HSEA August Monthly Report

Posted on Wednesday, August 03, 2016

MEDIA CONTACT:

Hajime Alabanza

(808) 232-8371

hajime.alabanza@hsea.org

NEWS Release

FOR IMMEDIATE RELEASE

August 3, 2016

HAWAII SOLAR INDUSTRY OUTLOOK UPGRADED TO CLOUDY   

SOLAR INDUSTRY CONTINUES ITS FREE FALL

OFF-GRID SYSTEMS GARNERING INTEREST

The Public Utilities Commission’s (PUC) recent decision to deny the HECO-NextEra merger and reiterate its support for distributed solar offers a glimmer of optimism. In light of this, the outlook for Hawaii’s solar industry has been upgraded to CLOUDY. However, the Customer Grid Supply program’s imminent closure and slow adoption of the Customer Self Supply program continue to limit consumer choice and augment market disruption. As the options to procure rooftop solar continue to wane, more and more households have begun to explore off-grid solutions.

Off-Grid Systems Establish Presence 

Across the state, off-grid solar systems—systems that eliminate dependence on the public utility—are gaining popularity. As solar policy continues to stagnate and Self Supply gains little ground, an increasing number of households are searching for other outlets that will give them access to cleaner, cheaper, and autonomous energy. Several solar parts distributors have noted an increased interest in completely off-grid systems, traditionally reserved primarily for residents who had no other option. Ultimately, the propensity to grid defect will grow as energy storage costs decline if the Self-Supply program remains unappealing. 

Solar Project Applications and Approvals

Grid Supply Continues Steady Growth; Self Supply Sees First Interconnection 

Grid Supply approvals grew by 224 applications, a 13% increase from last month, which marks four consecutive months of growth. While this steady stream of Customer Grid Supply approvals should provide work in the near-term, as mentioned before, activity will sharply decline if the interim 35MW cap is not raised. Some projections estimate that the cap will be reached as early as the end of August. Total submitted Grid Supply applications represent close to 26MW, or 74% of the interim cap. The Customer Self Supply program realized its first interconnection with permission to operate since its inception in October; however, this event cannot be considered an inflection point. Ultimately, the absence of Time-Of-Use rates and energy storage incentives, along with ongoing interconnection issues, will continue to mire this program. With the merger saga coming to an end, we hope that the PUC can focus more time on these pertinent issues.      

Interconnection Analysis

Systems energized in July 2016 are up 1% from last month

Since last month, the number of energized systems has gone up by 1%. A large portion of these systems are backlogged NEM customers. Currently, 10,017 NEM applications are approved, but not installed. Many of these customers have been waiting 6-12 months or more for approval. 320 Grid Supply and one Self Supply systems have been energized since the inception of these new programs (October 2015), which is around 4.7% of systems energized since December. As the NEM backlog is exhausted, the number of energized systems will more strongly reflect Grid Supply/Self Supply programs.

Building Permit Data Analysis

Number of closed building permits are down 57% since July 2015

Unlike pulled permits, closed permits represent solar projects that have been completed in their entirety; therefore, it is more indicative of the pulse of the solar industry. The year over year fall in closed permits show that the number of solar projects built have decreased considerably.

Number of pulled building permits are down 53.6% from July 2015

Solar contractors pull permits when they anticipate developing a project in the near future. The number of building permit applications in July 2016 are down 53.6% from July 2015.

Summary

The PUC’s decision to reject the HECO-NextEra merger creates a precedent for Hawaii’s clean energy future. The PUC has made it clear that distributed energy resources (DERs) like rooftop solar are an important factor in achieving Hawaii’s clean energy goals. In the merger decision, the PUC stated that “developing a sustainable, competitive DER market is essential for meeting the State’s clean energy goals,” and reaffirmed the importance of “Hawaii’s longstanding national position in integrating high penetration of distributed solar PV systems.”

The end of the NextEra distraction is cause to hope that the challenges currently surrounding DERs will be quickly addressed. We will continue to work closely with the PUC and industry stakeholders on these critical goals. However, until these issues are resolved, we expect industry contraction, market disruption, and diminishing consumer choice. As customer options become limited, we may see more people opting for off-grid solar solutions. “In the wake of the rejected merger, it is now more important than ever for local entities to work collaboratively in order to achieve Hawaii’s renewable energy goals,” said HSEA’s Hajime Alabanza. “We’ve all made a commitment to relinquish our state’s dependency on fossil fuels, and it is the collective effort of the community that will bring this goal to fruition.”

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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 August report assessing the strength of Hawaii's solar energy industry. A rating, SUNNY, OVERCAST, CLOUDY, or STORMY will be issued each month based on solar sales, jobs, and installations data. Pro or anti-solar policy, regulation, and legislation will also factor into the monthly rating.

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