Maui Real Estate Radio Broadcast
Show 9: Everything you need to know about solar on Maui as of 06/17/2019
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Transcription:
JUNE 17 SHOW 9
Intro The following is a paid program and does not necessarily reflect the opinions of the staff or management of visionary-related entertainment [music].
Clint Hansen You've reached Clint Hansen with Maui Real Estate Radio, the Hansen Ohana. That's mauirealestate.net. You're joining us on 11:10 AM, 98.7 FM, 96.7 FM KAOI Radio Group. Today, we have two guests with us, not just one. My other brother Daryl and say, "Hello."
Daryl Hansen Hello.
Clint He is with Pacific Energy Group as well as Byron Yap of American Saving Bank. This is his second time on the show. He talked to us yesterday about the differences, yesterday, a while ago talked to us about two months ago about the aspects of ownership over renting and it's actually a lot of times cheaper over the long haul to own and he's going to talk to us a little bit about rates today. But first, I wanted to [just] give you a little bit about assets adding ownership to your home value out of the sun. Today, we have Daryl, my brother, with us and with Pacific Energy, anyone talk to you today a little bit about where solar is today, how the tax credits are, where they're heading, and I want to talk to you about some of the pitfalls as well as positives with solar on your roof. Daryl.
Daryl Thank you, Clint. So solar originally on Maui and in Hawaii, we had net metering many years ago. Net metering allowed us to sell energy back to Maui Electric and Hawaiian Electric for the same price that we bought it from. That program was discontinued about three years ago and it was replaced with what's called customer grid supply which allowed us to sell energy back to Maui electric at a reduced rate and then buy it back at full rate.
Clint Wasn't that kind of what net metering was anyway, though? I mean it was not a 100%. It wasn't really buying back but they still just kind of acted as a battery, don't they?
Daryl Well, the grid supply net metering allowed you to [bank yours] month after month for up to a year and then grid supply did not. However, most of the island is full and grid supply is mostly closed now. Very few streets have it open. And so today, most people are going with customer self-supply which means that we don't send any energy to the grid. We either use the solar to power the house without batteries or we do solar with batteries such as the Tesla power wells where during the day the solar will power the house and the leftover energy will go into the batteries and then at night, it'll use the stored solar energy from the batteries instead of buying it from the electric company.
Clint Well, that for that buyback let's just say you top off your batteries, you'll still buy the excess energy after that?
Daryl You'll-- but if you need additional energy, yes, you're still connected to the grid. You're-- I would say it's kind of like a hybrid system. You're off grid on grid. But if you need energy, you just automatically buy it from Maui Electric. But the goal is to reduce that. And so essentially, a system today with batteries is about the same cost as a system five years ago without batteries with net metering.
Clint So what if you decided not to have batteries, you want to do that in savings, get a little bit lower at this point. It's ah-- they don't need to have batteries, do you? I mean do you that credit that goes to them.
Daryl If you-- if there happens to be-- basically, a room on the grid supply program on your circuit on your street, yes, you could do it without batteries. But you're not going to be able to get your bill down to that holy grail of the $25 area. There'll be a percentage left. And so the only way to really get rid of that is with a, you know, battery.
Clint Yeah, yeah. So they don't basically give you the full 1 for 1 credit though. They're giving you like what? 70% now.
Daryl Right now, it's about half.
Clint Half. Oh, no kidding. It's that little.
Daryl Yeah.
Clint That's too bad, man.
Daryl It's 17 cents kilo watt hour for grid supply.
Clint I'm glad I've got kilowatt hour
Daryl For grid supply and there's another similar program that's not it has its advantages disadvantage but I think it's at 12 cents a kilowatt hour. But it allows you to bank.
Clint How long is that banking good for?
Daryl A year.
Clint Okay. Sounds similar to the net metering. It's only about a year's time but it's at a reduced rate compared to the full net meter.
Daryl But keep in mind that is not avail-- it's not available to most of the island.
Clint I see. So what areas are closed right now? I mean have you come across people that are unable to feed into the grid.
Daryl Yes, about 90, more than 90% of the systems that apply are not able to back feed. They are on self-supply and we do it with one or two Tesla power walls in most cases.
Clint Yeah. Being on the grid still an essential thing for a lot of people who decide not to do that, though. I mean it's normally a benefit so that they can reduce their bills. Be less dependent on the power company.
Daryl And there are circumstances where they don't need batteries even on a cell supply. So for example, when people have a home office or a commercial building where everything's done during the day, there's much-- not much of a need for a battery if so even a small battery because the solar is producing energy during the day and you can use it.
Clint Yeah, there's a lot more evening time uses for electricity. People pump in air conditioning, refrigerators are a big cost. What, you know, the funny thing is Daryl, my brother, he put photovoltaic on my house. And when he started this long ago, he actually did it as a non-profit. He's really impassioned. He was the original guy who started MauiRealEstate.net. He's a very smart person, unfortunately yeah he is the smart one in the family, so.
Daryl Thanks Clint, [you're too] kind.
Clint Well, at least with some things anyway so. He used to have his real estate license, worked with us for quite a while but he likes to be more hands-on with projects and when he went into it, the first thing that he did and he came to my house was looked at some of the major costs of energy around my property and there were some major things. I had and still have a dinosaur of an air conditioner at my house. Every single home, every single light in my home was like incandescent or this giant, you know, heat lamp of a bulb in a bathroom. I think I had like 12 and 1 at some point.
Daryl Yeah. We called them heat lamps.
Clint Yeah, they were. They really were. They were these giant like 80-watt bulbs that you could feel the heat from when you turn it on and when you feel heat coming from something I mean that is using a lot of dew. So he went [and] he replaced every single bulb in my house. I mean I, typically, I was doing about $700 a month during the wintertime. And I have a pool and this old dinosaur air conditioning. So during the summertime, the pump was going longer. The air conditioning was on more and I was up to $1,100 a month. I saved about $180 a month by changing out the bulb. [Little] expensive. I have a lot of light bulbs. My house is about $800 to do every single one but that massive change was huge and there's other things that you do. Can you tell us about that?
Daryl Right. So we actually started in 2010 and we started really not as a solar installation company but as an energy consultation company. And it had developed into solar and we realized that that was really made the most sense. But in, for example, in your opinion though in your example about the light bulbs that few hundred dollars that you spent saved you thousands of dollars of solar on the roof.
Clint Oh, yeah.
Daryl And so that is always something that we recommend to people. If you can figure out how to lower your electric bill before doing solar, it's going to save you a lot of money upfront on the upfront cost. And so, for example, a lot of people in Hawaii, they have these expensive homes in Wailea and they install all these halogen light bulbs. Well, halogen light bulbs are a really bad idea indoors and especially, if you're having air conditioning. So halogen light bulb about half the energy goes into making heat and the other half goes into making light. So essentially, they are heat lamps and by swapping those out with LED bulbs now, not really-- lowering your demand on your air conditioning. You're also majorly lowering the amount of energy you're using in your light which will make your energy-- your house will use less energy. So now, you're saving thousands of dollars on your roof.
Clint And that's one of the reasons I actually, you know, promote my brother other than just being family. You know he actually goes the extra mile. He's not really trying to maximize his profit. He literally did this as a passion of his and it was in his initial career choice. He is very successful. He had a boat rental company. You know, he's developed our website. I mean it is a large part in 1997, you know, when the Internet was starting to become popular, we were-- he came to us and he's like, Have you heard of this thing called the Internet, you know. And when photovoltaic was really coming into popularity and I mean he already had been toying on it working with his house putting power factor, correcting devices and really maximizing the efficiency. You know, when he goes to somebody's house, that's not trying to max. He's not trying to maximize the number of panels he can throw up there. Most people are trying to be like, Let's do 40. Let's do, you know. And he actually reduces the power demand and there's very-- these little efficiencies that you can go and make changes in your home. I didn't realize too with my pool. I change it to a variable speed motor. You know, he pointed that out to me and that was massive. I didn't know that the difference between just turning up a motor on and off compared to slowly picking up compared to dropping it wouldn't be that much of a savings over time. So I mean he's really looking out for you. Another example is loans. I mean I know a lot of people are trying to do leases and that's one of the things I really want to kind of get into-- get into the greedy about and warning people. You know when it comes time to go purchase solar and you're looking for ways to do it, it seems very attractive to do a lease program. But when it comes time to sell a property, it can be negative. And I'll get into that but Daryl, tell me a little bit about that and financing, you know, and some options that people have.
Daryl Yeah we-- there are lots of financing options. We do have-- we're actually a participating member with Hawaii State Federal Credit Union. And they actually give our customers 24 months of no interest and no payments.
Clint Wow.
Daryl And so most customers are able to save their electric bills for two years, get their tax credits, and pay off around half of their system within those two years. And that one payment they do say, around month 22 or 23 will re-amortize alone and drop their payment to be much less than what they're saving on their electric bill. So it's really a no-brainer to do it especially this year knowing that we have still have the full federal tax credit and the whole State of Hawaii tax credit.
Clint So where is the federal tax credit right now? Where are we standing these days with it?
Daryl So the federal tax credit this year is 30% and that's the way it's been for many years. And next year, it's being reduced down to 26%. And the following year, I believe my memory is correct. I think it's about 22% and it goes down from there. And then again, the next year and then disappears. So that was a phase-out and in order to help get solar going and get it less expensive and it has worked solar has dropped massively in price over the-- I mean when we started panels were $1,200 a panel and they were 200 watts and now, there are over 300 watts and they're less than $300 for a base quality panel and maybe a little over a dollar what for a higher quality.
Clint Wow. That's a big difference.
Daryl Yeah.
Clint So let's-- if you're going to go the extra route and get financing for your home, be cautious. You know, a lot of options are out there for leases and say you already have a lease and it's a decent one. You know, you're getting a good rate and a lot of people like the idea of having service associated with your panel. You're like, Oh, don't worry, you know. That's why I got the lease. I don't have to worry about it. They're coming clean it and they maintain it. Well, I've had my photovoltaic for what three years now at this point.
Daryl I believe so.
Clint And there's been next to no maintenance on it whatsoever. Haven't had a single panel die on me and not one inverter has gone out and it is a relatively low process so don't let that, you know, scare you into the idea that you're going to have something to take care of. And, you know, I've been fortunate enough that we've had a couple of hard rains. And that's been enough really to clean it off. The only panels I've ever needed to clean was the ones in the paintball field. Those get a little bit more dusty right off of a gravel parking lot. So that takes a bit of maintenance. But I mean you hit it with the hose on not a hot hot day. You don't want to be hitting something hot with.
Daryl Well, you're lucky [of a] paintball field. It's an off-grid system. And it's at ground level. You can just walk up to it. You don't have get on your roof. It's a ladder.
