Solar impact flares in Hawaii

POP Fishing and Marine recently signed a contract to install solar panels on the roof of its 28,000-square-foot building.

The total cost of the project is more than $500,000, but with the help of federal and state tax credits and reduced energy costs, the company expects to recoup its investment in about four years.

The solar panels, which will take about a week for American Pipe and Boiler to install, are estimated to generate 68 percent of the company’s total energy, resulting in a savings of $35,000 to $40,000 a year.

“Given the current state of the world, I have a hard time imagining that the price of oil isn’t going to keep going up,” said Sean Martin, the company’s president. “Looking at the numbers, solar made a lot of sense — and seems to make even more sense for the future.”

Technological advances and declining costs, combined with recent tax incentives, are making photovoltaic systems more enticing for businesses and home-owners, and increasing solar energy’s potential role in helping the state achieve its goal of 40 percent renewable energy by 2030. To help meet that demand, more than 100 Hawaii-based companies are involved in the design and construction of solar-energy systems, according to the Hawaii Solar Energy Association.

During the next several weeks, Pacific Business News will run an occasional series of stories designed to look at the status of our state’s alternative-energy options, where the best opportunities lie and what’s needed to overcome myriad obstacles.

While the solar-energy market barely existed four years ago, by the end of last year there were more than 1,800 net-metering agreements totaling 13 megawatts of power statewide. Net-metering agreements allow a user to tie directly into the electric grid. Energy generated in excess of what the project utilizes can be sold back to Hawaii’s utility companies.

Upfront costs for photovoltaic systems remain high, but the time it takes to recoup the investment has improved. Briand Achong, president of Greenpath Technologies, which installs the systems, estimates that commercial paybacks take about two to four years, while residential systems can take three to seven years to recoup costs.

Federal and state tax credits, which currently match costs dollar-for-dollar, have played a significant role in the growth of solar energy. The federal credit, valid through 2016, applies to 30 percent of the cost of purchasing and installation. There are no caps on the credit and it is nonrefundable. The state also is providing a nonrefundable tax credit of 35 percent of total costs or a refundable credit of 24.5 percent of costs. The credits are capped at $5,000 for residential installations and $500,000 for businesses. The state credit has no expiration date.

Read the full story in Pacific Business News of Honolulu.