Customers will miss tax credits because the utility wasn't prepared, lawmakers say
Legislators scolded Hawaiian Electric Co. on Friday for slowing down the adoption of rooftop solar power systems, saying the delays could mean residents will miss out on a lucrative federal tax incentive.
There are 4,500 people waiting for solar approval as a result of a September 2013 rule change where HECO required customers and contractors to be approved by the utility before installing photovoltaic systems.
PV installation permits plunged 67 percent in August from the year-earlier period and were down more than 80 percent from the all-time monthly high in October 2012.
"This is a case where a serious tax credit that is helping our constituents throughout the islands is going to lapse," said state Rep. Cynthia Thielen (R, Kailua-Kaneohe Bay).
A 30 percent federal tax credit available to HECO customers who install solar systems ends Dec. 31, 2016. There is also a state tax credit for PV system installations of 35 percent up to $5,000 per system, which doesn't have an expiration date.
HECO has said it needs to slow down the addition of more rooftop solar systems because the rapid increase in PV installations in the past few years has caused concern about the stability of the electric grid.
"You should have known two years ago that it was going to go beyond what you can take," said state Sen. Donna Mercado Kim (D, Kalihi-Moanalua-Halawa) at a state Capitol briefing. "You should have figured that out. The more we give incentives, the more we give tax credits, the more you are going to encourage people, and that was the plan, encourage people. So I don't understand why we are here."
Jim Alberts, HECO senior vice president of customer service, responded that the company is looking for fixes but needs time.
"There is a whole series of solutions we have proposed to implement," Alberts said. "We just have to keep using that logical stepwise approach to implement customers over time. There isn't a silver bullet that just says everyone can interconnect."
Thielen asked why doesn't HECO approve solar systems that don't connect to the grid but provide power to the house where they are located.
"Why not move ahead with that, which would put people back to work? It lets the 4,500 people and more have some hope to move ahead," Thielen said.
The utility said it could approve what it calls nonexport PV systems in a matter of weeks.
"We can do a test. A nonexport systems is a system that exports nothing to the grid," said Alberts.
Thielen said she wanted to see data from HECO in the next three to four weeks that small-scale PV approvals are being made.
"Jim (Alberts), I'm going to hold you to that," said Thielen.
Thielen said fast-tracking solutions should be beneficial to both the customer and the utility.
"Why don't we move ahead with fast-tracking the interconnections of the photovoltaic systems that don't export and provide the ability to shift the exports on peak times? That, I understand, is technology that is available at this time," said Thielen.
Kim said she was concerned that the utility's goal for solar growth — as outlined in the energy efficiency plan that it filed with the Public Utilities Commission in August — is too conservative.
"You were talking about just a 6 percent (per year) increase when we have grown far greater than that, as you've shown. That is my problem. Nobody anticipated this growth," said Kim. "You supported tax credits. You supported us giving loans. You supported all of these programs to encourage people, encourage the industry."
Kim also questioned HECO's plan to charge a base rate of $71 a month to customers when some customers with solar systems are paying and were expecting to pay less than that.
"I'm concerned about the people who went out and took out loans based on what they were paying for their electric bill," Kim said.
"Now, all of the sudden, their bill is going to be $71," said Kim. "Had they known that ahead of time, it may not have been cost-effective for them to invest the $14,000, $15,000 in their systems."