to a plan.
The second was a loan program created by the state in 2013 to help make energy more affordable for low-income families. The Green Energy Market Securitization, or GEMS, program raised roughly $150 million through a bond sale but has lent less than 2 percent of the funds to date — missing the original goal to have issued all of the funds by the end of November 2016.
Meanwhile, the only incentives that have seen success have gone primarily to the wealthy, according to state Chief Economist Eugene Tian.
“The higher the household income, the more PV installation,” Tian said.
From 2011 to 2014 some 43 percent of residents who claimed the state’s renewable-energy tax credit made more than $100,000, an income bracket that accounts for 14 percent of the population.
With nearly 78,500 photovoltaic systems connected to the grid, Hawaii has one of the highest per-capita solar penetrations in the country.
It got there with the help of a state tax credit, a generous payment to solar system owners for the excess energy their systems send to the grid, and Hawaiian Electric Co.’s high electrical bills. Roughly 16 percent of HECO customers now have solar.
Since 2009 Hawaii has offered a 35 percent tax credit for solar systems. That’s in addition to a 30 percent federal tax credit.
But to earn the tax credits, a homeowner must first pay for the system, a barrier too high for some low-income families. The average price for solar installations was $28,400 in May, according to state data.
The biggest barrier to solar ownership is homeownership.
Hawaii homeownership is third lowest in the nation. About 57 percent of residents own their homes.
Tian said the vast majority of single-family homes with PV are owned by the residents who occupy them. The most popular areas for installation are Mililani, Pearl City, Aiea, Diamond Head, Kahala, Aina Haina, Hawaii Kai, Kailua and Lanikai.
Renters are essentially out of luck when it come to benefiting from the solar incentives.
Mark Duda, principal at Distributed Energy Partners, said a community solar program is necessary to break the barriers of entry.
“Historically, you’ve needed in one way or another to own or control property in order to participate in rooftop solar or bill-offsetting programs; (community solar) breaks that linkage,” Duda said.
HECO rejects PUC plan
Community solar allows renters to pay a set amount per month in return for a share of the electricity produced by a solar farm.
But the program is far from reality in Hawaii. After two years of discussions, state regulators and Hawaiian Electric Co. have not agreed on the program’s details, including how much renters would be credited for solar power.
The Public Utilities Commission came up with a plan for community solar, but HECO has rejected it. On Tuesday HECO said it would pursue legal action to avoid putting in place the program proposed by the PUC.
The PUC said it could take up to six months for HECO to launch the program after all parties agree on its details.
Similarly, the GEMS program has done little to help renters and low-income homeowners.
Seven months since the GEMS program was supposed to fully deploy its $150 million fund to help families save on energy costs, the state has lent only $2.8 million while spending $2.9 million on administrative costs.
Ratepayers are covering the cost of GEMS through the “Green Infrastructure Fee” on their monthly bill. That money will be used to pay for interest payments on the bonds sold to fund GEMS. During the 15-year life of the bonds, interest will total $33 million.
Gwen Yamamoto Lau, the fourth executive director of GEMS since it was launched in 2014, said her team is working as fast as possible to meet the needs of the state’s energy market, but added that there were “unrealistic deployment expectations set when the idea of GEMS was being sold to the Legislature back in 2012 and 2013.”
The original director of the program, Richard Lim, was appointed by Gov. Neil Abercrombie and left the post when Ige appointed a new director in December 2014. Lim set up GEMS when he was director of the state Department of Business, Economic Development and Tourism. Lim declined to comment.
One bill currently waiting for Ige’s signature would use $46 million of the GEMS money to finance energy efficiency measures for the Department of Education.
Yamamoto Lau said the program is also looking to provide solar water heaters on Molokai — adding that the program’s board approved $9.6 million for that project.
Another effort taken up by Yamamoto Lau’s team is to offer an on-bill financing option to Hawaiian Electric Co. customers. This option would allow loans for solar systems to be paid back through customers’ electrical bills. Yamamoto Lau said she is also working on a program that would motivate landlords to install PV.
Yamamoto Lau said the program “will provide the financing mechanism coupled with incentives for landlords to install solar systems on behalf of their tenants.”