Hawaii nears grid-supply cap, self-supply not taking off, HESA warns of slowdown

Hawaii solar grid supply

The Hawaii Solar Energy Association has issued its third consecutive monthly report that warns of a cloudy future for the state’s solar industry. The word cloudy is being used mostly for pun purposes, as the group posits very clear outcomes based on the current course.

“The Grid Supply program has carried on with its momentum from last month, but, at this pace, it is projected to meet its cap in a matter of months,” the report states. “While the Self Supply program has finally seen its first installation, interconnection issues show that the program is not yet viable as a market product and customer option.”

This all stems from what the group believes were unintended consequences of the Public Utility Commission’s October order that incentivized certain behaviors and installations and disincentivized others. So, Grid Supply approvals grew by 444 applications, a 43 percent increase from last month, which marks two consecutive months of growth. Sounds good right? Not so, says HSEA:

“Although this continued acceleration is a positive in the near-term, the interim Grid Supply program could come to an end as early as August on Oahu and much sooner on Maui if the interim 35-MW cap is not raised. Total submitted Grid Supply applications represent close to 19-MW, or 54 percent of the interim cap.”

RELATED: Solar groups trying to raise grid-supply cap in Hawaii 

Among the potential reasons for the rapidly declining cap space are two factors that were not anticipated at the time the PUC imposed the cap in October 2016:

(1) HECO’s unilateral decision in March to change its method of measuring inverter sizes from “nominal” output to “peak” output, which for many systems resulted in an artificial size increase of 5 to 8.5 percent and

(2) the unintended consequence of PUC Order’s conversion of exported power credits from an annual reconciliation under NEM to a monthly reconciliation under Grid Supply. The stated purpose of the conversion was to reduce system sizes, but instead customers increased system sizes (by approximately 10% according to HECO’s records) in an apparent attempt to maximize the overall value of their PV systems.

A motion recently filed by HSEA and its solar allies to increase the Customer Grid Supply Tariff Cap was met with strong opposition from HECO, which asserted that the Self Supply program, on its own, should serve as the primary alternative to net energy metering until further programs are developed.

“However, HECO’s claim that the Self Supply program is a viable replacement for Grid Supply has no basis in reality,” the group goes on to say. “Since its inception nearly eight months ago, only four Self Supply customers have been approved for installation. One of these systems was installed last month, but technical disputes with HECO have thus far prevented it from being interconnected and energized. It is too soon to know whether the Self Supply program will ever be a viable alternative to Grid Supply, but the facts are clear it is not ready to serve that role now. Policy initiatives and incentives such as an effective Time-of-Use rate structure, better interconnection procedures and improved pricing from manufacturers are likely all needed to make Self Supply workable.”

Another telling stat: The number of pulled building permits are down 33.6 percent from May 2015.

“Solar contractors pull permits when they anticipate developing a project in the near future. The number of building permit applications in May 2016 are down 33.6% from May 2015.”

— Solar Builder magazine

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