 Okay, we're back. We're live. I'm Jay Fidel. This is Marco, Mina, and me on Mondays talking about energy. Our guests are Marco and Marco Mangostorf and Mina Moreno. Welcome to the show, you guys. Hi, good to be back on. Yes, good to be back on with the three of us. Thank you so much for having us, Jay, today. All right, yeah. We're delighted to have you. We're going to talk about the fall of solar, the fall, the decline in fall of solar in Hawaii. As reported by Dwayne Shimagawa in today's PBN with help from Marco Mangostorf. And in so many other articles that have detailed the decline of solar installations over the past year or two. Dwayne reported that Hawaii's rooftop solar energy industry continues its decline according to new permit figures. He pointed out that last month, the city and County Honolulu Department of Planning and Permitting issued 194 permits, the fewest in five years, according to data from our own Marco of Provision Solar. Compared to January 2016, there was a drop of 52% of permits last month. On the Big Island, the county issued 45 permits last month, compared to 141 permits the same month last year. A drop of 68%. And last month, the county of Maui issued 54 permits compared to 233 permits a year ago, a drop of 76%. So Marco, you said, I am running out of gloomy metaphors to describe what's happening to the rooftop solar industry. And you continue to be struck by the mega chasm between all the talk of achieving renewable goals sooner while a vital industry with us away. There's a disconnect. So Marco, how strongly do you feel about that anyway? Well, I mean, I think I'm typically not someone who's prone to hyperbole. And I'm sure I have something of a rep now over the past months, if not longer, as somewhat being a solar Cassandra, seeing gloom and doom always on the horizon, if not on the horizon, you know, actually in our midst. But I have to say that in this sense, the numbers do not lie. And you cited them accurately in terms of the PV permits that have been issued by the City and County of Honolulu, County of Maui, and the County of Hawaii in January. And to me, it's nothing short of, you know, really big, big bad news and shows that the adoption rate for rooftop solar has gone down precipitously since its peak back in 2012 and 2013. And of course, I mean, of course, as a business owner who lives and breathes, putting PV systems on people's roofs, both homeowners and business owners, that I have a vested interest. I mean, that states the obvious and I'm not ashamed of that. And I would like very much for rooftop solar to continue to, if not grow at least, stabilize so that it can keep enough of us happy and healthy in terms of an adequate revenue and reasonable and sustainable profit. But I really wonder seriously, and I was at a trade show on the Kona side over the weekend and talked to a number of my fellow PV people, and there's a tremendous amount of concern. You guys, a tremendous amount of anxiety. And it really, on the kind of more macro level, if I take off my Marco self-interest hat and Provision Solar self-interest hat, to what extent should we value the continued vitality and existence of rooftop solar here in Hawaii? I mean, it's a policy question. It's a political question. And we have the Public Utilities Commission, which has the role. We have the legislature, which has the role. We have the governor, which has the role. We have other energy stakeholders, and they have roles. I mean, what value should be put on rooftop solar in terms of the benefits it provides versus the costs, including tax credits, so there's money that does not go into the state's general fund? Should we, as I quoted in Dwayne's piece, should we double, triple down on utility scale solar because it's cheaper and let rooftop solar kind of go along the wayside? So those are, to some extent, rhetorical questions. But I throw it out there for discussion because we're really at an existential place at this point regarding the local PV industry and rooftop solar. So where do we go from here? That's important, and I agree with you when you say that. So I guess the question, we should put the question to you, Mina, you live on Kauai. You've seen tremendous growth of solar there, but the solar now is utility scale. They put, you know, a couple of installations on and they've got more planned and they're successful in growing solar, but it isn't necessarily on rooftops. What's the story? How do you feel about what Marco's saying? Well, I agree with, you know, in some parts with Marco about the growth. You know, we're on an island grid and there's only so much that can go into the grid at any particular time. And I think when you look at the overall picture at how many people are actually being served by rooftop solar, it's still a small amount. And the majority of customers are being served by the electric utility. And so there's a real critical economic issue here that needs to be looked at very carefully as we move forward in policy where, you know, I don't think anybody wants to continue to oversubsidize an area at the expense of rate payers and taxpayers. So there's some real economic issues that need to be discussed. Well, let me offer this thought, though. I mean, we're on a road to 100%, and the world