Oahu’s solar battery program to boost clean energy stymied by permitting system

A new program offering Hawaiian Electric customers on Oahu the opportunity to add their stored solar power to the grid and get paid for it has generated plenty of interest, according to those in the industry.

The launch of the “Battery Bonus” program was intended to help make up for a shortfall of renewable energy available when Oahu’s coal plant retires in September, all as part of the state’s push to meet clean-energy goals by 2045.

Hawaiian Electric announced the “Battery Bonus” program in late July, offering a one-time cash payment of $850 per kilowatt — or $4,250 for five kilowatts — to the first phase of customers that agreed to add a battery to an existing or new rooftop solar system and export it to the grid during peak evening hours. They would have to commit to the program for 10 years.

Solar companies said phones have been ringing, and customers have been interested in purchasing solar-battery systems, but the program is coming up against a significant hurdle.

The hitch? Slow processing of required permits by the Honolulu Department of Planning and Permitting.

“There’s been tons of interest,” said Brian Gold, president of the Hawaii Solar Energy Association. “The industry would be twice as busy if DPP was operating in a more streamlined manner.”

To apply for the program, Hawaiian Electric requires solar contractors to secure a building permit from DPP, which will determine the final incentive amount, the utility said.

As of Sept. 30, Hawaiian Electric said it had received 334 applications for the “Battery Bonus” program. Of those, 143 have been approved for installation, while the rest are in various stages of review.

This is up from just 31 applications approved at the end of August, when the program was getting off the ground.

Hawaiian Electric said early challenges arose, and applications have been returned, with the most common problems being a missing building permit, followed by missing information or documents to prove ownership.

Solar contractors say the process to apply for the permit “over the counter” — or in person — and obtain one, however, can take anywhere from four to six months or more.

So while thousands of customers are interested in signing up for the “Battery Bonus” program, roughly half are stuck in the permitting process, said Gold.

Recently, contractors dropping off applications at DPP’s downtown permit center found a sign informing them that the building permit process is backlogged eight weeks, and payments are behind by about 13 business days.

Chris DeBone of Hawaii Energy Connection, which sells the KumuKit, said his company has hundreds of customers who want to sign on to the program.

But in the past he’s had permit applications that automatically got canceled because they were not completed for more than eight weeks, and had to be resubmitted to start the process all over again.

“It’s not that they’re rejected,” he said. “They’re just delayed.”

In the “over the counter” permit process, he said, someone drops off the permit at one of DPP’s two offices — downtown or in Kapolei – followed by a wait for a staff member to complete the review process, which potentially takes weeks.

Once approved — sometimes with some back-and-forth — there is another waiting period to go in and make the payment in order to get the permit, which can take several more weeks. Given that it’s already October, DeBone says the company is having clients sign a disclosure, informing them of risks and that a permit may not be obtained in time to complete their project as planned.

The potential consequences of not having enough backup power when AES goes offline, according to HSEA in a Sept. 29 letter to Honolulu Mayor Rick Blangiardi, are rolling blackouts.

“This does not need to happen,” said Gold in his letter. “There are immediate, near-term steps your administration can take to resolve problems caused by the Department of Planning and Permitting that will allow customer-based solutions to address problems with Oahu’s electrical grid.”

HSEA said the solutions are simple and can be addressed by moving much of the process online, shortening it to about six weeks.

With the online permitting process, a conditional use permit is issued for construction, followed by an inspection to close it out. But only about 30% of homes seeking a solar-battery system are eligible.

Those that are ineligible include homes that share one driveway, and homes that share one tax map key that are in a subdivision, which includes parts of Mili­lani and newer developments in Kapolei and Ewa Beach, where solar is in high demand. They also include homes in a flood plain zone or with restricted covenants.

There is not necessarily anything about these ineligible homes, structurally, that make their solar-battery installations different, however. Making these homes eligible for online permitting would speed up the process without compromising safety, they said.

Also, solar systems are generally cookie-cutter and do not warrant the same level of scrutiny as the construction of a new home or building. And they are still subject to inspections.

“In reality these systems are the same thing over and over again,” said Gold. “For rooftop solar it’s a simple installation. In most cases it’s a one-day job, so it’s really not that much different from installing a new appliance in your home — a refrigerator or an air conditioner.”

Gold said the group, which represents more than 100 members, has repeatedly requested meetings with DPP Director Dean Uchida to discuss practical solutions, with no luck.

Nationally, the average time frame for solar permits to be reviewed is one to two weeks, said Gold, compared with four to six months in Honolulu.

Solar permits also make up more than half of the permits processed at DPP, he said, so if they were streamlined, staff there could focus on others in the pipeline.

Instead of getting easier, DPP’s permitting process lately has only grown longer and more complex for solar- battery systems, the group said, just as the industry fields increased demand from the new battery program.

The Hawaii Public Utilities Commission approved the “Battery Bonus” program in June, capping it at 50 megawatts, but hopes to shore up other sources of renewable energy to replace AES Hawaii, the 180-MW coal plant at Campbell Industrial Park, upon its retirement in September.

The PUC also approved the Kapolei Energy Storage project, the state’s largest stand-alone battery storage system, which is expected to be completed next year, but said charging it with fossil fuel-based sources should be a last resort.

In a statement Thursday evening, Blangiardi said that a 2020 DPP audit disclosed long-standing issues in the department that both his administration and Uchida are committed to resolve.

“We are working on alternative processes to improve the overall operations and efficiencies for the public and we are embarking on a modernization plan to upgrade DPP systems and resources,” said Blangiardi in a statement.

He said additional questions from the Honolulu Star-Advertiser would require more time for an “accurate and thoughtful response,” and that more answers were on the way.

Blangiardi, along with Gov. David Ige, proclaimed Wednesday Energy Efficiency Day, alongside national partners, acknowledging the importance of achieving clean-energy goals in the face of climate change, and their role in creating jobs during recovery from the COVID-19 pandemic.

HAWAIIAN ELECTRIC’S ‘BATTERY BONUS’ PROGRAM

>> The utility will pay a cash incentive for Oahu customers to add energy storage (a battery) to an existing or new rooftop solar system.

>> Customers accepted in the program for the first 15 megawatts will receive $850 per kilowatt ($4,250 for 5 KW). Customers for the next 15 MW receive $750 per KW. Customers for the last 20 MW receive $500 per KW. Applications accepted through June 20, 2023, or until the 50-MW cap is reached.

>> Customers commit to exporting electricity from their battery storage for two hours sometime between 6 and 8:30 p.m. daily through Dec. 31, 2023, and to the program for 10 years.

>> Hawaiian Electric must pay the incentive within 30 days after the data is delivered.

>> More info: hawaiianelectric.com/batterybonus.