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HSEA September Monthly Report
Posted on Wednesday, September 07, 2016
FOR IMMEDIATE RELEASE
September 7, 2016
HAWAII SOLAR INDUSTRY OUTLOOK REMAINS CLOUDY
SOLAR INDUSTRY CONTINUES ITS DOWNWARD PATH
GRID SUPPLY CAP MET ON HAWAII ISLAND
Another month has passed, and no decisions have been made on key issues that are pivotal not only for the solar industry, but also the state’s clean energy goals, consumer choice, and customer savings. The outlook for Hawaii’s solar industry remains CLOUDY. The Grid Supply cap was hit a few weeks ago on the Big Island, and time is quickly running out for Oahu, the only island where the program has not been fully subscribed. Our data indicates that for yet another month this year, industry activity has fallen significantly compared to the same time last year.
Solar Project Applications and Approvals
Grid Supply Cap Reached on Hawaii Island; Self Supply Sees Modest Growth
Grid Supply approvals grew by 318 applications, a 16.5% increase from last month, which marks five consecutive months of growth. While this steady stream of Customer Grid Supply approvals should provide work in the near-term, activity will sharply decline if the interim 35MW cap is not raised. Most recently, the Grid Supply cap was met on the Big Island, which leaves Oahu as the only island where PV only systems are currently allowed. Based on historical uptake, the cap will most likely be met in Oahu in a matter of days. Total submitted Grid Supply applications represent close to 31MW, or 87% of the interim cap. Although installation approvals for the Self Supply program increased to 33 applications during the period of October 2015 through the end of August 2016, the absence of Time-Of-Use rates and energy storage incentives, along with ongoing interconnection issues, will prevent this program from realizing significant progress.
Systems energized in August 2016 are up 2.4% from last month
Since last month, the number of energized systems has gone up by 2.4%. A large portion of these systems are backlogged NEM customers. Currently, 9,285 NEM applications are approved, but not installed. Many of these customers have been waiting 6-18 months or more for approval. 472 Grid Supply and only two Self Supply systems have been energized since the inception of these new programs (October 2015). As the NEM backlog is exhausted, the number of energized systems will more accurately reflect the success/failure of Grid Supply/Self Supply programs.
Building Permit Data Analysis
Number of closed building permits are down 29.4% since August 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 27.3% from August 2015
Solar contractors pull permits when they anticipate developing a project in the near future. The number of building permit applications in August 2016 are down 27.3% from August 2015.
Ultimately, it is the Hawaiian ratepayer who pays the price for the continuing decline of the solar industry. The decision to end the NEM program and replace it with CGS and CSS has proven detrimental by limiting customer choice and crippling the state’s once vibrant solar energy industry. Even well-known NEM critics have labeled impacts of the failed transitional programs as “severe” and “downright scary.”1
With the Grid Supply program nearing its end, we can only expect the situation to get worse since the NEM backlog is not as robust as numbers might suggest and few companies are offering Self-Supply products. In light of this, it is imperative to raise the Grid Supply cap and to enact and implement Time-Of-Use rates and energy storage incentives to bolster the Self-Supply option. “Consumers want to produce their own clean, homegrown energy and increase their monthly electricity savings,” said HSEA’s Hajime Alabanza. “Unless key policy decisions are made immediately, customers will have few options other than expensive, fossil fuel generated utility power.”
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 September 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.
1Source: Marco Mangelsdorf, “Solar Subsidy Cutbacks Have Cut Back Demand,” Honolulu Star-Advertiser, August 24, 2016, http://www.staradvertiser.com/editorial/solar-subsidy-cutbacks-have-cut-back-demand/.