The state Public Utilities Commission last week blocked an attempt to take a portion of a $150 million financing program, originally intended to help underserved residents get renewable energy, to be used to pay private companies directly.
The body that oversees the program, the Hawaii Green Infrastructure Authority, requested in November to use a portion of the funds to pay private investors who would purchase the renewable energy systems and then lease them to consumers. The state Consumer Advocate objected to the idea due to concerns that the third-party investors would benefit from the program instead of the target group.
State lawmakers created the Green Energy Market Securitization, or GEMS Opens in a new tab, program in 2013 to make rooftop solar systems more affordable. GEMS raised roughly $150 million through a bond sale and was to have lent that money to low-income homeowners and nonprofit organizations for energy projects.
When announcing the program, the state highlighted that the program would help “low and moderate income homeowners, renters and non-profits be able to finance the purchase and installation of energy saving devices without the typically high upfront costs.” Before the launch of the program, several solar companies began offering to install systems with little or no upfront cost, reducing the need for GEMS. Later the state ended a generous solar incentive program, and now essentially limits solar systems to those connected to batteries.
GEMS is funded by a $1.13 monthly “Green Infrastructure Fee” on electrical bills. GEMS raised the money in 2014 and as of Dec. 9 had loaned out $1.8 million.
The proposal would have allowed investors to purchase renewable energy, such as rooftop solar systems, using GEMS money and then lease the system to a customer. The investor could use the funds to finance multiple individual leases.
On Friday the PUC suspended the request for further discussion. The PUC could reconsider the request at a later date.
In a filing earlier this month, the state Consumer Advocate objected to the authority’s request, saying that using the money for investors strayed from the intent of GEMS, as investors would receive benefits from the financing program instead of consumers.
“The ratepayer-based GEMS was not intended to be a vehicle for third-party lending,” the Consumer Advocate’s filing said. “(The) request to lend to a third-party investor represents a significant departure from previously approved programs in which the borrowers were also consumers.”
The Consumer Advocate added many solar companies already offer “zero down,” 20-year leasing options.
The Hawaii Green Infrastructure Authority said using the funds for third-party investors was part of what lawmakers envisioned when passing the law.
“We would argue that, in fact, providing GEMS financing to third party investors could bring greater benefits to consumers,” the Infrastructure Authority said in a filing Friday, adding that using GEMS money would reduce the risk to investors who would pay for the solar systems.
Members of the solar industry were supportive of the proposal as a “creative” use of funds.
“Leased systems are often a great way to make solar systems available to consumers who can’t otherwise get financing. More options for consumers are always a good thing, and it makes sense for GEMS to get creative to promote its mission,” said Colin Yost, principal at RevoluSun.
