The City and County of Honolulu issued 39 percent more building permits for solar systems in November than in November 2014, following a surge in orders before the state ended a popular incentive program.
November marks the ninth straight month of year-over-year increases in the number of photovoltaic permits issued on Oahu. The city issued 726 permits, up from 520 in November 2014, according to data from Marco Mangelsdorf, who tracks rooftop solar permits and is president of Hilo-based ProVision Solar.
Mangelsdorf said the November numbers mostly reflect customers who were approved under a previous incentive program that state regulators ended Oct. 13. The incentive program, called Net Energy Metering, credits solar owners with the full retail rate for the excess energy they send to the grid. Solar customers who applied before Oct. 13 are grandfathered into the old Net Energy Metering system.
“It’s likely that the very large majority of those permits were issued based on previously sold net energy metered systems,” Mangelsdorf said. “This backlog of NEM systems will keep many PV contractors busy for months into 2016. Sooner or later the reality of markedly fewer sales of new customer grid supply solar electric systems will translate into fewer permits, fewer installations, workforce reductions and some companies exiting the field. But for now the party continues.”
Hawaiian Electric Co. — the utility serving Oahu, Maui and the Big Island — is replacing NEM with two programs known as grid-supply and self-supply. Through grid-supply, customers are credited approximately 15 cents per kilowatt-hour for the excess energy their systems send to the grid. Under NEM, customers are credited the full retail rate, or 24.4 cents per kilowatt-hour in November. Grid-supply has a minimum charge of $25, while NEM has a minimum of $17. The grid-supply program also has a cap of approximately 4,500 residential systems.
Under the self-supply program, solar customers will not export energy to the grid. Batteries linked to PV will consume all of the excess energy produced by solar systems. If a system can’t power a home at any time, a customer can draw power from the grid. The PUC ordered that self-supply systems would be approved under an expedited review by HECO.
The top 10 solar contractors year to date are Hawaii Energy Connection LLC, Alternate Energy Inc., RevoluSun, American Electric Co. LLC, REC Solar Inc., SolarCity Corp., Bonterra Solar Services, Haleakala Solar Inc., Vivint Solar Developer LLC and Eco Solar LLC.
Colin Yost, principal at RevoluSun, said he expects the year-over-year growth to continue until a backlog of 10,000 NEM systems is installed.
“There are 10,000 NEMs left to build on Oahu,” Yost said. “Monthly permit data will likely exceed prior year for a number of months and will decline once NEMs start running low. Grid-supply and self-supply are selling at a much slower pace than NEM, in part because they’re unnecessarily complicated.”
Michael Ito, director of marketing at Alternate Energy, said the increase was due to the rush to get solar installed before the tax year ends.
“We are already experiencing a decrease in pulled permits and expect to see a further decrease in February/March 2016,” Ito said. “Currently we are still working through our backlog of approved NEM contracts submitted prior to Oct. 13. There is still some concern about HECO interconnection approvals under the new programs, but we’ve been able to reassure customers that they still have excellent options. Once people understand the details, they realize solar is still alive and well.”
HECO leads the nation in the number of rooftop solar owners per customer served — approximately 16 percent of HECO’s customers on Oahu have rooftop solar.
On Oahu, 48,743 PV systems have been installed on residential homes. Combined, Hawaiian Electric Industries’ utility subsidiaries have more than 71,000 rooftop solar systems among a total of 450,000 customers.