is too. I mean, solar is expanded exponentially on the mainland and in Europe. And so this is going to slow us down, don't you agree? And if it slows us down, then, you know, we're going to be behind the curve instead of ahead of it. We're not going to be a positive laboratory. We're going to be a negative laboratory. And we're not going to make our goals. I mean, that's the real risk here. And so if that's the case, come with me for a moment. Well, I think the thing that we have to look at carefully is we're not going to make our goals with solar alone. You know, and what we're kind of, you know, what we need is a diverse portfolio. And, you know, given the lower capacities of solar, you can't rely on solar to make your goal unless you're going to invest in more expensive technology, such as storage. And, you know, there's a real important question about who's going to bear this cost. Okay. Well, that's a big question. And the question, of course, is that if you find that the success of the project, the success of this 100% initiative is in fact dependent on solar and solar costs money and you can't do solar without state money, then the project is dependent on putting money in. And if we don't put money in, we won't make our goals. I mean, as some people feel, you know, that we're in big trouble that way because the legislature is not going to put the money in and therefore we have a goal that can't be met. Marco? Well, it's a thorny, challenging issue and I certainly hear what Mina is saying. I've been in solar now for almost 40 years and one of the things as a self-described true believer in solar is that there's really no other energy source which is as democratic as it is, as solar is, which means in practicality that it's possible to have your own mini power plant on your roof that is off-setting part or even all of your electricity needs and what kind of value do you put on that? I think it's worth something, but you know, as you're coming up with a methodology or some type of equation which is based on quantifiable numbers, right? What kind of value do you put on empowering, literally empowering people to be able to take a little bit more control of their own power situation in terms of generating their own hot water, generating part or all of their own electricity? So, how much are we driven by the bottom line in a narrow sense in terms of having 10, 15, 20, 100 megawatt utility-scale systems that is selling power to the utility company at 11 cents a kilowatt hour with storage or even less because clearly the trend lines are utility-scale solar is going down and costs just like all solar is going down and costs, and I don't have the answer here, but I think and I really believe that there is an intrinsic value that is not necessarily completely quantifiable for the benefit, that argues for the benefit of allowing people to have a degree, a greater degree of their own energy independence. Well, let me say that that doesn't watch for somebody who doesn't have solar on his roof. I don't have solar on my roof and I don't care if somebody else has a control benefit or not. I would like to see it and you said it too, that utility-scale solar is cheaper and that's being proven in Kauai and so why can't we do that? Isn't that work? Kauai is really a good model for that and in the future it seems to me we can have solar. We can expand our use of solar just the way KIUC is doing without having it on anybody's roof and I've suggested before, I don't know if this works for you Marco, but what we want to do is have all the solar installers make larger proposals, RFT proposals to the utility to build utility-scale solar in every island and that'll be cheaper, that'll be the 11 cent model. Wouldn't that save us all a lot of money? I'd probably like to get Mina's hit on this before I jump back in. Sorry Jay, I just had a hard time. I'm not sure if you're too close to the microphone. I think, well my major issue is I have no problem with somebody making their own investment and making their choice for solar, but I do have a problem when their choice is dependent on subsidization by taxpayers and other rate peers. So there's a lot of adjustments that need to go on regarding the value of solar. So that's my basic concern, that it's your choice whether you want to have a little power plant on your roof. But in having what you're saying Mina, in having what you're saying is that solar is the one. You were talking before about having a diversified array of renewables, but in fact in every island solar seems to be the most popular way of doing renewables. I mean for example on Kauai you don't have wind and I think they've made an intelligent choice not to have wind because people really don't like wind and there was all this trouble in Lanai about wind and Big Island too, I mean everybody likes solar. So what I take from the discussion so far is that solar is the way to meet the goals. Do you agree with that Mina? You know again I support having a diversified portfolio and you know it's unfortunate that we can't use more wind resources on Kauai, but again if you look at Kauai you know they're making every attempt to diversify with biomass and hydro you know onto the system. What I'm just saying is that you know we saw exponential