Clint Most people aren't surrounded by a gravel, you know, an acre and a half of gravel. So when it comes to making that, it's not just the fact that you're agreeing to this lease. You know, most of the people don't realize that you know, the future contract carries with the property. And when it comes time to sell it, that can terrify a lot of people, you know, and as opposed to being a positive. For every dollar that you put in, you get about 70 cents back from your investment. And that's just from the resale value associated with the house when you have solar on it. Now if you have that lease program, you know, a lot of people see that as a negative. It actually reduces the price that you can sell the property for because as opposed to, you know, let's just say an installed system what is about a thousand dollars a panel may be a little bit more.
Daryl About there with not including the battery, yes, it's around 1,000 depending on. It could be a little less 900 even up to 1,200 depending on the quality of the panel that you're going to be installing. But that doesn't include batteries.
Clint So if you're going to be doing that and you get a lease and let's just say, Okay, you know what, I'm going to, you know, buy out the lease and I don't want to have to deal with this because I'm selling the property. The people are scared of it. Well, they're often charging three and I've seen four times as much as the value of the panel. You know, they're saying, Oh, no 3,000 or 4,000. And over the life of the loan, it's, you know, much more expensive proposition. You know you might think, Oh, I'm going to be reducing or cutting in half my electric bill. And that does make a lot of sense. It's a smart thing. And if you're going to keep the property forever, it's a good idea. But most people are keeping their home, you know, on average they say, five years. Lately, it's gone up since the subprime crisis to about eight years on average. But even if you're keeping a home for eight years, that's not going to enough time, you know.
Daryl And then the other big question is with the lease: why would you want to pay for a system for 20 years and at the end of those 20 years, not own it when you can just get a loan and have it paid for within usually four to seven years.
Clint So Byron Yap is, you know, with American Saving banks. Also here with us today.
Byron Yap I wanted to say something about the lease. One of the critical components that we find with the lease is we have to have the attorney review the lease each time because the loan may not be saleable if there is a lease on there because a lot of times, I believe the way they record the lease it creates a problem part of the time with the mortgage. So it may delay a transaction when we have to go back and revise that lease or get the lessor to approve of the lease for a new loan when they're selling the property.
Clint Yeah, I mean if people don't realize that they can really be shooting themselves in the foot by getting a lease agreement on solar panels as opposed to being an asset to the home, it ends up being a burden or a liability. And you know, a cloud on a title, you know, that's the lean on the property. It's a value asset and it's not like something and I've gotten people to the point where they're like I'm just taking the panels off the roof and telling them to come grab them. And so but do you have loan programs available at American Savings Bank right now?
Byron Yes, with the lease from - excuse me - from our perspective that we do home equity loans that offer short term financing at lower rates that for the solar are the photovoltaic purchases. Also, we've seen customers recently refinancing pulling some cash out because of the savings they're getting with the photovoltaic and restructuring their loan to be able to buy the solar photovoltaic equipment and own it free and clear without a lease on it.
Clint I highly recommend that. You do everything you can to own that. You don't want to have somebody or be beholden to a lease [crosstalk].
Daryl I mean there are some rare circumstances where leasing can make sense-- certain commercial jobs and for example, HOAs where they can't use the tax credits because it's a non-profit. In those cases, it could make sense. But by and large, if you're a homeowner, it really doesn't make any sense to [crosstalk].
Clint Run.
Daryl When you can get a loan.
Clint All right.
Byron What kind of savings? Because I don't have photovoltaic but what kind of savings would I potentially see if my bills say is around $500 air conditioning running full time? I mean doesn't have to be exact but potentially.
Daryl There's a lot of variables. A lot of it has to do with how often your home during the day and not. If people are gone all day and they just get home at say 5:00 or 6:00 in the afternoon when the sun is down then you're basically going to be you trying to use more batteries. So maybe instead of one powerwall, you might need two whereof somebody is usually home during the day to do things like run the dishwasher, run the clothes, dry and wash things, then they may only need one powerwall. So a powerwall, the price difference could be about $11,000. So just buy of changing your behavior, you could save over $10,000 which is a lot of money. So yeah, makes the difference.
Byron I know my brother-in-law had just got the photovoltaic a few years ago and every time he shows me the app that shows all the savings he's got. You know, when it's sunny when it's not sunny, you know, it's pretty interesting. But he doesn't have that powerwall. Is that something new? The power wall that's--.
Daryl Yeah. Tesla started with the powerwall one few years back. I considered that kind of a beta test on the public and it worked and they got that functioning pretty well. And now the Powerwall 2 is out. They actually have a new revision out. I called the 2.1 and that just was released literally a few weeks ago and we've installed a few of them. There are nice little update and they're amazing. So the powerwall battery-- the reason we really go with that one most of the time is the price for the performance, the quality of the software, and the monitoring, and the warranty. The warranty is the best we've seen. So they have an unlimited cycling warranty. Ten years. They don't care to see a log. They don't care to see anything. If it doesn't have 70% of the capacity after 10 years, they will either replace or refurbish it.
Clint That's a hell of a deal.
Daryl Nobody else. Nobody else has that warranty.
Clint And one of the things I've, you know, being and having family that's a photovoltaic installer, I hear a lot of the horror stories associated with some of the other systems and you know, especially if you're gonna be off grid, it's essential that you're going to want to go with Tesla. You know, there's software issues and you know parts that crap out more regularly you know. So what have you noticed? You know going off-site because that's one of the things that people have talked to you, you know, they have these buggy systems that were installed and not really working properly and you're like, Wow, you know it's--.
Daryl The amazing thing of that we've noticed with the Tesla Powerwall is they have that other component of that which is called the-- Tesla calls it the Gateway which is essentially a transfer switch with a computer built-in. And this computer communicates with the Tesla power walls which have another computer in it. And essentially every - I don't know - really few weeks, they get a software update just like the Tesla cars do and it improves functionality and adds new features and makes things faster and every time they do it, we're just amazed. We're like, Wow, we got this amazing new feature that Tesla never thought of in the beginning and here it is. And you get that basically for life in your powerwall install. It's pretty incredible.
Clint Yeah. Yeah, I'm-- so I think the biggest issue that I've known at least when communicating with other people and as the availability. I mean it's an in-demand product, isn't it?
Daryl It really is. It's been very in demand. It's been hard to get and more recently, they've been shipping well. So you've got a lot. They've got some new product lines up and running at the Gigafactory and now, they're shipping a lot more batteries more easily now.
Clint So it might be the time. I mean if you have some of the old systems and you're having lots of problems. You don't like to have somebody come out and do the maintenance on it or parts are breaking. It's not a bad idea to update to the new Tesla Powerwall. I mean even if you're just somebody who is not grandfathered in for net metering. It's a great idea. You can definitely increase the efficiency and the savings associated with your powerwall system.
Daryl Right. Especially for off-grid systems where people are using lead-acid batteries.
Clint Oh, geez.
Daryl A lot of things that [current] require a lot of maintenance where you could burn your eye with sulfuric acid and things like that and destroy your clothing. So those batteries typically get replaced every two to five years. And so powerwalls off grid, they're probably going to last although they're warranted for 10. I would say 15 to 20 years would be acceptable for them to last. And if you run a spreadsheet and you see the upfront costs of lead-acid batteries, the power walls are actually cheaper. And so especially, now that Tesla is just starting to come out with off-grid support for their powerwalls and generator support. They can charge batteries and whatnot and that's essentially just beginning now. So we're going to see a transition in the off-grid space as well with the powerwalls.
Clint And anybody out there that's been dealing with off-grid systems or the old lead acid batteries, I can't underscore the annoyance associated with having to go and put, you know, water in those batteries on a regular basis and if you forget, you're just destroying them. You're basically ruining the life of the battery and lowering the capacity.
Daryl You only have to forget once to have to go get new batteries.
Clint Yeah. So if you plan on taking a big vacation, I hope you plan on turning off the power to your property because that's going to be your real only option. That being said I wanted to talk a little bit about financing and the current rates. Oh, actually you know what I had one more question for you. I have a client who's near a golf course. So his panels keep getting hit by balls and he actually has cracked a few of those panels.
Daryl We've had a few customers that got that recently during the last tournament.
Clint Oh, no [laughter].
Daryl Well, the good thing is, is he has homeowner's insurance and the homeowner's insurance will usually cover it.
Clint Oh, no kidding. That's impressive. I'll have to ask him about that. He ended up doing-- and he didn't notice at first like it's not like the system stopped.
Daryl They continue to work. They'll output about anywhere from 100% to about 80% of the rate at power. And then over time, they'll degrade because of the cracks, the moisture will get in there.
Clint And that's what happened he actually had a couple of 100% failures on his panels and he went up there and noticed the cracks and had gotten to the point. He did replace them. I don't believe he checked to see if his homeowner's policy would take care of it but he ingeniously ended up putting up chicken wire above it. Funny thing is you wouldn't think that these little thin wires would reduce the efficiency but it really did. It actually dropped his efficiency down, you know, about 5%. You know and it might be because of how close it is to, you know, maybe it's shading the corners or something. I haven't looked at it myself. But is there any products or, you know, coatings or something to help prevent, you know, shattering like one of those cell phone covers?
Daryl You know the strongest panels we've seen are the solar worlds which are local supplier stop bringing those in, unfortunately. But we really-- it's interesting. It's hard to say we've installed some panels in Wailea right on the golf course. And we installed half on the golf course side and half on the non-golf course side. And this half that we're on the non-golf courtside had twice as many golf ball hits where we thought it would be the opposite. But it wasn't. So it's really-- it's a difficult thing to really predict and some houses on the golf course never get hit. We've just noticed that certain houses and we've theorized that it may have been something where kids were aiming for that house at one point which is the only thing I could think of.
Clint Either that or just it's because consistent shank. Was that you out there, Byron? Were you playing on that course? What, where's this house, Daryl?
Byron Yeah, where is it? [laughter]
Clint [So].
Daryl He's had enough of that. Well, let him go. Well, let him rest easy.
Clint So is there any other new products or developments that you see where technology is going? I mean I know a lot of people always ask about the Solar City roof that is probably never going to come to fruition.
