Residential Solar Power

Edited by Phil Coupe of ReVision Energy and Mark Lambert of Unitil

In Brief:

  • The popularity of residential solar installations has been rising in New Hampshire, fueled by reduced equipment costs, state and federal incentives, and additional financing options.
  • New Hampshire’s solar rebate program partially reimburses the costs of residential solar installations. However, lower funds and increased demand have reduced reimbursement rates.
  • Net energy metering allows a customer with an on-site solar installation to export electricity to the electric grid, offsetting future electricity purchases from the utility. 
  • Pro: Residential solar is a clean, renewable energy source that benefits homeowners and contributes to energy independence and sustainability while lowering costs for all ratepayers.
  • Con: Current net energy metering policies are unfair as those who benefit from them are not paying their fair share for connecting to the electric grid, which shifts additional costs to other utility customers.  This amounts to a subsidy paid to solar customers by other energy users.

 

Issue Facts

There are a variety of solar energy technologies potentially available to residential property owners. The two most common types are:

  • Solar electric panels which are comprised of photovoltaic cells that convert sunlight directly into electricity. These panels may be mounted on properly oriented rooftops or on the ground. The use of trackers, which automatically reposition an array of panels to maximize production throughout the day, can increase output significantly, but also entails greater initial expense.
  • Solar thermal collectors are heat absorbing glass tubes or flat plates used for domestic hot water systems. These do not produce electricity and are generally roof-mounted.

Solar electric systems can be “grid-tied”, which means that the home is still connected to the grid after the installation, or they can be “off-grid”, where the home is not connected to the grid.

Off-grid systems use batteries to store solar electricity produced during the day for use at night. Grid-tied systems enable homeowner to produce and use their own solar energy when the sun is shining, but rely on grid power at night when the solar array is dormant. 

This potential to join the grid makes photovoltaic cells a particularly sensitive policy issue, especially in the debate over net metering. 99% of all solar electric systems installed today are grid-tied.

The remainder of this article will focus on grid-connected photovoltaic solar arrays.

Residential solar in NH

The popularity of residential solar installations in NH has been growing rapidly.

  • In 2016, the NH Public Utilities Commission (NHPUC) received 1,127 applications for residential solar rebates, up from 821 in 2015. 
  • In 2015, 16.6 MW of annual solar electric capacity was installed in NH, bringing the state’s total to 31.1 MW. Actual solar capacity varies based on weather and other conditions, but roughly estimating, these panels could power around 5,000 homes.
  • There are currently over 70 solar companies operating in New Hampshire.

Falling costs for solar panels, increased options for financing or leasing, and the availability of federal and state rebates and other incentives continues to fuel growth.

State and federal rebates

To encourage residential solar installations, both the federal and New Hampshire state government have created incentive systems that reimburse property owners for part of the cost of a solar system.

  • State level: The Residential Small Renewable Energy rebate program was started in 2009, and reimburses property owners $0.50 per watt (up to $2,500) for the cost of a solar array. Rebates come from the state’s renewable energy fund, which is funded by fees utilities pay to the state when they cannot meet New Hampshire renewable energy mandates. Reimbursement rates have dropped over the years as contributions to the fund fall while demand for rebates rises.
  • Nationally: The Federal Residential Renewable Energy Tax Credit reimburses property owners for up to a portion of qualified expenditures on a solar system. The rebate is made in the form of a tax credit. The credit level is currently 30% of qualified expenses, and this is set to gradually decline after 2019, expiring at the end of 2021.

Solar power and NH’s clean energy mandate

New Hampshire’s renewable portfolio statue, RSA 362:F, mandates that the state source 24.8% of its energy from renewable resources by 2025. The law requires utility companies to pay fees if they are unable to meet the mandates either by generating clean energy or buying renewable energy certificates.

Residential solar producers may be eligible to earn renewable energy certificates (RECs), which they can then opt to sell to utilities or other buyers. To qualify, the solar array owner must apply to the NH PUC for certification. Their energy production must be documented by an approved third party, who install an on-site monitor to record the electricity generated and make reports to ISO-NE, the independent regional transmission organization serving the six New England states. A fee is generally charged for this service. RECs are sold in 1MW hour units and prices vary depending on market conditions.

Net energy metering

Perhaps the most controversial aspect of solar policy in NH is net energy metering, where excess energy produced by a solar array is exported to the electric grid, with the customer receiving a credit towards future energy purchases from the utility.  Solar arrays with a peak capacity of 1000 kW or less are eligible to participate.