growth in solar and we saw that exponential growth primarily because of subsidization through tax credits and also net metering. You know that trajectory can no longer continue at the expense of other ratepayers and taxpayers. And so again if you want to put solar, if you want to put energy storage on your individual home or your business you shouldn't be relying on taxpayer and ratepayer money to make that investment for yourself. If you want to sell services back to the grid those services should be properly valued that will benefit the entire system not just you know your pocketbook again at the expense of everybody else. So there needs to be this real careful balancing right now as we move forward and a real concern about who pays as we move forward. Well let me throw this thought at Marco. Marco you know the thing about rooftop solar is that it's not only the question of government subsidy the fact is that rooftop solar when it's allowed to proceed you know you don't have curtailment issues and regulatory issues and all that as we've had. It moves fast. People are excited about it. They want to do it for whatever reason. I don't think it's limited to the subsidy. I think the fact is that we've had extraordinary growth until a year or two ago and it was all because people wanted to have rooftop solar. And if we don't if we get off that I'm arguing against my own point but if we get off that and we leave it to another process and another product the likelihood is we're going to slow down in reaching 100% in being you know in moving ahead and facilitating the development and I sense that's part of what you were saying before about control but I don't see it only as control like I see it as a market process where it moves much faster when you have a free market among our you know democratic citizens. Well I mean the reality which I believe is indisputable is that net energy metering which existed from 2001 to October 2015 was an incentive and a subsidy that was deemed to be of adequate enough value to promote solar and it did tremendously. And then you also we've also had both the federal and state tax credits which have also been huge as far as offsetting a good chunk of the cost to homeowners and to investors. So it's clear that subsidies have been at play. It's clear that subsidies have benefited not a small number of people and I understand the argument. In fact I was one of the relative few in my industry back in 2015 when Hawaiian Electric announced in January 2015 that they wanted to end bringing net energy metering to an end. I was one of the few that are actually supported that and I still stand by it although it's certainly been counter to my own business interest to do that. So it's kind of you know it's where the rubber meets the road so to speak that you have in theory and in philosophy that there comes a time when the subsidy should be phased out and then there's also the pain that that type of position in my case the pain that that inflicts by that moving forward if that makes sense. But I mean just to hark back briefly to Hawaiian Electric's own proposal or own vision for the near-term introduction of more renewables what I mean by near-term this year 2017 to 2021 and they are prognostic or forecasting substantially substantially more rooftop solar for all their service territories. So you know how did they get there? Why were they so supportive in their latest power supply improvement plan submitted to the commission December 23rd? Do you know why? Do I know why? Well I have to believe without being privy to their actual deliberations that they see the value both practical and political perspective to have more rooftop solar that that's you know there are very few people I think in general who are against rooftop solar per se. So it would have been in politic I think to some extent for them to not be supportive of a lot more rooftop solar. Well we got an interesting situation here. The question is to what extent in this particular example various renewable energies in our state should be subsidized to what extent how much how much should the majority pay to benefit a minority. That's the question. I really think we're trying to figure it out. What we're going to do is take a short break. When we come back I'd like to ask each of you, Mina first, what she proposes we do at this point at this intersection if you will you know made clear by the obvious decline of solar installations. We'll be right back. Good afternoon. Howard Wiig, Code Green, ThinkTekHawaii.com. I appear on Mondays at three o'clock and my gig is energy efficiency doing more with less it's the most cost effective way that we in Hawaii are going to achieve 100% clean energy by the year 2045. I look forward to being with you. Aloha. Hello and Aloha. My name is Raya Salter and I am the host of Power of Hawaii where Hawaii comes together to figure out how we're going to work towards a clean and renewable energy future. We have exciting conversations with all kinds of stakeholders everyone who needs to come together to talk about renewable energy be they engineers, advocates, lawyers, utility executives, musicians or artists to see how we can come together to make a renewable future. Tuesdays at 1 p.m. Okay, we're back. We're live. We're