HSEA Inaugural Monthly Report

Posted on Friday, April 08, 2016

MEDIA CONTACT: 
Hajime Alabanza
(808) 232-8371
hajime.alabanza AT hsea.org

NEWS Release

FOR IMMEDIATE RELEASE

April 8, 2016

HAWAII SOLAR INDUSTRY OUTLOOK CLOUDY

HAWAII SOLAR ENERGY ASSOCIATION ISSUES INAUGURAL MONTHLY REPORT

ON THE STATE OF HAWAII'S SOLAR INDUSTRY

Today, the Hawaii Solar Energy Association (HSEA) inaugurates a monthly 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.

March 2016 industry data suggests that the outlook for Hawaii's once vibrant solar energy industry is CLOUDY due to a number of factors, including an inefficient transition away from net metering marked by confusion and a new, longer application required by HECO. Although the year over year increase in solar permits suggests growth, reliance on that single data point is unreliable because the permitting records reflect mostly backlogged work done under the popular net metering program that no longer exists.  Forward-looking indicators raise serious concerns of a dramatic industry downturn unless the interconnection programs that replaced net metering are significantly and swiftly improved.

Approved Applications

Applications approved for installation have fallen 62.9% since December 2015

Since the inception of the Customer Grid-Supply (CGS) and Customer Self-Supply (CSS), and the end of Net Energy Metering (NEM), there has been a marked decrease in the number of applications approved for installation across all islands. This precipitous fall in installation approvals is primarily due to an inefficient transition from NEM to the CGS and CSS programs. Initially, the HECO Companies’ application forms for CGS and CSS were more than four times longer than the old NEM application. In addition, many applications were rejected for undisclosed and non-substantive reasons, such as the mere fact that applicants left blank spaces for information inapplicable to their project. Recognizing these deficiencies, HECO and solar stakeholders, including HSEA, are working together to improve and streamline the applications process.

Total completed application approvals represent 8MW /35MW of total allowable installed CGS capacity

Currently, only 607 CGS and one CSS systems have had applications approved for installation in the state of Hawaii. The Hawaii PUC approved a cap of 35MW for CGS systems across all islands. Despite the low number of CGS projects in the queue, the systems approved account for a total of 8MW, or approximately 23% of the cap amount, leaving only an additional 27MW of CGS systems before this option is closed to consumers. 

Interconnection Analysis

Systems energized in March 2016 are up 6.4% from December 2015

Although the number of energized systems have gone up since the introduction of CGS/CSS, nearly all of these are coming from backlogged NEM customers—currently, 13,169 NEM applications are approved, but have not yet been installed. Furthermore, four CGS and no CSS systems have been energized since the inception of these new programs (October 2015), which is less than .01% of all energized systems. As the NEM backlog gets exhausted, the number of energized systems will more strongly reflect CGS/CSS programs.

Building Permit Data Analysis

Number of closed building permits are 11.1% above March 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. Although the overall percentage of closed permits is up from the same time period last year, almost all of the closed permits consist of backlogged NEM jobs approved prior to October of 2015.

Number of pulled building permits are down 29.9% from March 2015

Solar contractors pull permits when they anticipate developing a project in the near future. The number of building permit applications in March 2016 are down 29.9% from March 2015. The vast majority of pulled permits are for backlogged NEM jobs, which further illustrates the current drop in new solar applications (CGS/CSS).

Summary

While the number of completed and energized rooftop solar projects have increased, a majority of these can be attributed to backlogged NEM projects. The success or failure of the grid-supply and self-supply programs still hangs in the balance and will depend on whether the programs are properly supported and implemented over the next few months. In the words of the HSEA President Rick Reed, “Make no mistake, we are now engaged in an epic battle over Hawaii’s energy future. Everyone has a stake in the outcome. As an industry, we will continue to advocate for more and better ways for ratepayers to manage their utility bills.  Despite some dark clouds, strong consumer demand, rapid advancements in battery and inverter technology and our state’s 100% renewable standard all suggest brighter skies ahead. All we need to do now is make the right choices and get out of our own way.”

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