State Asks PUC to Approve Solar System Loan Program
The state is seeking approvals from the Public Utilities Commission for a program designed to make solar energy systems more affordable to Hawaii residents.
The Green Energy Market Securitization or GEMS program would use up to $150 million obtained from the sale of “green” bonds for loans to put photovoltaic systems more in reach of those unable to afford or qualify for current upfront costs or lease arrangements.
According to Monday’s filing with the PUC by the Department of Business, Economic Development and Tourism, the program would target low- and moderate-income homeowners and renters.
The bonds would be secured by a “Green Infrastructure Fee” assessed on electric bills statewide.
According to DBEDT, the fee would replace part of the Public Benefits Fee already charged electric utility customers that is used to fund energy efficiency programs, and therefore would not add any costs to ratepayers.
The agency said proceeds from the bonds could be used in conjunction with private funding sources including local banks and credit unions and solar-financing companies.
Customers would be able to repay the loans with the savings on their electrical bills.
Although the lending criteria have yet to be defined, the program is intended to benefit homeowners and renters whose credit history prevents them from qualifying for conventional loans. Interest rates would also be lower than on traditional solar system loans, which as of May ranged from 4.5% to 8.9%.
“This flexibility, which would include more affordable payment options along with longer terms and better rates, will open the market to a broader range of Hawaii consumers, all of whom will be able to realize net savings,” the PUC filing said.
The filing said the GEMS program is also aimed at non-profit organizations, which typically do not own solar systems because their tax status prevents them from benefiting from tax credits, and because they often don’t have the upfront cash and cannot qualify for the lease agreements.