A Hawaii solar industry association released a report Friday saying the outlook for the industry is “cloudy” because of a lack of incentive programs and market instability.

The number of residential photovoltaic permits was down 50 percent year-to-date as of Aug. 27 compared with the same period last year, according to the state Department of Business, Economic Development and Tourism. Honolulu’s number of residential PV permits was 1,549, compared with 3,101 in the same period the year prior. In line with the falling permit numbers, the combined value of photovoltaic permits year-to-date saw a 50.6 percent decrease from the same period last year, totaling $38.7 million compared with $78.3 million, according to DBEDT.

The Hawaii Solar Energy Association said nearly 79 percent of its members saw a decrease in their PV business over the last year, according to August survey responses from 19 businesses. The association said 47 percent of survey respondents were pessimistic about business in the upcoming year.

“The response from our industry continues to show significant angst,” HSEA President Rick Reed said. “Clarity, stability and incentive to adopt clean technology are the name of the game in moving forward.”

The solar industry is in an almost two-year-long slump, as it has been struggling to adapt to the loss of a popular incentive program called net energy metering (NEM), which credited residents the full retail rate for the excess energy their solar systems sent into the grid.

The state Public Utilities Commission ended the program in October 2015, replacing it with two programs — self-supply and grid-supply — that have changed throughout the two years. The grid-supply program, which credits solar owners roughly 15 cents a kilowatt-hour for the excess energy they send into the grid, has a set limit of participants. This year the PUC expanded the capacity of how many can be accepted after the first cap was reached.

“The industry continues to rely on a shrinking pool of (NEM) and (grid-supply) projects,” HSEA said, noting better incentives for energy storage, especially a rebate for the purchase of energy storage, would help the industry expand other solar programs.

The self-supply program prohibits residents from sending excess energy into the grid entirely, encouraging residents to install batteries. But officials with the city Department of Planning and Permitting faced a learning curve as battery technology evolved, causing an initial delay in battery installation. In May the city launched an online permitting system to speed up the process. “This has helped customers install solar and batteries in a timely fashion,” HSEA said.

In May and June the city issued 56 and 55 permits including batteries, respectively, according to data provided by Marco Mangelsdorf, president of Hilo-based ProVision Solar. In July that number increased to 107.

“We are beginning to see some glimmers of light with the increase in the number of PV battery storage systems being permitted,” Mangelsdorf said.