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One of the phrases that the Robot in the 1960s TV space drama, “Lost in Space,” was fond of repeating was: . Looking over the data for the photovoltaic industry on Oahu in 2013 initially brings about a similar experience of cognitive dissonance (the presence of incongruent relations among thoughts and understanding that can result in excessive mental stress and discomfort).

Reviewing the PV permit numbers put out by the City and County of Honolulu Department of Permitting and Planning, there was a drop of about 20 percent from 2012 (16,715 total PV permits) to 2013 (13,303 total PV permits).

And yet in 2013 there was a substantial increase in the number of Net Energy Metered (NEM) PV systems installed on Oahu, and on the Big Island as well, and solar electric capacity that went on-line.

Last year, HECO recorded 14,013 new NEM PV systems across its service territory, an increase of 62 percent over 2012. (On the Big Island there were 1,952 new NEM systems that went in last year, an increase of 13 percent over 2012 while across MECO territory 1,567 new NEM systems were recorded, a decrease of seven percent over 2012.) Overall across the service territories of HECO, HELCO and MECO, a total of 17,609 new PV installations went on-line in 2013, an increase of 39 percent over what was added in 2012. And yet, despite such apparent robust year-over-year growth, there are few celebrations going on in the offices of the large majority of Oahu PV companies. In fact, a growing grimness seems to be spreading across the industry. How can a 39 percent growth rate generate this kind of pessimism?

Although a 62 percent increase appears quite impressive, the reality is a substantial number of PV systems that were recorded by HECO as going on-line in 2013 were sold and permitted in the latter months of 2012. There has often been a significant time lag between when a permit is pulled to when a PV system is inspected and passed by an electrical inspector and approved by HECO for interconnection. So at least a portion of the impressive sounding growth in 2013 were actually sales permitted and booked in 2012.

Reviewing the 2013 permit numbers for the top 15 PV companies in 2012 reveals how an apparent 62 percent growth rate on Oahu was actually a disappointing and worrisome year for many players as far as 2013 sales.

Top 15 Contractors on Oahu in PV permits pulled in 2012

Of the top 15, only three saw their numbers go up (Vivint Solar, Hawaii Energy Connection and SolarCity) while the rest saw declines as high as 90+ percent.

Top 15 Contractors on Oahu in PV permits pulled in 2013

• Vivint Solar
• Alternate Energy
• Hawaii Energy Connection
• SolarCity
• RevoluSun/DEP Hawaii
• Elemental Energy/Sunetric
• Eco Solar
• American Electric Co.
• Haleakala Solar
• Bonterra
• Walter’s Electric
• Adon Construction
• Tee’s Electrical
• Hawaiian Island Solar
• HI-Power Solar

Another troubling trend is that there is less certainty since 2013 that a PV permit pulled leads to a system being installed and interconnected. Some of the major players are waiting for HECO approval before obtaining the required permit while others are getting the permit before utility approval, regardless whether the system will be accepted by HECO in the near-term depending on circuit saturation levels. So the lower permit numbers in 2013, especially dramatic when comparing the fourth quarter of 2012 with the same quarter of 2013, don’t tell the entire story of the slowdown when the number of operational systems going on-line in recent months is even lower. In fact when it comes to grid saturation in an increasing number of circuits, according to some of the major players, 50 or more percent of their new sales are getting the red light from HECO.

The prospects for the PV industry on Oahu for 2014 are for continued gray skies. January permit numbers are considerably lower than December 2013 as well as lower than January 2013. Colleagues that I’ve spoken to on Oahu are forecasting an accelerating consolidation of the market with as many as half of the current players exiting the playing field. Any substantive redo of the state solar tax credit seems to be off the table this session after the big push last session led nowhere. The biggest variable is and will continue to be to what extent HECO can increase its ability to accept more distributed, non-utility scale PV into their grid. One industry spokesperson opined at a public forum last fall that they were “super duper pessimistic” in the near-term because of interconnection challenges. What’s inevitable this year is that the smaller number of PV permits issued last year, and the first month of this year, will lead to a significant drop in the number of systems going on-line and recorded by HECO. The contraction of the PV pie will likely reshape the local solar electric industry into a more sustainable one albeit not without a fair amount of pain on the part of many in the business.

About the author: Marco Mangelsdorf has been in the renewable energy field for 35 years and is president of ProVision Solar Inc., a Hilo-based solar electric integrator that’s been designing and installing PV projects across the islands since 2000. He also teaches energy politics at UH Hilo.

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