Daryl Yeah. If you have a few minutes I'd love to tell you about that. So this-- Tesla bought Solar City. So there you have the solar roof tiles that are still in development. They've installed it and I think a few customers houses maybe two or three or something, mostly, Tesla employee homes. And they're still developing it. They're getting there. So far, building integrated photovoltaics are something that we're going to avoid for the reason that if something goes wrong with them you essentially have to take apart the customer's roof to find the problem. And that doesn't work for us or the customer. So we're going to avoid that until they have cell-level monitoring and bypass circuitry. And when that is available then we'll revisit that. Right now, we have three basic panels that we'd like to offer people which are the Hyundai panels, big company in Korea. Those are fantastic panels- really good quality. They start at 290 watt and go to 300 watts, they're monocrystalline, excellent panel. Our mid-tier panel-- that we like to use is a Panasonic HIT. This is probably the most popular panel. They bought it from Sanyo many years ago. They perform extremely well and hot weather in Hawaii. They have reduced degradation which means that as the panel heats up, it continues to produce a lot of power. The efficiency doesn't drop. And they also have the best warranty of any panel we've ever seen. Even better than SunPower.
Clint Oh, no kidding.
Daryl Our top tier panel is a bleeding edge panel. So those go all the way up to right now to 365 watts for a same sized standard panel. Incredibly powerful. And another really good option for people especially when you want to meet your energy goal needs and you really don't have the room on your roof. That's when you go on to go with those really high performing panels.
Clint Oh, when am I going to be able to paint my roof and just, you know, stick a couple of wires on it?
Daryl You know, we've been reading about those things on GIS mag for a couple of decades now. It's just not there yet.
Clint Yeah, the technology associated and there's too many problems with it but it'll happen. Yeah, absolutely. It's just, you know, you're basically going through a manufacturing process on your very, you know, own surface. It'll be more likely that you're going to see windows come out with a small film in it that can capture the excess electricity that's or not electricity that light that's passing through it and convert that into electricity.
Daryl So the Panasonic panels have something similar. They're a dual layer panel. And the first layer is a monocrystalline and the second layer is what called an amorphous layer. And so the light that doesn't get captured in the first layer gets captured by the second layer which is why it's a more efficient, better panel and has the best warranty because it will basically last. They're guaranteeing over 90% capacity output after 25 years.
Clint You were such a nerd. Listen to him though [crosstalk].
Daryl That's amazing.
Clint But that's-- I mean it really comes down to it. He's been so fascinated with photovoltaic and electronics since he was a young kid. And you know, growing up and him being my brother, he's always been a guide to me. If I ever have a question, I've always gone to him and relied on him. And it's great to have, you know, somebody that I can really be proud of to know when I recommend him that [there is] going to do a good job and really, you know, not be looking to do price gouging or anything like that. You want to tell people about your website.
Daryl Sure. It's Maui, dash, also known as a hyphen, solar dot com and that's our website and we have essentially every-- any information you need is really on our website. You can fill out a little questionnaire and we'll get back to you with a cost proposal. You can also refer your friends and family to us using our referral form in which case we usually have a minimum $500 referral fee for those.
Clint Do you have any email address?
Daryl We do. Its sales, sales@maui-solar.com
Clint And a phone number?
Daryl 808-280-8135.
Clint And this is again, Clint Hansen with Maui Luxury Real Estate Radio. You can find us at MauiRealestateRadio.com or go to our website, mauirealestate.net. My cellphone is 808-280-2764. Feel free to call or text anytime with your real estate related questions. While Pacific Energy is a company that is really there for you and has all the questions in regards to solar. Our website is like the Facebook of real estate. You get on there and it has every bit of information. You can link to the county. You have statistics available. It's the most up-to-date system for all the new listings to come out. We have a webcam on Charlie Young beach. And what we've been doing for all of our listings that we get is use the new Matterport camera. It's actually a 3D scanning light emitting radar camera that goes and scans the house in sections and stitches it all together. It literally creates a 3-D model of the home so you can virtually walk through it and I thought it would just be kind of something that, you know, helps us get listings and that would be about it. But the funny thing is it's really streamline the process of selling real estate. It-- twofold: one for homes, one for condos. Homes- it's great because a lot of times, you have a tenant in there and people get in. They want to see the property a second, third, fourth time, take measurements. You can do that. Light emitting radar means it's literally measuring every surface in the home and you can go in after the fact and use special editor tools to measure out rooms. So people who have like wanted to get in those multitude of time, these really help smooth out the process and the transition to that moving out of the home. The other one for condos and that's the biggest most difficult thing to sell right now. Not because of the difficulty in the market. Market's great. There's like less than 4.4 months of inventory for condos. So getting into a condo is tough. You know, they're rented. It's, you know, a business for somebody and they're not going to just most times pull it off of the market. Well, I wish they would. It would certainly make my job easier. They have to make a living. They have expenses they have to make. So we use this Matterport camera and if we can't get somebody in it, you know, I always time a text to the agent. You know, I make sure I shoot it into an email. So it's still one of the properties into consideration because most people are not going to buy something unless they can put their feet through in the door and you know, they're not going to even really consider until they can really get a feel for and that's something that Matterport lets you do. And we even got VR goggles for our Matterport but you know, the funny thing is we really couldn't get anybody to adopt that. It's [if] VR is just not there yet. But we've always been leading edge in our family and how we've designed our website and it's smooth integrated process. You just get in there and you're not forced to sign in. You have all that usability and we have a massive following and we get 55,000 unique visitors every single month that's using our website which like blows everybody else out of the water. So that again that website's mauirealestate.net and you're talking [with] my brother Daryl Hansen with Pacific Energy. What's that website again?
Daryl Maui-solar.com.
Clint All right. And I have Byron Yap here today with American Savings Bank. Hey, Byron, how's it going?
Byron Good. How are you?
Clint I'm sad. I'm really sad. We just missed the rate drop. That was crazy. It happened again. How low did the rates go?
Byron The rates last week went down to I believe 3.75 and this week they've started off the week a little higher at 4% on a 30-year fixed mortgage.
Clint That's still a phenomenal rate.
Byron Yes, very, very much phenomenal.
Clint I think that something that's really important and we did discuss this in a previous show that it is often cheaper to own a home as opposed to rent and people don't really realize that, you know, you have the ability to write off the interest, you know. And as you amortize a loan over the life of it, you know, 30 years, more of that payment is going towards a savings. So as opposed to just frivolously spending your money on rent, you're actually going in and creating a savings. It's usually-- a home purchase is one of the best investments that somebody makes. And if you want to go, we have our video that we created. It'll still be on there and I'll upload it again so that you guys can see the difference between ownership and renting and I spell it all out there. But how have has the mortgage market been for you?
Byron It's been really good. We've seen an influx of it. I believe it was December. The rates were close to 5% and we've seen quite a bit of refinances happening this year in this month alone because of the rate drop. That's one thing we've seen. Another thing we've seen is people combining the two mortgages where they had a second mortgage or a home equity loan where they've maybe bought photovoltaic or children's college education and they've combined it together to lower their payment too. And we've also seen the abundance of purchases that are happening. A lot of first-time homebuyers out there. Unfortunately, the hard thing for them is the amount of inventory available right now.
Clint Yeah, It's disastrous. I mean getting out there I have clients and I'm helping them find a property. And many times it's-- that me helping them find something that's not even on the market right now, going out there, sending brochures to neighborhoods that they're specifically looking in and or getting in contact with people that I know have been considering selling and talking to other agents. A lot more phone work these days as opposed to just the good old fashioned online listings so and having a good lender that you can rely on. Byron's been fantastic. He's one of my top recommends. It's always important to use when you decide to purchase here on Maui. A realtor that's on island, you know, especially if you're going to be purchasing a condo because every condo is unique. One of the ones I actually have Byron working on is Maui Banyan. You're familiar with that? It's-- he's one of the very few lenders that can go in there. Why is that by the way?
Byron Because Maui Banyan-- a lot of the condos by the beach are considered what we call condo hotels which allow short-term rentals. So most of the lenders don't allow or do financing in them. So one of the things that we do as a local bank, we do have-- we do specialize in financing a lot of those properties. And I would say a good majority of them if they have a timeshare were able to finance in there. The rates are a little higher because they're considered an investment running somewhere around 4.75% right now for an investor.
Clint And when I had a client in the past - this is not a current person that we're working with but a few years ago - they went to go buy a Maui Banyan and it has both a front desk which they consider that a condo hotel and they also have a few timeshare units. It's actually just one or two or three timeshare units in the entire complex. But I am like, Okay, they were adamant about using their lender in the mainland. I'm like, Look, catastrophic problems happen almost every single time. You really want to use a local lender, understands the industry, understands problem, like no, no, they're great and they've really gotten everything through him like Maui's different. Maui's different. So they were very insistent. I said, "Okay, let me talk to your banker, you know, your lender. And then when I talked to him like look you need to tell and spell out these issues, these potential problems to the underwriter. Have you caught, you know, contact her in the [road]? She's like, Absolutely, I'll contact my underwriter. Made sure she was aware that there was a couple of units in there that the specific one that they're buying is not a timeshare but that there are timeshare in there and that there's a front desk and she's like, Okay, I'll do that. And then a couple days later I'm like, Okay, did you talk to her? And she's like, Oh, yeah, it was fine. There's no problem with it. I'm like, Okay. And we got two weeks before close and she's like, Oh, we sent it in underwriting and the underwriters said we couldn't because there's a condo hotel. You know, there's a front desk there and, you know, even worse there's timeshare. I'm like, I said that. That's exactly what I said. So you know, that's one example. I had another person. They ended up buying seven, you know, him in a partnership with his wife and then a business partner and they had been purchasing properties here on Maui during the low side of the market. And all condos, you know, kind of good income generators. And between these seven properties, they literally had ownership in some banks and are like, Oh, no, you know it's really easy. I'm like, I know. I know what you're saying but catastrophic problems arise. And at the end of the day, they were 100% proven wrong because when they went to go get their loan, we ended up hitting delay after delay. So they ended up getting it through. It can get through but not without a lot of hair pulling. So if you want a smooth, painless transaction, use a local lender and Byron's there for you. He's-- he really goes the extra mile. You know, he's given his cellphone out. He has his email address that he answers on the weekend. So if you want somebody that's readily available, you know, at the pace of business, Byron's your guy. Do you have a phone number and an email address [crosstalk]?
Byron Yes. My cellphone number is 808-280-3491 and my email address is B, as in boy, Y-A-P at Apple, Sam, Bravo. That's ASB, Hawaii dot com. byap@asbhawaii.com
Clint Now, last time you were in here, we were talking a little bit about the county's gifting program. Well, actually, it wasn't a gift. It was technically a loan, right? And so how is that-- how many more have you ended up doing since then? Just the one or two more?
Byron Just the one, I think a couple of other loan officers in our bank are doing several of them. The problem has been is the availability of property in the timeline that the county has given. The good thing is the county has in certain instances expanded or helped out in the timeline to try to help out the customer to find a property. But I haven't delved in many of it. And I think a lot of it is because of the inventory that's out there right now. The non-availability of product for people.
