The state’s $150 million financing program designed to help low-income residents own renewable energy failed to live up to its hype, due to a long application process and a discontinued solar incentive. Despite its lackluster rollout, Hawaii residents are still on the hook to pay back the bonds.

The program called Green Energy Market Securitization, or GEMS, has been in the works since 2013 and was touted as a potential national model. The Hawaii Green Infrastructure Authority, a state agency created to run GEMS, established programs in 2015 in which consumers and nonprofits could apply for financing of rooftop solar systems.

GEMS — which aimed to help homeowners, renters and nonprofits who cannot afford the upfront costs or cannot qualify for other financing own renewable energy — was set up using proceeds from selling $150 million in state bonds to investors.

For homeowners participating in GEMS, 100 percent of upfront financing is available for solar systems.

To date, GEMS has funded 11 installations; 43 applications are in the pipeline, representing about $370,000 of the $150 million available for lending. The authority overseeing GEMS discontinued the program for nonprofits.

Originally, the program was projected to have fully deployed the $150 million by November 2016 — two years after the bonds were sold. Six months away from the goal, more than 99 percent of the funds sit untapped.

“There is still so much potential this program has that has been left unfulfilled,” said State Rep. Chris Lee (D-Kailua, Waimanalo). “We can help so many families by covering their upfront costs.”

While the program isn’t living up to its potential, Hawaii ratepayers are left supporting the bonds.

At the time of GEMS’ launch, the typical residential customer using 600 kilowatt-hours a month paid a “green infrastructure fee” of $1.29 a month to repay the bond holders.

Ratepayers will have paid about $21.5 million as of June 30 for GEMS, according to a filing submitted to the Public Utilities Commission on May 24. Going forward from July to the end of 2016, ratepayers will pay an additional $6.4 million.

“GEMS is a complex program that is among the first of its kind in the nation,” said Tara Young, executive director for the Hawaii Green Infrastructure Authority. “It is not unreasonable to expect that the implementation of the program would encounter some early obstacles.”

Young said the state ending a solar incentive program made the November 2016 goal unattainable.

“The biggest roadblocks have been changes in the macroeconomic and policy environment — most notably the end of net metering — that affect the attractiveness of existing GEMS programs,” Young said. In October, the PUC ended a popular solar crediting program that offered owners of solar-energy systems a credit equal to the retail rate for the excess energy that their systems sent into the grid.

The PUC replaced net energy metering with two programs. One replacement, grid-supply, credits new solar owners 15 cents a kilowatt-hour for the extra energy their solar-energy systems send into the grid, roughly 8 cents less than the retail rate that had been offered through net energy metering. The second replacement, called self-supply, encourages customers to buy battery systems because this program does not allow owners of solar-energy systems to send any excess energy into the electric grid.

In the period prior to the end of net energy metering, the GEMS programs had 101 new loan applications. GEMS has received only 70 since the program was halted.

When asked about the impact the PUC ending net energy metering had on the GEMS program, PUC Chairman Randy Iwase said that HGIA needs to find different ways to use the money. “Battery storage is a way we have to go,” Iwase said.

Young said HGIA supports improving access to energy storage technology for homeowners. She said the agency is broadening what renewable technologies the GEMS program can help finance, as GEMS’ existing program only focuses on solar.

“HGIA is now working hard to adapt programs to current and future market conditions, improve our responsiveness to what continues to be a dynamic and cutting-edge market, and improve processes to streamline the consumer experience,” Young said.

GEMS could be used for energy storage, utility grid modernization, utility renewable integration, commercial energy efficiency, technologies that incorporate a water-energy nexus, sewage and wastewater treatment, heating, ventilating, and air conditioning and LED systems, according to HGIA.

Another problem with the process was the difficult application residents and nonprofits faced. “There have also been process issues that have made the application process less simple and efficient than we would like,” Young said.

When the consumer loan program began in summer 2015, applicants were required to mail in or fax applications to HGIA’s underwriting partner, Energy Finance Solutions. Feedback from the installers was that the process was cumbersome, Young said.

Young said HGIA is working to make the process easier.

In March HGIA launched a customer portal with an online application. Next month automated decision-making will be added to the online application process, which will give a potential borrower immediate notice of preapproval, denial or pending status following completion and submission of the online application.

Jeff Mikulina, executive director of Blue Planet Foundation and an HGIA board member, said problems came from the program having to compete with private solar companies that offer leasing options to customers.

“The competition in terms of the private-sector offerings was pretty good,” he said. “There were challenges in making a really smooth program for both contractors and the public to participate in.”

Despite GEMS’ current numbers, Mikulina said he is confident in the program. “This funding can be used for anything that advances our clean-energy agenda,” he said. “Of course execution is another thing. We have been really frustrated with poor execution across the board of clean-energy ideas. I don’t want to put this (GEMS) in that category yet. “

While GEMS has yet to live up to its full $150 million potential, the program has helped some residents.

Mililani resident Douglas Maginot said he was referred to GEMS through his solar contractor, Island Pacific Energy, after deciding he didn’t want to take a second mortgage out on on his house or apply for a line of credit to finance his 40-panel system.

“It’s an uncollateralized loan, which is really awesome,” Maginot said. “If you had to apply for a second mortgage on your home, that is a hassle. Do I really want to have two lien holders on my house? That is the consideration versus someone who is willing to finance your solar system without taking your firstborn.”

Sheldon Dudoit of Mauisaid that after qualifying for the GEMS program he finished the installation of his roughly 40-panel system at the beginning of this year.

“This has tremendously helped us with our electric bill,” Dudoit said. “We use our AC when it is hot and (our electric bill) could reach up to $400 a month. Now we’re looking at paying something about $20 or so.”

Dudoit still has to pay back the GEMS loan, but the loan is roughly 25 percent of what his electric bill was. “Even our monthly payment for the GEMS program is way cheaper than the electric bill,” he said.