The state’s failed $150 million financing program designed to help low-income residents own renewable energy systems has begun lending money instead to private businesses.
State lawmakers created the Green Energy Market Securitization, or GEMS, 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.
The goal was to lend all $150 million by the end of this month. The reality is only about $1.25 million has been lent and many of the beneficiaries are not low-income. GEMS has financed 17 solar systems totaling $577,947. The majority of those who received GEMS loans reported earning $75,000 and above. Four who received loans reported earning $100,000 or more.
This month GEMS made its largest loan, $861,500, to help pay for two solar systems at an apartment complex called 7000 Hawaii Kai Drive.
The complex has 269 units and 54 of those are designated as affordable housing units under City and County of Honolulu guidelines — renting at $1,764 for a two-bedroom and $2,635 a month for a three-bedroom.
“This could not have been done without GEMS,” said Christine Camp, president and CEO of real estate development and brokerage firm Avalon Group. “Programs like GEMS are needed and we need more of it.”
GEMS’ new commercial loan program was approved Sept. 27 by the state Public Utilities Commission and the Hawaii Green Infrastructure Authority, which oversees GEMS.
When proposing the new loan program to state regulators in August, HGIA said it planned for small businesses and for-profit apartment building owners to benefit from the program.
The commercial photovoltaic loan program “is cost effective, expands the GEMS market portfolio, reaches the underserved and furthers the state’s 100 percent (renewable energy) goal,” said state Deputy Attorney General Gregg J. Kinkley in the August filing.
The PUC listed renters as a target group for GEMS program services in 2014.
The apartments at 7000 Hawaii Kai Drive aren’t powered by the new solar system, just the common areas, including stairwells, pools, the lobby and the elevators. Renters still pay Hawaiian Electric Co. for the electricity they use in their home.
The total cost for the 7000 Hawaii Kai Drive solar system was $1.4 million. The Bank of Hawaii and Hawaii National Bank provided part of the funding.
“I’m very grateful we have a system energized and done,” Camp said. “We use every bit of power that has been generated for our common areas. We would have loved to have a much larger system so all of the units could be based on PV.”
Camp said the 20-year fixed rate to pay back the GEMS loan helps keep rents lower for the tenants.
“Power costs are lower and we can keep the rents lower,” Camp said. “We aren’t going be subject to the fluctuations of the power market.”
Since March when HECO customers paid the lowest bills this year, the typical monthly electric bill for a home using 500 kilowatt- hours has increased nearly $8 to $131.04, or 24.2 cents per kilowatt-hour.
“We’re going to be paying 16 cents per kilowatt-hour, ” Camp said.
PhotonWorks Engineering, a Hawaii-based renewable energy company, installed the 7000 Hawaii Kai Drive systems.