Clint That's true, you know, and that is one of the biggest things that we're finding right now. People don't realize that it's pretty scarce property out there. And a lot of people and one of the things that [we] don't realize is the high cost of living is costing Maui to lose a lot of its people. We actually have our population dropping, you know, over year over year. The last 2, 1%. I mean that's a pretty dramatic drop. But with the costs going up, it's making it harder for people to find a place to live. And people are seeing the opportunity. When the prices go up, they're looking to sell. I mean why not, you know. Life is an opportunity. They see that chance. They take the cash. And they're going to go move to the mainland for, you know, five years, eight years and you know, purchase something there, diversify their investment, and then when the time comes, they can always come back to Maui. You know, sometimes, what they're doing is they're selling their home and they're buying a small condo here with the additional capital and then purchasing something in the mainland and you know, continuing on their savings there. So you know, there's always, you know, a bright side to it. The benefit is for Maui people who already own here. You know, they have the opportunity to sell a home at a premium and really be able to live a life of luxury by comparison to the mainland. I mean homes in just about any community other than the major cities or Southern California, you're going to be able to get nearly a mansion for the same price as a home out here. So you know, in the monthly fees are going to be dramatically less. Oftentimes, there's positions available that pays the same amount or greater in the mainland. Now, we have a very low unemployment rate here and there they're starving for qualified workers. So a lot of young people too find themselves-- I'm going to go out there and I'm going to get the work experience in the mainland. I mean a-- you know, set up roots, and then when the time comes, I'm going to come back home. Going to have that work experience, you know, be higher up on the ring and be able to afford to live here. But right now, it's tough. On average, you need about $35 an hour to afford a two bedroom apartment and you know, on the mainland it's 12 to 15 dollars an hour. So you're-- the bang for the buck is a lot better and most people that are purchasing over here are buying for the opportunity to live in the most beautiful place on the planet. And the people who live here, they have an uphill battle. So it's important that they work with an agent who understands where the inventory is and understands the market as a whole because there's so many people that I've worked with and they're like, It's got to be Kihei. I want to be in South Kihei. This is the only opportunity. I've got to live there and I end up showing him something in Kahului or upcountry, you know, for a lesser or equivalent value. They get so much more and the opportunities are even better for them. I mean I had one client that ended up buying a new traditions and which was significantly less at the homes that she was looking for over in Kihei. She absolutely loved it as opposed to having to commute 30 minutes every single day each direction. She was willing to just ride her bike to work. You know, who gets that opportunity to ride a bike to work? I mean I, you know, being a realtor that's not going to happen. I try to get an agent, you know, or a buyer on my back. I'd be a little weird. But you know, having that community that you can understand-- exactly where they're looking for is important and as an agent that sells everywhere on Maui, you know, whether that be the west side, south side, or central Maui, upcountry. You know, I understand the whole market. So-- being that and buyers doing and finding what they're looking for, there's also people with ownership and they see the opportunity to have this increased value their home and they can refinance it and do what they've been talking about, you know, getting their kids into college. So starting on the top with high costs of ownership basically means you have that opportunity to retire more comfortably anywhere else. So that's a big positive. But using your home as a bank is an important, you know, financial instrument. So what are some buyer and some assets or options available for people for refinancing a home and what have you seen from, you know, car payments, solar, or something along those lines like putting their kids in college?
Byron Well, I've seen many different circumstances for different people. One being maybe they-- they've had a couple of car loans that it was too high and combining everything together helped reduce their monthly debt outlay each month. Maybe they've co-sign on their children's loans and the children are out of college and they wanted to help them out get a fresh start. So they've refinanced the property just to have no debt for their children. That's been a couple of scenarios. There's also been like I said earlier was the HELOC where they get a home equity loan and they realize it's lower in the beginning and then there may be four or five years into it. And it's maybe at 5 or 6 percent. And they've combined the two mortgages together at 4% and had a monthly savings. So it's been there a varying scenarios and I think one of the important things is sitting down with the local bank, deciding, Okay, does this make sense or not? Some loans may make sense. Some loans may not make sense. And you can also adjust your mortgages meaning, if you had say your loan for 10 years and it was a 30-year loan, you have 20 years left. You can probably-- you might be able to refinance it into a 20-year loan and still have a savings and not add years to the mortgage or even go down to a 15-year.
Clint And that can always vary, you know, depending on what rate you're repaying, you know.
Byron Yes.
Clint If you were smart, if you were intelligent, you know, you should definitely talk to a lender and have them notify you. Be on their email list. So when that rate drops like it did just last week, you know, that you get that notification and you have the opportunity to save money or a little bit of extra capital for an investment or a vehicle or you know, something that you've been wanting to do for your family like a trip. So it's important that you see those, seek, and take those opportunities as they come. That being said, when it comes to opportunities like photovoltaic as we talked earlier with Daryl, if you're going to be going in and installing photovoltaic on your home, it is one of the best investments that you can be making. It's not just the investment that you're adding capital and value into the home. And it is not a dollar for dollar. You get about 70 cents to 75 cents for every dollar that you put in but that 25 cents is made up real quick with the fact that you're not paying the most exorbitant costs of electricity anywhere in the US. They literally are trucking in a vehicle with diesel fuel or actually jet fuel. What is it, diesel fuel?
Daryl I think it's diesel.
Byron Every single day. I mean when I was at-- in seventh grade I think it was, sixth grade. I did a field trip- the same exact powerplant, the same technology from when I was a child, it's the ones that they're using today. And it blows my mind that we have these amazing tools and resources out there. And we're on an island with limited resources and we're like, Oh, let's just truck in some diesel fuel from, you know, miles in the ground that's been through processing. In the mainland, it gets on a boat and comes over here. It's definitely a chink in the armor so--.
Daryl We'd been getting better. We'd [crosstalk] been adding a lot of wind, lot of solar. And I forget Maui county's goal was it 2030 or 2040 I forget to be 100% renewable. And it's a definitely doable goal and I don't think it'll be-- I don't think we'll have difficulty getting there because the price of solar is still dropping and the technology is improving and the price of batteries and that technology is also improving.
Clint I think [they've been] pretty conservative about those goals. Most people we're not most places-- not most people but most places that I've read about have blown those goals out of the water. They're already had a lot of people have accomplished them and I know here in Maui we were ahead of those goals as well.
Daryl I think we'll meet the goals earlier.
Clint Yeah.
Daryl [And that] we said.
Clint I mean we all want to see, you know, a 100% renewable. That'd be fantastic. It's, you know, a wonderful opportunity and a lot of people are concerned, you know, they're like, Oh, the jobs. You know, the funny thing is grid maintenance is a job. That's actually where most of the cost is. Two-thirds of the electricity costs that you can is the grid maintenance. It's, you know, maintaining those poles and those linemen work so hard to keep the lights on.
Daryl Yeah, well I mean by installing more homes with solar and batteries, we're essentially decentralizing the grid. And the more we do that, the more stable it will be. And eventually, they will probably be software to basically allow people's homes to support the grid not just take from it. So in the event of a grid outage and instead of spinning up some diesel generators, we can take solar from other homes during the day including the battery at night-- to power other parts of neighborhoods that are-- have an outage.
Clint And I've actually heard I don't know--.
Daryl We're doing this in Australia right now.
Clint Oh, no kidding. For some of the more rural communities?
Daryl Yeah, so Tesla came up with software where these-- they got a-- I think several million dollar grant and they did a test pilot program in these neighborhoods where they installed homes with solar and powerwalls and instead of doing peaker plants, the homes are providing power when there is a demand.
Clint Well, even peaker plants though were considered controversial at the time which kind of blows my mind. It is just a giant battery in the middle of nowhere.
Daryl Yeah, but the problem of the peaker plant is it takes a long time to spin up and get going. And in the meantime, you've had a few seconds of a brownout which is really bad for people's equipment.
Clint Oh, my mistake. I'm actually referring to-- it was a conversation between one of the ministers in Australia and they were working towards getting a grid stabilization because the cost of electricity is just astronomical there. Because they've been, you know, reducing their coal production and they haven't been maintaining their plants because, you know, fossil fuels are dying out. And then a lot of the people are upset about it. And I think that Elon texted something or somebody text with something.
Daryl He tweeted.
Clint Yeah. He tweeted and one of the people response is like, Well, can you actually come up. He's like, yeah, of course. So they're literally were developed a large battery, you know, in one of these regions and stabilized a lot of their power demands over--.
Daryl Saving them millions and millions of dollars every month.
Clint Dropped it like--.
Daryl And just in fuel costs.
Clint Yeah yeah. And it was-- I think also it dropped their rate dramatically because they have that on-demand power. You know, if there instead of like you said spooling up a system. Now, we're able to just simply add more [dues] to it.
Daryl And Kauai has done this well. Kauai added a huge Tesla power-packed system and was able to reduce their usage down to very little compared to what it was.
Clint Yeah, [that's] impressive.
Daryl So it's pretty incredible.
Clint I don't care about Kauai. I want Maui [laughter]. No, I love Kauai. It's a [crosstalk]--.
Daryl Well, it's closer so it's easier for people to imagine. It's right here. It's right in our backyard.
Clint And I think it's not even-- I really feel that the costs associated with maintaining those generators and having people in there, it's so simple just to simply install photovoltaic and put in a battery system and it's-- we're more prepared for disaster. Right now, if our harbor goes down, what are we going to do if we can't get fuel to that? It's a big issue.
Daryl Well, that big island quake that happened in 2006 that knocked out the power on South Maui for three days. That is the event that got me into solar. And we have-- we started doing grid-tied battery backup systems first and eventually delved into everything else.
Clint We could go and talk for hours about photovoltaic. But we're just about end of time for our show. I'm Clint Hansen with Maui Luxury Real Estate. This is my brother, Daryl Hansen with Pacific Energy.
Daryl Thanks for having me, Clint.
Clint My pleasure. And Byron Yap with American Savings Bank. Thank you for coming in.
Byron Thank you.
Clint So our website, if you want to listen to a transcript or seen any of this is mauirealestateradio.com or mauirealestate.net where you can link onto it. What's your website?
Byron W-w-w dot, it was the A-S-B Hawaii dot com. www.asbhawaii.com
Clint But your e-mail's usually the easiest.
Byron Emails easiest, yes. [music] But if you want to learn more about our bank or anything like that. You can check there.
Clint And your website?
Daryl Maui-solar.com. That's for Pacific Energy.
Clint Thank you, everybody. Have a wonderful day. Aloha.
Clint Hansen You've reached Clint Hansen with Maui Real Estate Radio, the Hansen Ohana. That's mauirealestate.net. You're joining us on 11:10 AM, 98.7 FM, 96.7 FM KAOI Radio Group. Today, we have two guests with us, not just one. My other brother Daryl and say, "Hello."
