PUC asked to reconsider solar decision

Two solar industry groups have filed a motion requesting the state Public Utilities Commission reconsider a recent decision they say could make rooftop solar systems less attractive to homeowners and small businesses.

The motion, filed last week by Hawaii Solar Energy Association and Hawaii PV Coalition, is aimed at the PUC’s Dec. 4 decision which set the terms for the next generation of solar programs, called Bring Your Own Device, or BYOD, in which customers can be compensated for using their solar-and-battery systems to support the utility grid.

But the groups’ motion says low compensation rates and other unfavorable provisions can end up costing utility ratepayers extra money to participate.

BYOD would replace the Battery Bonus program, which recently hit its program capacity limit. The solar groups are calling Battery Bonus a distributed-energy success story, in which over 46 megawatts of rooftop solar and battery systems were rapidly enrolled to help support the grid on Oahu and Maui and reduce costs when delays in Hawaiian Electric’s plans to add large-scale renewable projects led to a grid reliability crisis and bill spikes from oil prices.

Rocky Mould, executive director of HSEA, said BYOD isn’t a viable successor program. According to Mould, under the terms of BYOD, those who use their batteries to put their excess solar energy back into the grid “are being compensated, they’re just not getting the full value for it.”

“It incentivizes customers to build (solar with storage systems) only for themselves and not to provide benefits to the overall system,” Mould told the Tribune-Herald on Wednesday.

The PUC’s order sets compensation rates Hawaiian Electric is to pay solar customers who export excess stored solar energy to the grid. Those rates vary, dependent upon the island and the time of day.

On Oahu, those compensation rates are: 18.9 cents per kilowatt hour between 9 p.m. and 9 a.m.; 13.5 cents between 9 a.m. and 5 p.m.; and 32.9 cents during evening peak hours of 5 p.m. and 9 p.m.

Compensation rates for the Big Island are lower: 14.8 cents between 9 p.m. and 9 a.m.; 10.6 cents between 9 a.m. and 5 p.m.; and 23.1 cents during the evening peak hours.

The lowest rate of compensation is slated for Maui, at 13.1 center between 9 p.m. and 9 a.m.; 6.6 cents between 9 a.m. and 5 p.m.; and 18.2 cents during the evening peak.

Marco Mangelsdorf, former owner of ProVision Solar in Hilo and longtime solar energy advocate, called the compensation rates “kind of surprising for me, and I’m not sure what the rationale is for Maui to be so low.”

“But when all is said and done, if the credit rate is 6.6 cents per kilowatt hour or 10.2 cents per kilowatt hour, the reality is that it doesn’t make a whole lot of difference in the economics of the return on the investment, in my opinion,” Mangelsdorf said.

In the motion, the groups warn the PUC’s order threatens to derail progress and “cause immediate and lasting market impacts as severe or worse than the fallout eight years ago,” when the PUC’s abrupt closure of the original net-metering (NEM) program forcibly downsized the local solar industry by over 60%, triggering the loss of approximately 2,000 jobs.

“In my 15 years working with this commission, this decision is the most drastic misstep I have seen — up there with slamming the curtain on net-metering eight years ago, but with potentially more disastrous results,” said Isaac Moriwake, an attorney with Earthjustice who has represented HSEA at the PUC since 2009. “It took years for the industry and market to find its footing again after that, and we can’t afford to repeat that history.

“Whatever is going on, hopefully the PUC can turn this around without delay.”

The NEM program compensated solar customers who supplemented the grid at market value for their electricity. Those who signed up before the program was discontinued in 2015 are still receiving compensation under its terms.

Mangelsdorf said the PUC decision “seems to be a shot across the bow for NEM customers,” which, according to Mould, number about 11,000 on the Big Island.

“NEM customers get the full retail credit for whatever surplus power they feed back into the grid,” Mangelsdorf said. “And until now, there has been no direct move to change that compensation program. Apparently now, the commission is telegraphing that at some point in the future, NEM customers could see their credit rates drop.

“That would be a big deal to the 100,000 or so NEM customers who have been enjoying NEM for 20 or so years.”

Mould said he wants “reconsideration of this order in quick order” from the PUC.

”As we speak, there are solar companies that are laying off people and sidelining crews because of the uncertainty that this order has imposed upon our system,” he said.

“We’re asking the commission to quickly respond and understand the disruption and harm that this is causing, not just to the solar industry, but to our aspirations for renewable energy.”

Email John Burnett at jburnett@hawaiitribune-herald.com.