We would like to congratulate the State Legislature of Hawaii for passing Senate Bill 1087 (SB 1087), innovative legislation authorizing the first ever combination of bond financing and on-bill repayment for clean energy infrastructure, including distributed generation solar PV systems.
SB 1087 will make it less costly to deploy clean energy projects in Hawaiiby creating a loan fund capitalized by low interest utility tariff-financed bonds sold to private investors such as pension funds. SB 1087 will also make it easier for all Hawaii residents to finance solar PV hosted at their residences or businesses by providing them access to low cost loans from the loan fund that can be repaid through on-bill repayment on their utility bill. ClimateWire explains that, “because consumers will pay those back with their monthly power bills, the packages become lower-risk and easier to sell.” The state plans to make $100 million in bonds available as a start. Neil Abercrombie, Hawaii’s Democratic Governor, is expected to sign the bill which would take effect next year.
One benefit of this program is that “everybody, regardless of economic means, can access these alternative energy devices,” as stated to ClimateWire by Lowell Kalapa, President of the Tax Foundation of Hawaii. Previously people with sufficient upfront capital (or the access to capital) were the only ones installing solar PV and taking advantage of available tax credits. With this program, lower-income residents and those who can’t obtain bank loans will have access to low cost financing for solar PV. Additionally, renters of homes will be able to install solar PV panels with the approval of their landlords because the payment is attached to the meter, not the tenant.
As explained to ClimateWire by one of the creators of the concept of Property Assessed Clean Energy – “For the first time, the type of low-cost bond financing that has been available for utilities to build power plants is being made available for homeowners to put solar on their roofs.” He further explained that “this just changes the whole ballgame” and “if it is successful in Hawaii, it will be model that other states will look to.”
CGC has been working with the Hawaii State Legislature for several years to promote low cost financing mechanisms for the deployment of reasonably priced clean energy. The state goal is to have 70% clean energy by 2030; one of the highest in the country. We hope other states will follow Hawaii’s example and adopt similar financing mechanisms.