Daryl Hansen Hello.
Clint He is with Pacific Energy Group as well as Byron Yap of American Saving Bank. This is his second time on the show. He talked to us yesterday about the differences, yesterday, a while ago talked to us about two months ago about the aspects of ownership over renting and it's actually a lot of times cheaper over the long haul to own and he's going to talk to us a little bit about rates today. But first, I wanted to [just] give you a little bit about assets adding ownership to your home value out of the sun. Today, we have Daryl, my brother, with us and with Pacific Energy, anyone talk to you today a little bit about where solar is today, how the tax credits are, where they're heading, and I want to talk to you about some of the pitfalls as well as positives with solar on your roof. Daryl.
Daryl Thank you, Clint. So solar originally on Maui and in Hawaii, we had net metering many years ago. Net metering allowed us to sell energy back to Maui Electric and Hawaiian Electric for the same price that we bought it from. That program was discontinued about three years ago and it was replaced with what's called customer grid supply which allowed us to sell energy back to Maui electric at a reduced rate and then buy it back at full rate.
Clint Wasn't that kind of what net metering was anyway, though? I mean it was not a 100%. It wasn't really buying back but they still just kind of acted as a battery, don't they?
Daryl Well, the grid supply net metering allowed you to [bank yours] month after month for up to a year and then grid supply did not. However, most of the island is full and grid supply is mostly closed now. Very few streets have it open. And so today, most people are going with customer self-supply which means that we don't send any energy to the grid. We either use the solar to power the house without batteries or we do solar with batteries such as the Tesla power wells where during the day the solar will power the house and the leftover energy will go into the batteries and then at night, it'll use the stored solar energy from the batteries instead of buying it from the electric company.
Clint Well, that for that buyback let's just say you top off your batteries, you'll still buy the excess energy after that?
Daryl You'll-- but if you need additional energy, yes, you're still connected to the grid. You're-- I would say it's kind of like a hybrid system. You're off grid on grid. But if you need energy, you just automatically buy it from Maui Electric. But the goal is to reduce that. And so essentially, a system today with batteries is about the same cost as a system five years ago without batteries with net metering.
Clint So what if you decided not to have batteries, you want to do that in savings, get a little bit lower at this point. It's ah-- they don't need to have batteries, do you? I mean do you that credit that goes to them.
Daryl If you-- if there happens to be-- basically, a room on the grid supply program on your circuit on your street, yes, you could do it without batteries. But you're not going to be able to get your bill down to that holy grail of the $25 area. There'll be a percentage left. And so the only way to really get rid of that is with a, you know, battery.
Clint Yeah, yeah. So they don't basically give you the full 1 for 1 credit though. They're giving you like what? 70% now.
Daryl Right now, it's about half.
Clint Half. Oh, no kidding. It's that little.
Daryl Yeah.
Clint That's too bad, man.
Daryl It's 17 cents kilo watt hour for grid supply.
Clint I'm glad I've got kilowatt hour
Daryl For grid supply and there's another similar program that's not it has its advantages disadvantage but I think it's at 12 cents a kilowatt hour. But it allows you to bank.
Clint How long is that banking good for?
Daryl A year.
Clint Okay. Sounds similar to the net metering. It's only about a year's time but it's at a reduced rate compared to the full net meter.
Daryl But keep in mind that is not avail-- it's not available to most of the island.
Clint I see. So what areas are closed right now? I mean have you come across people that are unable to feed into the grid.
Daryl Yes, about 90, more than 90% of the systems that apply are not able to back feed. They are on self-supply and we do it with one or two Tesla power walls in most cases.
Clint Yeah. Being on the grid still an essential thing for a lot of people who decide not to do that, though. I mean it's normally a benefit so that they can reduce their bills. Be less dependent on the power company.
Daryl And there are circumstances where they don't need batteries even on a cell supply. So for example, when people have a home office or a commercial building where everything's done during the day, there's much-- not much of a need for a battery if so even a small battery because the solar is producing energy during the day and you can use it.
Clint Yeah, there's a lot more evening time uses for electricity. People pump in air conditioning, refrigerators are a big cost. What, you know, the funny thing is Daryl, my brother, he put photovoltaic on my house. And when he started this long ago, he actually did it as a non-profit. He's really impassioned. He was the original guy who started MauiRealEstate.net. He's a very smart person, unfortunately yeah he is the smart one in the family, so.
Daryl Thanks Clint, [you're too] kind.
Clint Well, at least with some things anyway so. He used to have his real estate license, worked with us for quite a while but he likes to be more hands-on with projects and when he went into it, the first thing that he did and he came to my house was looked at some of the major costs of energy around my property and there were some major things. I had and still have a dinosaur of an air conditioner at my house. Every single home, every single light in my home was like incandescent or this giant, you know, heat lamp of a bulb in a bathroom. I think I had like 12 and 1 at some point.
Daryl Yeah. We called them heat lamps.
Clint Yeah, they were. They really were. They were these giant like 80-watt bulbs that you could feel the heat from when you turn it on and when you feel heat coming from something I mean that is using a lot of dew. So he went [and] he replaced every single bulb in my house. I mean I, typically, I was doing about $700 a month during the wintertime. And I have a pool and this old dinosaur air conditioning. So during the summertime, the pump was going longer. The air conditioning was on more and I was up to $1,100 a month. I saved about $180 a month by changing out the bulb. [Little] expensive. I have a lot of light bulbs. My house is about $800 to do every single one but that massive change was huge and there's other things that you do. Can you tell us about that?
Daryl Right. So we actually started in 2010 and we started really not as a solar installation company but as an energy consultation company. And it had developed into solar and we realized that that was really made the most sense. But in, for example, in your opinion though in your example about the light bulbs that few hundred dollars that you spent saved you thousands of dollars of solar on the roof.
Clint Oh, yeah.
Daryl And so that is always something that we recommend to people. If you can figure out how to lower your electric bill before doing solar, it's going to save you a lot of money upfront on the upfront cost. And so, for example, a lot of people in Hawaii, they have these expensive homes in Wailea and they install all these halogen light bulbs. Well, halogen light bulbs are a really bad idea indoors and especially, if you're having air conditioning. So halogen light bulb about half the energy goes into making heat and the other half goes into making light. So essentially, they are heat lamps and by swapping those out with LED bulbs now, not really-- lowering your demand on your air conditioning. You're also majorly lowering the amount of energy you're using in your light which will make your energy-- your house will use less energy. So now, you're saving thousands of dollars on your roof.
Clint And that's one of the reasons I actually, you know, promote my brother other than just being family. You know he actually goes the extra mile. He's not really trying to maximize his profit. He literally did this as a passion of his and it was in his initial career choice. He is very successful. He had a boat rental company. You know, he's developed our website. I mean it is a large part in 1997, you know, when the Internet was starting to become popular, we were-- he came to us and he's like, Have you heard of this thing called the Internet, you know. And when photovoltaic was really coming into popularity and I mean he already had been toying on it working with his house putting power factor, correcting devices and really maximizing the efficiency. You know, when he goes to somebody's house, that's not trying to max. He's not trying to maximize the number of panels he can throw up there. Most people are trying to be like, Let's do 40. Let's do, you know. And he actually reduces the power demand and there's very-- these little efficiencies that you can go and make changes in your home. I didn't realize too with my pool. I change it to a variable speed motor. You know, he pointed that out to me and that was massive. I didn't know that the difference between just turning up a motor on and off compared to slowly picking up compared to dropping it wouldn't be that much of a savings over time. So I mean he's really looking out for you. Another example is loans. I mean I know a lot of people are trying to do leases and that's one of the things I really want to kind of get into-- get into the greedy about and warning people. You know when it comes time to go purchase solar and you're looking for ways to do it, it seems very attractive to do a lease program. But when it comes time to sell a property, it can be negative. And I'll get into that but Daryl, tell me a little bit about that and financing, you know, and some options that people have.
Daryl Yeah we-- there are lots of financing options. We do have-- we're actually a participating member with Hawaii State Federal Credit Union. And they actually give our customers 24 months of no interest and no payments.
Clint Wow.
Daryl And so most customers are able to save their electric bills for two years, get their tax credits, and pay off around half of their system within those two years. And that one payment they do say, around month 22 or 23 will re-amortize alone and drop their payment to be much less than what they're saving on their electric bill. So it's really a no-brainer to do it especially this year knowing that we have still have the full federal tax credit and the whole State of Hawaii tax credit.
Clint So where is the federal tax credit right now? Where are we standing these days with it?
Daryl So the federal tax credit this year is 30% and that's the way it's been for many years. And next year, it's being reduced down to 26%. And the following year, I believe my memory is correct. I think it's about 22% and it goes down from there. And then again, the next year and then disappears. So that was a phase-out and in order to help get solar going and get it less expensive and it has worked solar has dropped massively in price over the-- I mean when we started panels were $1,200 a panel and they were 200 watts and now, there are over 300 watts and they're less than $300 for a base quality panel and maybe a little over a dollar what for a higher quality.
Clint Wow. That's a big difference.
Daryl Yeah.
Clint So let's-- if you're going to go the extra route and get financing for your home, be cautious. You know, a lot of options are out there for leases and say you already have a lease and it's a decent one. You know, you're getting a good rate and a lot of people like the idea of having service associated with your panel. You're like, Oh, don't worry, you know. That's why I got the lease. I don't have to worry about it. They're coming clean it and they maintain it. Well, I've had my photovoltaic for what three years now at this point.
Daryl I believe so.
Clint And there's been next to no maintenance on it whatsoever. Haven't had a single panel die on me and not one inverter has gone out and it is a relatively low process so don't let that, you know, scare you into the idea that you're going to have something to take care of. And, you know, I've been fortunate enough that we've had a couple of hard rains. And that's been enough really to clean it off. The only panels I've ever needed to clean was the ones in the paintball field. Those get a little bit more dusty right off of a gravel parking lot. So that takes a bit of maintenance. But I mean you hit it with the hose on not a hot hot day. You don't want to be hitting something hot with.
Daryl Well, you're lucky [of a] paintball field. It's an off-grid system. And it's at ground level. You can just walk up to it. You don't have get on your roof. It's a ladder.
Clint Most people aren't surrounded by a gravel, you know, an acre and a half of gravel. So when it comes to making that, it's not just the fact that you're agreeing to this lease. You know, most of the people don't realize that you know, the future contract carries with the property. And when it comes time to sell it, that can terrify a lot of people, you know, and as opposed to being a positive. For every dollar that you put in, you get about 70 cents back from your investment. And that's just from the resale value associated with the house when you have solar on it. Now if you have that lease program, you know, a lot of people see that as a negative. It actually reduces the price that you can sell the property for because as opposed to, you know, let's just say an installed system what is about a thousand dollars a panel may be a little bit more.
