The city issued the fewest number of photovoltaic building permits in 18 months in July.

The City and County of Honolulu issued 336 PV permits last month, a decline of 54 percent from 738 in July 2015, according to data from Marco Mangelsdorf, who tracks rooftop solar permits and is president of Hilo-based ProVision Solar.

Year to date, the number of solar permits issued was down 27 percent from the same period last year. There were 2,946 PV permits issued from January to the end of July, compared with 4,053 issued during those seven months last year.

Mangelsdorf said the number of permits issued in 2016 will likely be half of what was issued in 2015.

The decline is largely attributed to the discontinuation of a state solar energy incentive program.

In October the state Public Utilities Commission stopped offering credit equal to the retail rate for the excess energy that PV systems sent to the grid. Many solar energy system owners lowered their electrical bill to approximately $17 a month through the net energy metering program.

The PUC replaced the net energy metering program with two less attractive options. When ending net energy metering, PUC Chairman Randy Iwase said he wanted to save space on the grid for other renewable energy options, such as community solar projects.

As of Sept. 30 there were 57,583 solar energy systems in the state. At the end of June there were 65,751 solar energy systems in the state — 44,541 on Oahu, 10,617 on Maui and 10,593 on Big Island — according to HECO’s website.

Waning interest

Only one of the two incentive programs now available to residents lets customers export excess energy into the grid. The grid-supply program credits new solar energy system owners 15 cents a kilowatt-hour for the extra energy their systems send into the grid, or roughly 8 cents less than the retail rate that had been offered through the net energy metering program.

The PUC also put limits on the total amount of energy it would accept from the grid-supply program. Oahu’s limit is 25 megawatts, Hawaii island’s limit is 5 megawatts and Maui County’s limit is 5 megawatts. Maui has reached its limit. Oahu and the Big Island are expected to reach theirs soon.

Robert Harris, Hawaii director of public policy for Sunrun Inc., said it is hard to predict what customers will save with the new programs.

“What’s challenging is the uncertainty caused by the new (programs),” Harris said. “It’s not as easy to predict how much customers will save, and for (grid-supply) the rates are set for just two years.”

The other incentive program, self-supply, encourages owners of PV systems to store their excess energy in batteries. Participants in this program are not allowed to send excess solar energy into the grid.

Leslie Cole-Brooks, executive director of the Distributed Energy Resources Council of Hawaii, said time-of-use rates would help solar energy systems connected to batteries be attractive to residents. Time-of-use pricing is a rate system that charges customers for the energy they use depending on the time of day.

Without more incentives “we will see the industry continue to slow to a crawl,” Cole-Brooks said. “The death of a robust, homegrown industry which has already done so much to help Hawaii gain its energy independence helps no one.”