Hawaii regulators nix bid to raise caps on grid-supply rooftop solar incentive

Dive Brief:

Hawaii Public Utilities Commission rejected a request from a group of solar interests to raise the cap on one of the interim distributed solar compensation schemes set in place after they eliminated retail rate net metering last year, Pacific Business News reports.
The caps on the grid supply program were hit earlier this year after reports by the solar industry, but a Hawaiian Electric Company spokesman told Utility Dive that an extensive backlog of applications will keep rooftop solar installation growth humming.
The grid-supply option credits excess energy exported from rooftop arrays at a rate slightly lower than retail, and it has been more popular than the self-supply option that discourages energy export. For that one, customers must invest in behind-the-meter technologies that many residents might not be able to afford.

Dive Insight:

Until regulators determine a final solution to compensation rooftop solar users, the self-supply option is the only one for new rooftop solar customers in Hawaii.

It was designed to incentivize behind-the-meter technologies, specifically storage. But those technologies have not, for the most part, scaled up as an affordable option for Hawaiian residents.

“I think it really speaks volumes for where demand is at for residential solar and storage,” GTM analyst Cory Honeyman told Utility Dive earlier this year. “The economics are still some years away from seeing some real meaningful scale even in a market like Hawaii.”

Now the health of the solar industry, which already took economic hits back in March, is in question.

“What kind of local solar industry will be left standing in late 2017 is a major question mark." Marco Mangelsdorf, told Pacific Business News following the regulators' decision this week.

Starting in March, the solar industry sounded alarm bells, saying 10 of the state's 16 solar installers intended to downsize after the PUC terminated the net metering program. Coupled with hitting the caps on the grid-supply option, which closely resembled the original net metering program, the solar industry is scrambling to provide other options for customers seeking connection under the CSS choice.

Already companies like Tesla and Sunrun are packaging integrated solar+storage options for residents that could ease financial pains. But those systems can cost roughly $40,000 — a prodigious investment for an average resident whose yearly income averages $69,000.

One thing is for sure, Mangelsdorf told PBN, Hawaii is entering "uncharted waters" transitioning from an "export-based model." The PUC plans more hearings for the solar industry to arrive at a permanent compensation scheme in the new year.