Energy storage bills fail in Hawaii, but could re-appear in next legislative session

Support for storage is widespread in Hawaii, but the state's financial situation makes new incentive funding a challenge

When the Hawaii Public Utilities Commission ended the net metering program last October, energy storage was seen as one way of bolstering the economic benefits of solar power.

But two bills that aimed to accomplish that failed when the state legislature adjourned earlier this month, putting energy storage incentives on hold until the legislature convenes again in January.

“Both died at the last minute, along with several other bills, due to a stall in unrelated negotiations between the House and Senate,” Representative Chris Lee, a Democrat and the Chair of the Committee on Energy and Environmental Protection, says.

One of the bills, S.B. 2738, would provide a rebate – the amount was not specified in the draft version – for energy storage systems. The purpose of the bill was to “assist Hawaii’s underserved residents … to install clean energy storage.” The bill characterizes underserved markets as “low to moderate income home owners, renters, churches, and non-profits.”

The bill would have taken $50 million from Hawaii’s Green Energy Market Securitization program to fund the rebates. GEMS was created by the Department of Business, Economic Development and Tourism and the Hawaii Green infrastructure Authority to provide financing for clean energy technologies for through public-private partnerships.

The second bill, HB 2291, started as an amendment to the state’s renewable portfolio standard and become an amendment of Renewable Energy Technologies Income Tax Credit (RETITC) program, extending it to include energy storage. It also introduced a step down of the existing tax credit from 35% to 25% in 2017 and, three years later, to 15%. The bill had a $5,000 cap on rebates, but for solar-plus-storage systems the cap would have been set at $10,000.

Lee, who worked on and supported both bills, expects them to be taken up again in the next legislative session, which begins in January, possibly as a single bill.

“It should be easy to pick up from where we left off, since we worked out most of the issues this year,” Lee says.

Broad support for storage, if not storage bills

The bills drew the support of a variety of environmental groups – including the Renewable Energy Action Coalition of Hawaii, the Hawaii Solar Energy Association, and Inter-Island Solar Supply – but it is not clear that all the issues have been resolved.

The Distributed Energy Resources Council of Hawaii (DERC) supported the RETITC amendment and had a hand in introducing the bill, says Leslie Cole-Brooks, executive director of the organization.

DERC is in favor of energy storage. In filed testimony the group called storage “the missing link that will allow Hawaii to make the best use of our many indigenous resources, and to greatly reduce our dependence upon imported fossil fuels.”

But DERC did not support the rebate bill. The state has a lot of financial concerns right now – footing the bill to put air conditioning in the state’s schools is one of the items at the top of the state’s agenda — so a bill that asks for more money, or even looks like it is asking for more money would face an uphill battle.

“We were concerned the rebate would have raided the GEMS authority and could not move forward,” Cole-Brooks says.

Other organizations struck a similar note, including the Hawaii Green Infrastructure Authority, which administers GEMS.

Hawaiian Electric, the state’s dominant utility, says it broadly supports energy storage, but in testimony said it did not support the amendments to the RETITC program. The company emphasized that it wants to see programs that support all of its customers.

To that end, Hawaiian Electric recommended that any policy to support energy storage should take a phased-in approach and include periodic evaluations in order to adapt to rapidly changing technologies.

The utility also recommended that customers who receive a tax credit for storage should be required to remain connected to the electric system for the life of the storage system.

Meanwhile, there are several items relating to renewable energy pending before state Public Utilities Commission, including a proposal to shift to time-of-use rates for electric customers.

DERC was hoping to use the ratified storage legislation as an incentive to push the PUC to act, but under the circumstances, Cole-Brooks says, it may have to work the other way around.

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Filed Under: Solar & Renewables Energy Storage Distributed Energy Regulation & Policy