here with Marco Mangelsdorf and Mina Morita talking about energy in Hawaii and talking about the decline of the solar installation industry. So I wanted to ask you guys after the discussion and raising the point about should we have further subsidies or not should we leave it to individual homeowners to build without subsidies or should we expect the utility to do utility scale solar? Let me ask you what you suggest in the way of a program. What are your suggestions for a specific initiative going forward to deal with this? Mina, you first. Well, I think it's really premature to look at another new energy storage tax credit. Right now the way the tax office is interpreting the current renewable energy income tax credit is that storage is included in that tax credit. So without understanding the ramifications of rooftop solar on the entire system and the impacts on taxpayers, definitely we should not jump into the fire with another new tax credit. Okay, Marco, what do you think? Do you think the tax credit should be reinstated or increased? Sorry, you're breaking up on me, Jane. Oh, sorry. Marco, what should we do? Well, we're waiting for the distributed energy resources docket or DER docket to play out this year as the commission and the interveners and the consumer advocate hammer out whatever phase two is going to be. And I would like to see some type of interconnect agreement, some type of tariff, that would still be available or be available in phase two that would allow for exporting into the grid your surplus PV power, number one. And number two, for that surplus power to accrue some type of value, some type of credit value, whether it's not going to be retail because NEM is dead and gone, but that's what I would like to see under the DER docket and regarding the proposed new state tax credit or one that's working both the House and the Senate in our legislature right now, as far as should there be a new state tax credit specifically for storage, and even though I haven't seen the versions of the bill or read them verbatim line by line, I would think that it's covering both residential on the customer side of the meter and then also probably utility scale solar. I would have to say, again, this is reflecting my narrow self-interest as a business owner in solar, that given the whammies that the industry has received and that consumer choices have been limited, more limited and that the cost has gone up, I would have to say when all is said and done I believe that an energy storage tax credit would be something that I would support if it gets through conference committee and all gets to the governor's desk, then it's something that I would be in favor of because I think we need something, if in fact we do value, if we do value a vital or a PV industry here, a local PV industry that is healthy and sustainable. And Amina, would you agree or disagree with that approach? I disagree with it. If they want to offer some incentive to especially residential owners that have already taken advantage of their renewable energy income tax credit for energy storage, they should have a GEMS program that loans them the money, not a tax credit. You're going to have the same people benefiting from government handouts rather than expanding the benefit to a broader... That's interesting about the GEMS program because so far the GEMS program has not been successful by any standard. Let me go to one last point before we run out of time. There's a suggestion out there to increase the number of commissioners on the PUC from three to five. Amina, you were sitting as the chair for several years on the PUC. What do you think about that? I'm sorry, what was that? I'm asking the commissioners three to five. You know, this really is a legislative decision that as the Consumer Protection Chair has said, sort of indicated a desire for a more diverse commission, including gender, geographic, and expertise, diversity. So one of the ways you get it is expanding the number of commissioners. Okay, what about you, Marco? Do you agree with that? Would you like to see... Do you think it would be beneficial for the number of commissioners to be increased? I think in principle going from three to five makes sense for the good reasons Amina mentioned. I mean, California, of course, is a much larger state than Hawaii, but it's our closest neighbor essentially. And they have had five commissioners for quite a number of years. So in terms of having a greater diversity, greater geographical representation, I mean, because right now all the commission members are based on Oahu and living on Oahu before under Amina, we at least said good to Mike Champley from Maui. So I think having greater representation of views across our canoe state, so to speak is a good thing. Well, it's nice to hear you guys agreeing on that. So we have one issue, pretty important issue where you don't necessarily agree, and on that one which may or may not happen. In fact, neither of these may happen. You agree on the second one. Well, thank you very much for joining us today, Amina, Marco and me on energy updates around the state. And I hope you guys are ready to come back two weeks from now and we'll catch up on the latest news and make more analysis here on Think Tech. Thanks so much.