Lawmakers call hearing to discuss HECO's solar policy changes

HONOLULU (HawaiiNewsNow) - The Hawaiian Electric Company answered to lawmakers Monday afternoon about a new policy requiring its approval before solar photovoltaic installations.  HECO says the change, which went into effect, September 6, ensures its circuits have the capacity to remain reliable as PV growth skyrockets in Hawai'i. Critics say the new policy has crippled the industry and left hundreds of customers who were at various stages in the transition to solar in limbo.

It was standing room only at Monday's legislative hearing at the State Capitol as representatives from HECO and local solar companies gathered to discuss recent changes to photovoltaic connections and the new policy's effects.

"It's not so much that the rule wasn't necessary, that's to be determined.  The way that it's done has had significant and profound impacts on consumers and businesses," explained Leslie Cole-Brooks, the Executive Director of the Hawai'i Solar Energy Association (HSEA) during her testimony before the joint House and Senate Committees on Energy and Consumer Protection.

HECO says it needs to address safety concerns in areas where there is more electricity generated by PV than is being used.

"If you have situation such as a circuit breaker opens up in that neighborhood – that extra electricity has nowhere to go.  Nowhere to go, but causing voltage to increase which can damage people's appliances it can also cause injury to people who may be working on electrical equipment," described Scott Seu, Vice President of Energy Resources & Operations at HECO.

Installers say the new policy is hurting business during their busiest time, when people are hoping to take advantage of tax credits before the end of the year.

"We have panels stacked to our ceiling because now we can't install them at that rate that we had planned.  We had hired new people, got new trucks – and now we're sending them all home, and now they're looking for work in other industries right now," explained Chris DeBone, Managing Partner for Hawaii Energy Connection "KumuKit".

"We decided we could not put our customers at any type of risk by installing a system that ultimately they may not be able to turn on for months and months or if ever if there is no solution, nobody knows," DeBone said, explaining why his company had to postpone most installations for the month of September once the policy went into effect.

Customers say the abrupt change and resulting uncertainty has created a major financial burden.

"I took out a $9,000 dollar loan and I already paid the installation fee, but I'm still waiting for HECO to approve, so now I'm paying for a loan and I'm paying for an electric bill," explained Ray Ichihara, who says that's costing him about $700 a month

"It may end up where we have a system on our roof that may not be able to be hooked up until new studies are done which may cost us even more," said William Walker, a solar customer with Sunetric who had his system installed a month ago, but is still waiting for it to be connecting.

Seu says 81% of its 416 circuits on O'ahu still don't require interconnection studies, but certain areas may need grid improvements to allow for additional PV.  HECO is proposing that cost be passed on to new customers.

"It should be distributed to everyone regardless of when they were installed.  To penalize people just because they were the last or the latest customers is totally unfair," said Ronald Hayashi.  He signed up for a photovoltaic system with Mercury Solar weeks ago, but he's still waiting for his application to be approved.

Lawmakers say it's critical the state meets its renewable energy goals, which is 40% by 2030.

"We want to make sure that we can iron this out so that people have jobs, so that the industry continues to grow, so that people, more than anything, are able to take advantage of renewable energy to save money and get us to our clean energy goals," said Representative Chris Lee, Chair of the House Committee on Energy & Environmental Protection.

Lee says he was encouraged to hear HECO acknowledge it needs to do a better job working with the solar companies and consumers to help their customers continue to reduce costs in the future and provide certainty to the solar industry.

"There are clear technical challenges which need to be overcome and it's apparent that both HECO and the solar industry will have to adapt in the years ahead," Rep. Lee said.  "It was a good start to a discussion about the future of our energy landscape in Hawai'i and the viability of our utilities business model."

Installers worry the utility isn't prepared for a growing renewable energy industry.

"Hawaiian Electric has to figure out what to do going forward.  Our concern is that there is no plan.  If we're already hitting these limits now, what does that say about us hitting our goals as a state when we're already hitting these this early in the game?  So has the grid really been updated??" DeBone asked.

"What we're doing is we are commissioning the studies right now to identify what can be done to keep adding more PV.  It's not a question of are we not prepared— what we are doing here is we're pushing the envelope beyond anywhere else in the country to figure out what the solutions are," said Seu.

According to Seu, HECO will cover the costs of the studies and once they're complete, the company will have a better understanding of the costs required for upgrades, if needed, to the system.  Seu says more PV was installed in 2012 than all the prior years combined and more than 30,000 customers are already interconnected without having to pay any fees.

"As we are adding more and more PV here in Hawai'i we are pushing ahead of the rest of the country and world in terms of how much photovoltaics we have in different neighborhoods, and the safety issue that we're talking about is up to a certain point we can add that PV, but going beyond a certain level that's where we have to understand what we need to do to make sure that we're not having situations where customers equipment may be damaged, where we have people who may be injured because we have voltage spikes," Seu said.

HECO says over 90% of PV system applications in 2013 have been approved. Since the new policy went into effect September 6 – 600 net energy metering (NEM) applications have been approved and 1,029 are pending a study and/or upgrades.

HECO has agreed to grandfather all customers with a signed NEM agreement up to and including September 6.  Seu says they will connect solar at those homes regardless of if they're in a questionable area that under new guidelines would require further studies.

Installers say that's a step in the right direction, but want that courtesy extended to September 30 to cover all customers who made significant financial commitments with the understanding they would get solar under the prior rules.  Right now, officials say hundreds are caught in the transition with no indication of what will happen.

"We think that's really unfair and we think it's a very awkward and sloppy implementation of these new rules," testified Cole-Brooks.

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