Daryl About there with not including the battery, yes, it's around 1,000 depending on. It could be a little less 900 even up to 1,200 depending on the quality of the panel that you're going to be installing. But that doesn't include batteries.
Clint So if you're going to be doing that and you get a lease and let's just say, Okay, you know what, I'm going to, you know, buy out the lease and I don't want to have to deal with this because I'm selling the property. The people are scared of it. Well, they're often charging three and I've seen four times as much as the value of the panel. You know, they're saying, Oh, no 3,000 or 4,000. And over the life of the loan, it's, you know, much more expensive proposition. You know you might think, Oh, I'm going to be reducing or cutting in half my electric bill. And that does make a lot of sense. It's a smart thing. And if you're going to keep the property forever, it's a good idea. But most people are keeping their home, you know, on average they say, five years. Lately, it's gone up since the subprime crisis to about eight years on average. But even if you're keeping a home for eight years, that's not going to enough time, you know.
Daryl And then the other big question is with the lease: why would you want to pay for a system for 20 years and at the end of those 20 years, not own it when you can just get a loan and have it paid for within usually four to seven years.
Clint So Byron Yap is, you know, with American Saving banks. Also here with us today.
Byron Yap I wanted to say something about the lease. One of the critical components that we find with the lease is we have to have the attorney review the lease each time because the loan may not be saleable if there is a lease on there because a lot of times, I believe the way they record the lease it creates a problem part of the time with the mortgage. So it may delay a transaction when we have to go back and revise that lease or get the lessor to approve of the lease for a new loan when they're selling the property.
Clint Yeah, I mean if people don't realize that they can really be shooting themselves in the foot by getting a lease agreement on solar panels as opposed to being an asset to the home, it ends up being a burden or a liability. And you know, a cloud on a title, you know, that's the lean on the property. It's a value asset and it's not like something and I've gotten people to the point where they're like I'm just taking the panels off the roof and telling them to come grab them. And so but do you have loan programs available at American Savings Bank right now?
Byron Yes, with the lease from - excuse me - from our perspective that we do home equity loans that offer short term financing at lower rates that for the solar are the photovoltaic purchases. Also, we've seen customers recently refinancing pulling some cash out because of the savings they're getting with the photovoltaic and restructuring their loan to be able to buy the solar photovoltaic equipment and own it free and clear without a lease on it.
Clint I highly recommend that. You do everything you can to own that. You don't want to have somebody or be beholden to a lease [crosstalk].
Daryl I mean there are some rare circumstances where leasing can make sense-- certain commercial jobs and for example, HOAs where they can't use the tax credits because it's a non-profit. In those cases, it could make sense. But by and large, if you're a homeowner, it really doesn't make any sense to [crosstalk].
Clint Run.
Daryl When you can get a loan.
Clint All right.
Byron What kind of savings? Because I don't have photovoltaic but what kind of savings would I potentially see if my bills say is around $500 air conditioning running full time? I mean doesn't have to be exact but potentially.
Daryl There's a lot of variables. A lot of it has to do with how often your home during the day and not. If people are gone all day and they just get home at say 5:00 or 6:00 in the afternoon when the sun is down then you're basically going to be you trying to use more batteries. So maybe instead of one powerwall, you might need two whereof somebody is usually home during the day to do things like run the dishwasher, run the clothes, dry and wash things, then they may only need one powerwall. So a powerwall, the price difference could be about $11,000. So just buy of changing your behavior, you could save over $10,000 which is a lot of money. So yeah, makes the difference.
Byron I know my brother-in-law had just got the photovoltaic a few years ago and every time he shows me the app that shows all the savings he's got. You know, when it's sunny when it's not sunny, you know, it's pretty interesting. But he doesn't have that powerwall. Is that something new? The power wall that's--.
Daryl Yeah. Tesla started with the powerwall one few years back. I considered that kind of a beta test on the public and it worked and they got that functioning pretty well. And now the Powerwall 2 is out. They actually have a new revision out. I called the 2.1 and that just was released literally a few weeks ago and we've installed a few of them. There are nice little update and they're amazing. So the powerwall battery-- the reason we really go with that one most of the time is the price for the performance, the quality of the software, and the monitoring, and the warranty. The warranty is the best we've seen. So they have an unlimited cycling warranty. Ten years. They don't care to see a log. They don't care to see anything. If it doesn't have 70% of the capacity after 10 years, they will either replace or refurbish it.
Clint That's a hell of a deal.
Daryl Nobody else. Nobody else has that warranty.
Clint And one of the things I've, you know, being and having family that's a photovoltaic installer, I hear a lot of the horror stories associated with some of the other systems and you know, especially if you're gonna be off grid, it's essential that you're going to want to go with Tesla. You know, there's software issues and you know parts that crap out more regularly you know. So what have you noticed? You know going off-site because that's one of the things that people have talked to you, you know, they have these buggy systems that were installed and not really working properly and you're like, Wow, you know it's--.
Daryl The amazing thing of that we've noticed with the Tesla Powerwall is they have that other component of that which is called the-- Tesla calls it the Gateway which is essentially a transfer switch with a computer built-in. And this computer communicates with the Tesla power walls which have another computer in it. And essentially every - I don't know - really few weeks, they get a software update just like the Tesla cars do and it improves functionality and adds new features and makes things faster and every time they do it, we're just amazed. We're like, Wow, we got this amazing new feature that Tesla never thought of in the beginning and here it is. And you get that basically for life in your powerwall install. It's pretty incredible.
Clint Yeah. Yeah, I'm-- so I think the biggest issue that I've known at least when communicating with other people and as the availability. I mean it's an in-demand product, isn't it?
Daryl It really is. It's been very in demand. It's been hard to get and more recently, they've been shipping well. So you've got a lot. They've got some new product lines up and running at the Gigafactory and now, they're shipping a lot more batteries more easily now.
Clint So it might be the time. I mean if you have some of the old systems and you're having lots of problems. You don't like to have somebody come out and do the maintenance on it or parts are breaking. It's not a bad idea to update to the new Tesla Powerwall. I mean even if you're just somebody who is not grandfathered in for net metering. It's a great idea. You can definitely increase the efficiency and the savings associated with your powerwall system.
Daryl Right. Especially for off-grid systems where people are using lead-acid batteries.
Clint Oh, geez.
Daryl A lot of things that [current] require a lot of maintenance where you could burn your eye with sulfuric acid and things like that and destroy your clothing. So those batteries typically get replaced every two to five years. And so powerwalls off grid, they're probably going to last although they're warranted for 10. I would say 15 to 20 years would be acceptable for them to last. And if you run a spreadsheet and you see the upfront costs of lead-acid batteries, the power walls are actually cheaper. And so especially, now that Tesla is just starting to come out with off-grid support for their powerwalls and generator support. They can charge batteries and whatnot and that's essentially just beginning now. So we're going to see a transition in the off-grid space as well with the powerwalls.
Clint And anybody out there that's been dealing with off-grid systems or the old lead acid batteries, I can't underscore the annoyance associated with having to go and put, you know, water in those batteries on a regular basis and if you forget, you're just destroying them. You're basically ruining the life of the battery and lowering the capacity.
Daryl You only have to forget once to have to go get new batteries.
Clint Yeah. So if you plan on taking a big vacation, I hope you plan on turning off the power to your property because that's going to be your real only option. That being said I wanted to talk a little bit about financing and the current rates. Oh, actually you know what I had one more question for you. I have a client who's near a golf course. So his panels keep getting hit by balls and he actually has cracked a few of those panels.
Daryl We've had a few customers that got that recently during the last tournament.
Clint Oh, no [laughter].
Daryl Well, the good thing is, is he has homeowner's insurance and the homeowner's insurance will usually cover it.
Clint Oh, no kidding. That's impressive. I'll have to ask him about that. He ended up doing-- and he didn't notice at first like it's not like the system stopped.
Daryl They continue to work. They'll output about anywhere from 100% to about 80% of the rate at power. And then over time, they'll degrade because of the cracks, the moisture will get in there.
Clint And that's what happened he actually had a couple of 100% failures on his panels and he went up there and noticed the cracks and had gotten to the point. He did replace them. I don't believe he checked to see if his homeowner's policy would take care of it but he ingeniously ended up putting up chicken wire above it. Funny thing is you wouldn't think that these little thin wires would reduce the efficiency but it really did. It actually dropped his efficiency down, you know, about 5%. You know and it might be because of how close it is to, you know, maybe it's shading the corners or something. I haven't looked at it myself. But is there any products or, you know, coatings or something to help prevent, you know, shattering like one of those cell phone covers?
Daryl You know the strongest panels we've seen are the solar worlds which are local supplier stop bringing those in, unfortunately. But we really-- it's interesting. It's hard to say we've installed some panels in Wailea right on the golf course. And we installed half on the golf course side and half on the non-golf course side. And this half that we're on the non-golf courtside had twice as many golf ball hits where we thought it would be the opposite. But it wasn't. So it's really-- it's a difficult thing to really predict and some houses on the golf course never get hit. We've just noticed that certain houses and we've theorized that it may have been something where kids were aiming for that house at one point which is the only thing I could think of.
Clint Either that or just it's because consistent shank. Was that you out there, Byron? Were you playing on that course? What, where's this house, Daryl?
Byron Yeah, where is it? [laughter]
Clint [So].
Daryl He's had enough of that. Well, let him go. Well, let him rest easy.
Clint So is there any other new products or developments that you see where technology is going? I mean I know a lot of people always ask about the Solar City roof that is probably never going to come to fruition.
Daryl Yeah. If you have a few minutes I'd love to tell you about that. So this-- Tesla bought Solar City. So there you have the solar roof tiles that are still in development. They've installed it and I think a few customers houses maybe two or three or something, mostly, Tesla employee homes. And they're still developing it. They're getting there. So far, building integrated photovoltaics are something that we're going to avoid for the reason that if something goes wrong with them you essentially have to take apart the customer's roof to find the problem. And that doesn't work for us or the customer. So we're going to avoid that until they have cell-level monitoring and bypass circuitry. And when that is available then we'll revisit that. Right now, we have three basic panels that we'd like to offer people which are the Hyundai panels, big company in Korea. Those are fantastic panels- really good quality. They start at 290 watt and go to 300 watts, they're monocrystalline, excellent panel. Our mid-tier panel-- that we like to use is a Panasonic HIT. This is probably the most popular panel. They bought it from Sanyo many years ago. They perform extremely well and hot weather in Hawaii. They have reduced degradation which means that as the panel heats up, it continues to produce a lot of power. The efficiency doesn't drop. And they also have the best warranty of any panel we've ever seen. Even better than SunPower.