After the utility determines that the solar system is safe to be interconnected to the distribution grid, the net energy metered customer is charged only for the difference between energy produced and energy consumed.  This situation may result in a zero electric bill for the solar customer, or even a payment or credit from their utility if the energy production is greater than their on-site energy consumption.   

Customers are credited for the value of the energy they sell back to the grid at a rate of 100% of the rates for energy service and transmission and 25% of distribution charges. However, those rates could change when the PUC finishes a review process currently under way.

Net metering capacity used to be capped, but that limit was eliminated in 2017. 

Local tax exemptions

New Hampshire state law allows cities and towns to offer residential property tax exemptions for the value of solar energy installations. In municipalities where this is offered, the exemption means that property owners will not see their property taxes go up because of the added value of a renewable energy installation.

As of June 2017, 123 NH towns offer tax exemptions for solar installations. A list may be found here.  

Current policy debates

  • Some have expressed concern that a full review of policies and regulations relating to net energy metering is needed to ensure that all customers are paying fairly for the services they receive from the electrical grid.  
  • Some have called for a reassessment of state rebates, subsidies and incentives for solar projects, which they argue are often, in essence, paid for by non-net energy metered customers.
  • As the popularity of solar and other residential renewable energy installations continues to grow, concerns have been raised over rebate availability and the adequacy of the renewable energy fund incentives. 
  • Individual towns continue to debate adding or removing property tax exemptions for solar installations, with opponents arguing such policies place an unfair tax burden on non-solar owning residents, while supporters counter that such exemptions are designed to be tax-neutral to the town or city.

Related Issues

Wind Power Restrictions

Northern Pass

Regional Greenhouse Gas Initiative

Renewable Portfolio Standard

PROS & CONS

"For" Position

By Phil Coupe of ReVision Energy

"NH should pursue policies that promote residential solar."

  • Supporting solar power through maintaining rebates and incentives increases our energy security by reducing our reliance on foreign fuel sources.
  • Solar power is a renewable resource which reduces carbon emissions when compared with reliance on fossil fuels, so encouraging its use helps protect the environment and has benefits for public health.
  • With the appropriate policies in place, residential solar installations may provide homeowners with significant long-term savings.
  • Use of solar power can help stabilize energy prices as solar installations are not subject to rising fuel costs. Data shows that large centralized power plants are inherently less efficient than local generation due to line losses as power is transmitted over long distances.
  • Many studies have shown that fossil fuels both historically and presently receive much more government subsidies than solar energy.
  • Use of solar power reduces utility costs during periods of peak demand, when electricity is very expensive, and therefore benefits all ratepayers, not just those who own solar.
  • A recent study comparing solar with other forms of grid electricity found that solar is worth roughly 20 to 30 cents per kwh, but is only credited at around 15 cents per kwh. This means that solar producers are, in fact, contributing value into the grid.

"Against" Position

By Mark Lambert of Unitil

"NH should closely regulate residential solar."

  • Residential solar installations are only cost effective because they are heavily subsidized. This increases prices for everyone else, distorts the market, and inhibits exploration of better alternative energy sources. 
  • New Hampshire’s current net energy metering policy is unfair as solar generating consumers do not pay for the services they are receiving from the electric grid such as backup, balancing, and storage facilities.  Those costs are shifted to the vast majority of  customers who are not generating electricity to subsidize the costs of net energy metered solar customers.
  • Mandating the use of certain energy technologies, such as solar, could drive up electricity prices overall and disrupts the competitive process that invites innovation.   
  • Because solar production only works when the sun is shining, additional power plants will be needed as backup or redundant generation sources to produce when solar is unavailable.   Studies show that increased costs for all customers are the end result because of the significant investments that are required for utilities to make to the grid to accommodate rooftop solar supply on the system.
  • Solar financing, leasing, and purchase power agreements, which can extend over twenty years, may include liens on homes and other complicated terms and conditions. This leads to confusion and a need for consumer protections.
  • Customers with their own small-scale generation sources, such as a solar array, aren’t actually ‘free from the grid’ even if they produce the exact amount of energy they use at  any given time. They benefit from being connected to a utility’s distribution system and should pay their fair share of its costs.

LEGISLATIVE HISTORY

Killed in the House

Establishes a commission to study municipal regulation and incentives for solar energy.

In Committee

Eliminates the cap on net metering.

Tabled in the House

Raises the total peak generating capacity for group net metering when the generator is a city or town.

