Changes Hawaiian Electric Co. made last month in the way it processes applications for residential solar photovoltaic systems have delayed many PV installations on Oahu and cost installers millions of dollars in lost revenue, industry representatives told state lawmakers Monday.
Companies represented by the Hawaii Solar Energy Association have had to put on hold anywhere from 30 percent to 75 percent of their scheduled PV installations since HECO announced the changes Sept. 6, said Leslie Cole-Brooks, HSEA executive director.
As a result, the industry has lost "millions of dollars in revenue" and has been forced to cut hours for employees during what is normally the busiest time of year for PV companies, Cole-Brooks said at an informational briefing held by the Senate Committee on Energy and Environment and the House Committee on Commerce and Consumer Protection. PV customers typically push to get systems installed by the end of the year so they can claim tax credits for the current tax year.
HECO said Sept. 6 it had changed its solar policy as a result of increasing levels of PV generating capacity on its Oahu grid. The increase in solar capacity raised questions of safety and reliability for customers, the utility said. Exponential growth of PV installations in recent years has created a situation in which about 20 percent of neighborhoods on Oahu today have what HECO considers high penetration of solar energy generation.
One of the HECO's changes was to have customers wanting to connect a solar system to the HECO grid contact the utility to check the solar energy saturation level in their neighborhood before beginning the process of installing a PV system. HECO officials said the intent was to let customers on saturated circuits know as early as possible whether they would have to pay for any equipment upgrades to accommodate additional PV on the circuit.
Under the new policy, if HECO determines it needs to install additional equipment to support more solar systems in a neighborhood, the cost of putting in the new equipment would be paid by the customers who install PV in the future in that neighborhood. Customers who have installed PV already would not be charged.
HECO has been slow to respond to customers checking saturation levels in their neighborhoods, which has caused a backlog in solar installations, according to solar industry officials. Mark Duda, chairman of the Hawaii PV Coalition's government affairs committee, predicted that the new process will result in some PV installation companies eventually having to file for bankruptcy.
Scott Seu, HECO vice president for energy resources, told lawmakers the utility has worked to accommodate residential customers who had submitted applications before the Sept. 6 announcement but had not received final approval to connect to the HECO grid. Those 228 customers will be grandfathered in under the previous system and will not have to pay for potential equipment upgrades.
Seu also said HECO customers will eventually benefit from the changes. Homeowners in neighborhoods with high solar saturation previously could have been required to pay several thousand dollars for an interconnection study to determine whether their PV system would require the installation of additional equipment at the homeowner's expense.
Instead, HECO will do its own "representational" interconnection studies. The results of those studies, to be completed by the end of this year, will be extrapolated to cover all residential customers installing PV systems.
State Sen. Mike Gabbard, chairman of the Senate Committee on Energy and Environment, asked officials from HECO and the solar industry to report back to the Legislature by Nov. 14 on the situation.