Clint Oh, no kidding.
Daryl Our top tier panel is a bleeding edge panel. So those go all the way up to right now to 365 watts for a same sized standard panel. Incredibly powerful. And another really good option for people especially when you want to meet your energy goal needs and you really don't have the room on your roof. That's when you go on to go with those really high performing panels.
Clint Oh, when am I going to be able to paint my roof and just, you know, stick a couple of wires on it?
Daryl You know, we've been reading about those things on GIS mag for a couple of decades now. It's just not there yet.
Clint Yeah, the technology associated and there's too many problems with it but it'll happen. Yeah, absolutely. It's just, you know, you're basically going through a manufacturing process on your very, you know, own surface. It'll be more likely that you're going to see windows come out with a small film in it that can capture the excess electricity that's or not electricity that light that's passing through it and convert that into electricity.
Daryl So the Panasonic panels have something similar. They're a dual layer panel. And the first layer is a monocrystalline and the second layer is what called an amorphous layer. And so the light that doesn't get captured in the first layer gets captured by the second layer which is why it's a more efficient, better panel and has the best warranty because it will basically last. They're guaranteeing over 90% capacity output after 25 years.
Clint You were such a nerd. Listen to him though [crosstalk].
Daryl That's amazing.
Clint But that's-- I mean it really comes down to it. He's been so fascinated with photovoltaic and electronics since he was a young kid. And you know, growing up and him being my brother, he's always been a guide to me. If I ever have a question, I've always gone to him and relied on him. And it's great to have, you know, somebody that I can really be proud of to know when I recommend him that [there is] going to do a good job and really, you know, not be looking to do price gouging or anything like that. You want to tell people about your website.
Daryl Sure. It's Maui, dash, also known as a hyphen, solar dot com and that's our website and we have essentially every-- any information you need is really on our website. You can fill out a little questionnaire and we'll get back to you with a cost proposal. You can also refer your friends and family to us using our referral form in which case we usually have a minimum $500 referral fee for those.
Clint Do you have any email address?
Daryl We do. Its sales, sales@maui-solar.com
Clint And a phone number?
Daryl 808-280-8135.
Clint And this is again, Clint Hansen with Maui Luxury Real Estate Radio. You can find us at MauiRealestateRadio.com or go to our website, mauirealestate.net. My cellphone is 808-280-2764. Feel free to call or text anytime with your real estate related questions. While Pacific Energy is a company that is really there for you and has all the questions in regards to solar. Our website is like the Facebook of real estate. You get on there and it has every bit of information. You can link to the county. You have statistics available. It's the most up-to-date system for all the new listings to come out. We have a webcam on Charlie Young beach. And what we've been doing for all of our listings that we get is use the new Matterport camera. It's actually a 3D scanning light emitting radar camera that goes and scans the house in sections and stitches it all together. It literally creates a 3-D model of the home so you can virtually walk through it and I thought it would just be kind of something that, you know, helps us get listings and that would be about it. But the funny thing is it's really streamline the process of selling real estate. It-- twofold: one for homes, one for condos. Homes- it's great because a lot of times, you have a tenant in there and people get in. They want to see the property a second, third, fourth time, take measurements. You can do that. Light emitting radar means it's literally measuring every surface in the home and you can go in after the fact and use special editor tools to measure out rooms. So people who have like wanted to get in those multitude of time, these really help smooth out the process and the transition to that moving out of the home. The other one for condos and that's the biggest most difficult thing to sell right now. Not because of the difficulty in the market. Market's great. There's like less than 4.4 months of inventory for condos. So getting into a condo is tough. You know, they're rented. It's, you know, a business for somebody and they're not going to just most times pull it off of the market. Well, I wish they would. It would certainly make my job easier. They have to make a living. They have expenses they have to make. So we use this Matterport camera and if we can't get somebody in it, you know, I always time a text to the agent. You know, I make sure I shoot it into an email. So it's still one of the properties into consideration because most people are not going to buy something unless they can put their feet through in the door and you know, they're not going to even really consider until they can really get a feel for and that's something that Matterport lets you do. And we even got VR goggles for our Matterport but you know, the funny thing is we really couldn't get anybody to adopt that. It's [if] VR is just not there yet. But we've always been leading edge in our family and how we've designed our website and it's smooth integrated process. You just get in there and you're not forced to sign in. You have all that usability and we have a massive following and we get 55,000 unique visitors every single month that's using our website which like blows everybody else out of the water. So that again that website's mauirealestate.net and you're talking [with] my brother Daryl Hansen with Pacific Energy. What's that website again?
Daryl Maui-solar.com.
Clint All right. And I have Byron Yap here today with American Savings Bank. Hey, Byron, how's it going?
Byron Good. How are you?
Clint I'm sad. I'm really sad. We just missed the rate drop. That was crazy. It happened again. How low did the rates go?
Byron The rates last week went down to I believe 3.75 and this week they've started off the week a little higher at 4% on a 30-year fixed mortgage.
Clint That's still a phenomenal rate.
Byron Yes, very, very much phenomenal.
Clint I think that something that's really important and we did discuss this in a previous show that it is often cheaper to own a home as opposed to rent and people don't really realize that, you know, you have the ability to write off the interest, you know. And as you amortize a loan over the life of it, you know, 30 years, more of that payment is going towards a savings. So as opposed to just frivolously spending your money on rent, you're actually going in and creating a savings. It's usually-- a home purchase is one of the best investments that somebody makes. And if you want to go, we have our video that we created. It'll still be on there and I'll upload it again so that you guys can see the difference between ownership and renting and I spell it all out there. But how have has the mortgage market been for you?
Byron It's been really good. We've seen an influx of it. I believe it was December. The rates were close to 5% and we've seen quite a bit of refinances happening this year in this month alone because of the rate drop. That's one thing we've seen. Another thing we've seen is people combining the two mortgages where they had a second mortgage or a home equity loan where they've maybe bought photovoltaic or children's college education and they've combined it together to lower their payment too. And we've also seen the abundance of purchases that are happening. A lot of first-time homebuyers out there. Unfortunately, the hard thing for them is the amount of inventory available right now.
Clint Yeah, It's disastrous. I mean getting out there I have clients and I'm helping them find a property. And many times it's-- that me helping them find something that's not even on the market right now, going out there, sending brochures to neighborhoods that they're specifically looking in and or getting in contact with people that I know have been considering selling and talking to other agents. A lot more phone work these days as opposed to just the good old fashioned online listings so and having a good lender that you can rely on. Byron's been fantastic. He's one of my top recommends. It's always important to use when you decide to purchase here on Maui. A realtor that's on island, you know, especially if you're going to be purchasing a condo because every condo is unique. One of the ones I actually have Byron working on is Maui Banyan. You're familiar with that? It's-- he's one of the very few lenders that can go in there. Why is that by the way?
Byron Because Maui Banyan-- a lot of the condos by the beach are considered what we call condo hotels which allow short-term rentals. So most of the lenders don't allow or do financing in them. So one of the things that we do as a local bank, we do have-- we do specialize in financing a lot of those properties. And I would say a good majority of them if they have a timeshare were able to finance in there. The rates are a little higher because they're considered an investment running somewhere around 4.75% right now for an investor.
Clint And when I had a client in the past - this is not a current person that we're working with but a few years ago - they went to go buy a Maui Banyan and it has both a front desk which they consider that a condo hotel and they also have a few timeshare units. It's actually just one or two or three timeshare units in the entire complex. But I am like, Okay, they were adamant about using their lender in the mainland. I'm like, Look, catastrophic problems happen almost every single time. You really want to use a local lender, understands the industry, understands problem, like no, no, they're great and they've really gotten everything through him like Maui's different. Maui's different. So they were very insistent. I said, "Okay, let me talk to your banker, you know, your lender. And then when I talked to him like look you need to tell and spell out these issues, these potential problems to the underwriter. Have you caught, you know, contact her in the [road]? She's like, Absolutely, I'll contact my underwriter. Made sure she was aware that there was a couple of units in there that the specific one that they're buying is not a timeshare but that there are timeshare in there and that there's a front desk and she's like, Okay, I'll do that. And then a couple days later I'm like, Okay, did you talk to her? And she's like, Oh, yeah, it was fine. There's no problem with it. I'm like, Okay. And we got two weeks before close and she's like, Oh, we sent it in underwriting and the underwriters said we couldn't because there's a condo hotel. You know, there's a front desk there and, you know, even worse there's timeshare. I'm like, I said that. That's exactly what I said. So you know, that's one example. I had another person. They ended up buying seven, you know, him in a partnership with his wife and then a business partner and they had been purchasing properties here on Maui during the low side of the market. And all condos, you know, kind of good income generators. And between these seven properties, they literally had ownership in some banks and are like, Oh, no, you know it's really easy. I'm like, I know. I know what you're saying but catastrophic problems arise. And at the end of the day, they were 100% proven wrong because when they went to go get their loan, we ended up hitting delay after delay. So they ended up getting it through. It can get through but not without a lot of hair pulling. So if you want a smooth, painless transaction, use a local lender and Byron's there for you. He's-- he really goes the extra mile. You know, he's given his cellphone out. He has his email address that he answers on the weekend. So if you want somebody that's readily available, you know, at the pace of business, Byron's your guy. Do you have a phone number and an email address [crosstalk]?
Byron Yes. My cellphone number is 808-280-3491 and my email address is B, as in boy, Y-A-P at Apple, Sam, Bravo. That's ASB, Hawaii dot com. byap@asbhawaii.com
Clint Now, last time you were in here, we were talking a little bit about the county's gifting program. Well, actually, it wasn't a gift. It was technically a loan, right? And so how is that-- how many more have you ended up doing since then? Just the one or two more?
Byron Just the one, I think a couple of other loan officers in our bank are doing several of them. The problem has been is the availability of property in the timeline that the county has given. The good thing is the county has in certain instances expanded or helped out in the timeline to try to help out the customer to find a property. But I haven't delved in many of it. And I think a lot of it is because of the inventory that's out there right now. The non-availability of product for people.