Law Without Signature

Makes various changes to the Renewable Portfolio Energy Standard and associated Renewable Energy Fund, particularly related to low-moderate income community solar projects. For example, the bill requires at least 15% of funds from the Renewable Energy Fund benefit low-moderate income residential customers. This bill also increases the share of solar and biomass energy required in the Renewable Portfolio Standard.

Signed by Governor

Requires the Public Utilities Commission to review net metering agreements between group hosts and group members.

Signed by Governor

Increases the cap on net metering, and requires the Public Utilities to Commission to develop a modified net metering system.

Killed in the House

Doubles the cap on net metering.

Killed in the House

Under the net metering law, allows a "group host" to bill members individually; also allows cities and towns to offer property tax exemption for persons who install renewable energy projects on brownfields, landfills, parking lots, resident owned communities, and roofs of commercial establishments.

Killed in the House

Requires the Public Utilities Commission to make a one-time incentive payment to a church that owns a qualifying small renewable energy generation facility.

Killed in the House

Increases the cap on net metering, and requires the Public Utilities to Commission to develop a modified net metering system.

Killed in the House

This bill:
I. Provides credits for group hosts for surplus electric generation.
II. Modifies the formula for determining when tariffs providing for net energy metering are available to customer-generators.

Killed in the House

Deletes renewable energy "classes" from the Renewable Portfolio Standard, instead grouping all renewable energy sources together. This would give utilities more choice in terms of which renewable energy sources they buy electricity from, which in turn would likely increasing the amount of electricity in New Hampshire coming from hydropower, and potentially decrease the amount of electricity utilities buy from other renewable sources.

Killed in the House

Classifies all hydroelectric power as renewable energy for the purpose of New Hampshire's Renewable Portfolio Standard. Current law does not classify large hydroelectric power plants as a renewable energy source, although hydropower is renewable from a scientific perspective. The current legal classification is partly because hydropower does not need the subsidy to succeed, and partly because large hydropower plants can disrupt the environment.

Signed by Governor

Establishes a committee to study facilitating private investment in energy efficiency and renewable energy.

Tabled in the House

Repeals the electric Renewable Portfolio Standard, which requires utilities to purchase certain amounts of electricity from renewable sources.

Killed in the Senate

Suspends all renewable energy rebate and grant programs, instead sending those funds to a low-income weatherization program. According to the Public Utilities Commission, "by redirecting renewable energy funds away from renewable energy projects to non-renewable projects, electricity costs will increase by an indeterminable amount for ratepayers, including state, county and local governments."

Should NH encourage more residential solar installations?

Comments

BrianDunn's picture
Brian Dunn
- Henniker

Tue, 05/03/2016 - 2:49pm

I don't mean to be redundant but I wrote this for the LFDA Forums page here, before I saw this article but the topic address this issue:

San Fransisco, CA passes first of its kind law. Mandates solar panels on all new construction residential and commercial alike. Read more here: http://www.npr.org/sections/thetwo-way/2016/04/20/474969107/san-francisc...

I am as conservative as it gets but in a personal anecdote about this issue I have to say I agree with what the state of California and San Fransisco are attempting to do here. A few years back I represented a land owner in the pursuit of opening a wind farm. Believe it or not, when presented with a vote on whether to allow a wind farm or deny it, the towns people overwhelmingly voted it down and this is not an isolated incident. Citizens think wind farms are too much of an eye sore, make too much noise and conspiracy people claim adverse health effects living next to them et cetera.

But you must understand, the problem with renewable energy/green energy programs advancing in America is that the industry is not being held back by corrupts politicians, big oil or big business, but by the citizens themselves.

It costs more money to install solar panels your roof so people don't bother to do so. Wind farms are an eye soar and are too noisy so communities don't want to see them built. Electric cars drive too slow so the vast majority of Americans continue to buy gas powered vehicles. So on and so forth. I remember watching a late night show the other week, the comedian jokes "soon the price of a gallon of water will cost more than a gallon of gas" and the crowd erupted in cheer and applause. I joked to myself, people sure do love their fossil fuels!

The truth of that matter, whether we like it or not, is that if we are ever going to progress this nation forward and end our dependency on foreign nations and fossil fuels, then the government is going to have to step forward and pass more measures just like California has done. The only way Americans are going to accept renewable energy is if it is mandated upon them. As the free market continues to show us, society in general chooses not to invest in alternative forms energies. So yes I do think society in general and our state/local governments need to be proactive in this matter.

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Issue Status

The NH PUC released new rules that eliminate the cap on net metering and set new reimbursement rates for solar energy sold back to the grid. The PUC will now undertake a longer-term review process of solar reimbursement rates. 

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