Companies pull back on solar installations for Oahu townhouses

Many Oahu solar companies have stopped taking on townhouse clients due to the long wait for building permit approval from the Honolulu Department of Planning and Permitting.

“The problem is … just exasperating to residents of the state who are trying to help take the pressure off of the electric problem with the coal plant closing by putting it in storage,” said Sloane Struse, who wanted to install solar panels on his Ko Olina townhouse but could not find a solar company that would take him on as a client.

“We can’t even help because we can’t even get the permits because they’re so backlogged.”

The AES Hawaii coal power plant in West Oahu is scheduled to close by September, which has put an increased urgency on the state to implement green energy systems, such as more solar.

Colin Yost, chief operating officer of RevoluSun, said the solar company tried to accept townhouses as long as it could, but recently had to stop accepting townhouse clients because the waits for permits made it too difficult to install the product.

“We stopped doing those projects, because of the uncertainty of when we would actually be able to install the systems,” he said.

“When you have a small project, it becomes even harder because it just isn’t worth it for a lot of people to get into a potentially yearlong process of waiting to do that work.”

One of the issues particular to solar that makes long waits difficult is that people want to claim tax credits for the year that the system is installed. Currently, if a person installs a solar photovoltaic system, they can claim a 26% credit on their federal taxes. That number will drop to 22% in 2023, and is expected to expire altogether in 2024, unless Congress renews it.

Ben Parish, owner of Eco Solar, said the company has not been installing systems in townhomes since 2016, as the added cost for the long waits for permits have made installing at townhomes too expensive for owners.

One of the issues is that townhomes are not treated like single-family homes through the permitting system. That means when the plans are submitted through the online portal on the DPP website, they are not automatically issued and need to be reviewed by staff. Also, because all of the electrical meters in townhomes are connected, there also needs to be electrical engineering included in the permit application.

“Residential clients can’t really swallow the $10,000 added for engineering,” Parish said.

In 2020 the city passed an ordinance that was supposed to make it easier for the solar industry to install in townhomes. The ordinance creates a 14-day time limit for DPP to approve or deny solar permits, and if that deadline is not met by the department, the solar companies can begin building and their permit is considered accepted, provided that the company self-certifies that the application is correct and is willing to accept all the fees for the permit.

Hawaii Solar Energy Association Executive Director Rocky Mould said that although the ordinance is on the books, it has not been implemented.

However, DPP Director Dean Uchida said that it is the solar companies that are not taking advantage of the ordinance.

“The industry hasn’t taken advantage of it,” he said.

“They lobby for a law, they made the change and they’re not using it now. So I don’t know what the problem is.”

Another added issue is rules that homeowners associations may put on solar installations, which can vary from place to place and sometimes be extensive.

In 2022 there have been only 12 permit applications submitted for solar projects on multifamily dwellings, the category town­homes are in. Four have been approved, five are in review and three are in initial processing.

However, townhomes are not the only issue that solar companies identify with long waits for permits.

Residential homes that are built on the same parcel get flagged and sent to DPP’s E-Plans division in addition to review by DPP staff, which affects homes in new developments such as Koa Ridge and Hoopili.

Parish said he hasn’t gotten permits approved in those areas that he submitted back in January, which also means that the prices that he quoted homeowners for the installation have gone up due to the increased cost for goods.

“From the beginning of the year to now, everything’s up 10%. … It’s actually more on some stuff, like for some of our electrical parts,” he said.

“The solar panels that we quoted them in January, they’re not available anymore. Now it’s a new model that’s more expensive. … It drives up the cost for the customer.”

Uchida said he has not been contacted by anyone at Koa Ridge about the issue, and said that he doesn’t think Hoopili should be having those problems. Instead he suspected that the developments on Hoopili may be so new that the online portal is not recognizing the addresses and flagging the projects.

Currently, the permitting system does not have the capability of prioritizing certain residential projects over others, so the solar permits are mixed in with all the other applications for other residential building issues.

“If you’re going into the regular permit process, it takes a while because we’re processing over 20,000 permits a year. … The system is set up so it’s one way in, one way out; we cannot pull permits and processes. The system is not built like that. So what happens is you get stuck in the queue, and then you just gotta wait your turn,” he said.

“We have so many permits coming in, and we have a lack of staffing in our permit issuance branch. We’re still have about 30% vacancy right now.”

Uchida said that it can take months to get the permit into the system but that DPP is trying to find better software that would streamline the permitting process as well as to bring on more staff. He said the department was approved to bring on about 80 new staff members over the next couple of years, 40 of whom would be building permit plan examiners.

Further exacerbating issues is the state’s decision to shut down the coal plant, a decision that DPP was not included in. Uchida explained that because of the closure, DPP staff has had to work on approving permits for large solar projects.

“We had to pull people out and specifically assign them to help with the solar projects,” he said.

“(That) takes away from all the other permits that we tend to process. So it’s kind of unfair that we have to cater to one industry and let everybody else kind of suffer.”