Clint That's true, you know, and that is one of the biggest things that we're finding right now. People don't realize that it's pretty scarce property out there. And a lot of people and one of the things that [we] don't realize is the high cost of living is costing Maui to lose a lot of its people. We actually have our population dropping, you know, over year over year. The last 2, 1%. I mean that's a pretty dramatic drop. But with the costs going up, it's making it harder for people to find a place to live. And people are seeing the opportunity. When the prices go up, they're looking to sell. I mean why not, you know. Life is an opportunity. They see that chance. They take the cash. And they're going to go move to the mainland for, you know, five years, eight years and you know, purchase something there, diversify their investment, and then when the time comes, they can always come back to Maui. You know, sometimes, what they're doing is they're selling their home and they're buying a small condo here with the additional capital and then purchasing something in the mainland and you know, continuing on their savings there. So you know, there's always, you know, a bright side to it. The benefit is for Maui people who already own here. You know, they have the opportunity to sell a home at a premium and really be able to live a life of luxury by comparison to the mainland. I mean homes in just about any community other than the major cities or Southern California, you're going to be able to get nearly a mansion for the same price as a home out here. So you know, in the monthly fees are going to be dramatically less. Oftentimes, there's positions available that pays the same amount or greater in the mainland. Now, we have a very low unemployment rate here and there they're starving for qualified workers. So a lot of young people too find themselves-- I'm going to go out there and I'm going to get the work experience in the mainland. I mean a-- you know, set up roots, and then when the time comes, I'm going to come back home. Going to have that work experience, you know, be higher up on the ring and be able to afford to live here. But right now, it's tough. On average, you need about $35 an hour to afford a two bedroom apartment and you know, on the mainland it's 12 to 15 dollars an hour. So you're-- the bang for the buck is a lot better and most people that are purchasing over here are buying for the opportunity to live in the most beautiful place on the planet. And the people who live here, they have an uphill battle. So it's important that they work with an agent who understands where the inventory is and understands the market as a whole because there's so many people that I've worked with and they're like, It's got to be Kihei. I want to be in South Kihei. This is the only opportunity. I've got to live there and I end up showing him something in Kahului or upcountry, you know, for a lesser or equivalent value. They get so much more and the opportunities are even better for them. I mean I had one client that ended up buying a new traditions and which was significantly less at the homes that she was looking for over in Kihei. She absolutely loved it as opposed to having to commute 30 minutes every single day each direction. She was willing to just ride her bike to work. You know, who gets that opportunity to ride a bike to work? I mean I, you know, being a realtor that's not going to happen. I try to get an agent, you know, or a buyer on my back. I'd be a little weird. But you know, having that community that you can understand-- exactly where they're looking for is important and as an agent that sells everywhere on Maui, you know, whether that be the west side, south side, or central Maui, upcountry. You know, I understand the whole market. So-- being that and buyers doing and finding what they're looking for, there's also people with ownership and they see the opportunity to have this increased value their home and they can refinance it and do what they've been talking about, you know, getting their kids into college. So starting on the top with high costs of ownership basically means you have that opportunity to retire more comfortably anywhere else. So that's a big positive. But using your home as a bank is an important, you know, financial instrument. So what are some buyer and some assets or options available for people for refinancing a home and what have you seen from, you know, car payments, solar, or something along those lines like putting their kids in college?
Byron Well, I've seen many different circumstances for different people. One being maybe they-- they've had a couple of car loans that it was too high and combining everything together helped reduce their monthly debt outlay each month. Maybe they've co-sign on their children's loans and the children are out of college and they wanted to help them out get a fresh start. So they've refinanced the property just to have no debt for their children. That's been a couple of scenarios. There's also been like I said earlier was the HELOC where they get a home equity loan and they realize it's lower in the beginning and then there may be four or five years into it. And it's maybe at 5 or 6 percent. And they've combined the two mortgages together at 4% and had a monthly savings. So it's been there a varying scenarios and I think one of the important things is sitting down with the local bank, deciding, Okay, does this make sense or not? Some loans may make sense. Some loans may not make sense. And you can also adjust your mortgages meaning, if you had say your loan for 10 years and it was a 30-year loan, you have 20 years left. You can probably-- you might be able to refinance it into a 20-year loan and still have a savings and not add years to the mortgage or even go down to a 15-year.
Clint And that can always vary, you know, depending on what rate you're repaying, you know.
Byron Yes.
Clint If you were smart, if you were intelligent, you know, you should definitely talk to a lender and have them notify you. Be on their email list. So when that rate drops like it did just last week, you know, that you get that notification and you have the opportunity to save money or a little bit of extra capital for an investment or a vehicle or you know, something that you've been wanting to do for your family like a trip. So it's important that you see those, seek, and take those opportunities as they come. That being said, when it comes to opportunities like photovoltaic as we talked earlier with Daryl, if you're going to be going in and installing photovoltaic on your home, it is one of the best investments that you can be making. It's not just the investment that you're adding capital and value into the home. And it is not a dollar for dollar. You get about 70 cents to 75 cents for every dollar that you put in but that 25 cents is made up real quick with the fact that you're not paying the most exorbitant costs of electricity anywhere in the US. They literally are trucking in a vehicle with diesel fuel or actually jet fuel. What is it, diesel fuel?
Daryl I think it's diesel.
Byron Every single day. I mean when I was at-- in seventh grade I think it was, sixth grade. I did a field trip- the same exact powerplant, the same technology from when I was a child, it's the ones that they're using today. And it blows my mind that we have these amazing tools and resources out there. And we're on an island with limited resources and we're like, Oh, let's just truck in some diesel fuel from, you know, miles in the ground that's been through processing. In the mainland, it gets on a boat and comes over here. It's definitely a chink in the armor so--.
Daryl We'd been getting better. We'd [crosstalk] been adding a lot of wind, lot of solar. And I forget Maui county's goal was it 2030 or 2040 I forget to be 100% renewable. And it's a definitely doable goal and I don't think it'll be-- I don't think we'll have difficulty getting there because the price of solar is still dropping and the technology is improving and the price of batteries and that technology is also improving.
Clint I think [they've been] pretty conservative about those goals. Most people we're not most places-- not most people but most places that I've read about have blown those goals out of the water. They're already had a lot of people have accomplished them and I know here in Maui we were ahead of those goals as well.
Daryl I think we'll meet the goals earlier.
Clint Yeah.
Daryl [And that] we said.
Clint I mean we all want to see, you know, a 100% renewable. That'd be fantastic. It's, you know, a wonderful opportunity and a lot of people are concerned, you know, they're like, Oh, the jobs. You know, the funny thing is grid maintenance is a job. That's actually where most of the cost is. Two-thirds of the electricity costs that you can is the grid maintenance. It's, you know, maintaining those poles and those linemen work so hard to keep the lights on.
Daryl Yeah, well I mean by installing more homes with solar and batteries, we're essentially decentralizing the grid. And the more we do that, the more stable it will be. And eventually, they will probably be software to basically allow people's homes to support the grid not just take from it. So in the event of a grid outage and instead of spinning up some diesel generators, we can take solar from other homes during the day including the battery at night-- to power other parts of neighborhoods that are-- have an outage.
Clint And I've actually heard I don't know--.
Daryl We're doing this in Australia right now.
Clint Oh, no kidding. For some of the more rural communities?
Daryl Yeah, so Tesla came up with software where these-- they got a-- I think several million dollar grant and they did a test pilot program in these neighborhoods where they installed homes with solar and powerwalls and instead of doing peaker plants, the homes are providing power when there is a demand.
Clint Well, even peaker plants though were considered controversial at the time which kind of blows my mind. It is just a giant battery in the middle of nowhere.
Daryl Yeah, but the problem of the peaker plant is it takes a long time to spin up and get going. And in the meantime, you've had a few seconds of a brownout which is really bad for people's equipment.
Clint Oh, my mistake. I'm actually referring to-- it was a conversation between one of the ministers in Australia and they were working towards getting a grid stabilization because the cost of electricity is just astronomical there. Because they've been, you know, reducing their coal production and they haven't been maintaining their plants because, you know, fossil fuels are dying out. And then a lot of the people are upset about it. And I think that Elon texted something or somebody text with something.
Daryl He tweeted.
Clint Yeah. He tweeted and one of the people response is like, Well, can you actually come up. He's like, yeah, of course. So they're literally were developed a large battery, you know, in one of these regions and stabilized a lot of their power demands over--.
Daryl Saving them millions and millions of dollars every month.
Clint Dropped it like--.
Daryl And just in fuel costs.
Clint Yeah yeah. And it was-- I think also it dropped their rate dramatically because they have that on-demand power. You know, if there instead of like you said spooling up a system. Now, we're able to just simply add more [dues] to it.
Daryl And Kauai has done this well. Kauai added a huge Tesla power-packed system and was able to reduce their usage down to very little compared to what it was.
Clint Yeah, [that's] impressive.
Daryl So it's pretty incredible.
Clint I don't care about Kauai. I want Maui [laughter]. No, I love Kauai. It's a [crosstalk]--.
Daryl Well, it's closer so it's easier for people to imagine. It's right here. It's right in our backyard.
Clint And I think it's not even-- I really feel that the costs associated with maintaining those generators and having people in there, it's so simple just to simply install photovoltaic and put in a battery system and it's-- we're more prepared for disaster. Right now, if our harbor goes down, what are we going to do if we can't get fuel to that? It's a big issue.
Daryl Well, that big island quake that happened in 2006 that knocked out the power on South Maui for three days. That is the event that got me into solar. And we have-- we started doing grid-tied battery backup systems first and eventually delved into everything else.
Clint We could go and talk for hours about photovoltaic. But we're just about end of time for our show. I'm Clint Hansen with Maui Luxury Real Estate. This is my brother, Daryl Hansen with Pacific Energy.
Daryl Thanks for having me, Clint.
Clint My pleasure. And Byron Yap with American Savings Bank. Thank you for coming in.
Byron Thank you.
Clint So our website, if you want to listen to a transcript or seen any of this is mauirealestateradio.com or mauirealestate.net where you can link onto it. What's your website?
Byron W-w-w dot, it was the A-S-B Hawaii dot com. www.asbhawaii.com
Clint But your e-mail's usually the easiest.
Byron Emails easiest, yes. [music] But if you want to learn more about our bank or anything like that. You can check there.
Clint And your website?
Daryl Maui-solar.com. That's for Pacific Energy.
Clint Thank you, everybody. Have a wonderful day. Aloha.
List of Shows to Date:
Show 1: Mortgage vs. Rent
Show 2: Buying on Maui. Deciding where to purchase.
Show 3: Leasehold, affordable ownership and Na Hale O Maui
Show 4: Inspections with Beau Petrone
Show 5: 1031 Exchange
Show 6: Hospital
Show 7: Insurance with State Farm agent Kit Okazaki
Show 8: Understanding the escrow process with Pam Teal of Fidelity National Title
Show 9: Everything you need to know about solar on Maui as of 06/17/2019
Show 10: The Hansen's a family tradition in Real Estate
Show 11: Paul Brewbaker discussion on Maui
Show 12: Keli with Creative Financial
Show 13: Pets and Pests
Show 14: Clint Hansen with Kim Komando
Show 15: Clint Hansen with Bob Hansen and Donna Hansen
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