HSEA April Quarterly Report

Posted on Wednesday, April 05, 2017

MEDIA CONTACT:

Hajime Alabanza

(808) 232-8371

hajime.alabanza@hsea.org

NEWS Release

FOR IMMEDIATE RELEASE

April 5, 2017

Storage Incentives, New Options for Solar Customers

Will Determine Whether Solar Industry Rebounds in 2017

2017 kicks-off with a CLOUDY outlook. Due to limited options for residential solar PV programs, with the elimination of Net Energy Metering (NEM) in 2015 and the looming end of the Customer Grid-Supply (CGS) program, solar sales and installations have contracted significantly. Furthermore, Customer Self-Supply (CSS) has had difficulty gaining traction despite being more than a year old.

A recent ruling by the PUC has opened up some additional capacity for the CGS program, buying much needed time for the state to transition to solar plus energy storage systems. Finally, two bills that provide incentives for energy storage systems remain alive in the state legislature.

Data:  

The 2017 Q1 decline is largely attributed to the elimination of NEM and the subsequent introduction of the Customer Grid-Supply (CGS) and Customer Self-Supply (CSS) programs. Although the CGS program showed signs of success, the 35MW program cap was hit in August 2016, leaving the CSS program as the only residential solar option available for customers. Unfortunately, due to a number of issues such as permitting, battery cost, and technical issues, the CSS program has resulted in only 51 energized systems to date.

Total systems that came online in Q1 2017 are approximately 37% below Q1 2016 figures

In Q1 2017, nearly 1,703 rooftops systems came online while 2,704 were added in the same period last year. Nearly one-third of the systems energized this year were CGS and CSS systems while last year less than one percent of energized systems comprised of CGS and CSS projects.

Furthermore, Q1 2017 permit numbers suggest continuing industry contraction:  

Number of pulled residential building permits in Q1 2017 are approximately 62% below Q1 2016 total

Solar contractors pull permits when they anticipate developing a project in the near future. In Q1 2016, the total number of pulled permits was about 1,189. This quarter, only 449 permits were pulled.

Regulatory:

On March 17, the PUC ruled that capacity from previously approved, but cancelled NEM projects could be transferred to the CGS program. This means that remaining NEM capacity can be added to the CGS queue. There is nearly 60 MWs of capacity in the NEM queue. Although it is impossible to predict how much of this capacity will eventually be transferred to the CGS program, this ruling will help to ameliorate a contracting market. Stakeholders will continue to work together to identify transferable capacity.

Additionally, the CGS program will end this year. According to the original order commencing the CGS program, both interim tariff programs (CGS and CSS) will be reevaluated every two years. In its most recent order, the PUC signaled that “non-controllable export tariffs” are unlikely to be considered in future tariff decisions.

Policy:  

As Hawaii transitions away from traditional grid-tied PV systems without energy storage to a market that requires the use of energy storage, it is more important than ever to enact policies that will galvanize these technologies. This year, there are two key bills that would incentivize energy storage systems:

 

HB 1593 seeks to broaden the scope of the Green Energy Market Securitization (GEMS) program by allowing the GEMS authority to accelerate the energy storage market by strategically deploying funds to the “clean energy savings jump start” program. Essentially, this bill would provide a rebate to energy storage systems.

SB 665 would allow tax credits to incentivize both traditional grid connected solar systems and energy storage systems as well as add a ramp down structure to the current tax incentive.

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. These incentives allow greater access of clean energy technology to underserved and lower income residents. The HSEA encourages all people interested to contact their representative and voice their support for these measures.

 Closing Remarks:

“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 to HSEA. “With the recent, positive PUC ruling adding CGS program capacity and two energy storage incentive bills in legislation there is a reason for optimism. Through reasoned regulatory action and legislative support for renewable energy and storage, the benefits of solar can reach all residents of the state.”

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Founded in 1977, the Hawaii Solar Energy Association is a Non-Profit organization and is comprised of installers, distributors, manufacturers, auditors, and financiers of solar water heating and photovoltaic systems. The majority of our member companies are locally owned and operated, making HSEA the leading voice of Hawaii’s solar industry.

The Hawaii Solar Energy Association (HSEA) issues its April report assessing the strength of Hawaii's solar energy industry. A rating, SUNNY, OVERCAST, CLOUDY, or STORMY is issued each quarter based on solar sales, jobs, and installations data. Pro or anti-solar policy, regulation, and legislation will also factor into the quarterly rating.

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