New Hampshire Solar Energy Efforts Face Uncertain Future
They’ve been popping up across New Hampshire in recent years — clusters of photovoltaic systems that each provide power to multiple homes and businesses.
In the Upper Valley, the nonprofit organization Vital Communities has spurred solar installations in hundreds of households. In the Monadnock Region, Peterborough has a 944-kilowatt array that town officials expect will come online this month to power the town’s water treatment plant and other municipal buildings in the community. Last month, a 66-kilowatt system behind the Airport Business Park in North Swanzey began generating 92 percent of the power used by three buildings there. The Hinsdale Planning Board has signed off on two solar arrays — including a roughly 1-megawatt installation the town and school governments may sign on to use.
But while solar power is booming because of economic incentives and people wanting to get away from using fossil fuels, its long-term future comes with uncertainty, industry representatives say, especially if those incentives go away. So what has made harnessing the sun’s power such a popular investment in the Granite State?
While it could be people becoming more conscious of where their electricity comes from, the answer is a little more complicated than that, New Hampshire solar project developers say.
To start, they say, going solar has become more affordable for people, companies and municipalities as the technology improves and demand increases.
State and federal financial incentives have also helped, they say, but it’s the passage of a state law in 2013 allowing group net metering that has really made solar power more cost-effective and accessible.
The law allows renewable energy facilities to share surplus electricity they produce with other people, and get paid for it. The catch is the people using the electricity have to be customers of the same utility company as the facility’s owner.
“It’s definitely had an effect on the industry here,” Andrew Kellar, founder of Stratham-based NhSolarGarden.com, said. “There were so many potential clients in the past, but they just didn’t have the land or roof for an installation.”
With group net metering, people can sign up to have their electricity come from someone else’s solar array as long as there is enough power to go around, he said.
It’s also made solar power a viable option for cities and towns that would otherwise not have the infrastructure or resources to install a photovoltaic array directly linked to a municipal facility, he said.
Kellar’s company is developing the two Hinsdale projects dubbed community solar gardens.
Craig J. Bell, general manager of Solar Source in Keene, said that before group net metering, a photovoltaic system had to be behind a single electrical meter.
As a result, electricity being produced by a solar array on the roof of a barn couldn’t be applied to a farmhouse on the same property as long as both buildings were attached to separate electrical meters, he said.
He said while group net metering has played a role in boosting business, there are other programs out there that companies and homeowners are also taking advantage of to harness the sun.
They include state rebates for commercial or industrial photovoltaic systems, as well as tax credits from the federal government. Another federal program is accelerated depreciation, which causes the value the system is taxed on to decrease more quickly.
“For business purposes, it is a good investment,” Bell said. “With the current tax credits and accelerated depreciation, businesses who invest in these systems could see a return on their investment in four or five years, which is pretty good,” he said.
Solar Source has been involved in projects that include the installation of the system at Swanzey’s Airport Business Park.
However, the 30 percent federal tax credit is scheduled to disappear at the end of 2016, and that has created some uncertainty in the solar industry just as it’s booming, Bell and Kellar said.
Also contributing to the doubt are electric utilities approaching their state-mandated caps for how much group net metering solar they can have on their systems, they said.
The caps are based on a proportion of an electric utility’s customer base, said Seth Wheeler, spokesman for the N.H. Electric Cooperative, which is based in Plymouth.
The co-op, which also provided a rebate to encourage solar power development among its members, hit its state-mandated cap of 3.16 megawatts in April, he said.
At that time, co-op officials decided to continue to allow members to install photovoltaic systems, he said.
But instead of paying members for the full value of the electricity they export from their solar array, he said, co-op officials dropped the compensation by about three cents per kilowatt hour.
“We feel we’ve hit on a pretty good solution that works both ways,” he said. “It doesn’t take away the financial incentive, but it doesn’t put us in a death spiral.”
Unlike New Hampshire’s other three electric companies, which, for example, have to have the Public Utilities Commission approve their rates, the co-op is a member-owned nonprofit group that regulates itself, Wheeler said.
“Once the cap was hit, we were free to make our own decisions about what to do next,” he said.
He described the rising number of photovoltaic systems as a “double-edge sword” for electric utility companies.
For example, the co-op sells power to its 83,000 members at the same amount that it purchases it, he said. The company’s revenue comes from a number of different sources that are line items on a customer’s bill, including the distribution charge, he said.
“The more power a person uses, the more they pay in distribution,” he said.
For the most part, those distribution charges don’t exist for people connected to a solar array, which results in a loss of revenue for the utility company, he said.
With fewer people available to pay the distribution charge, those who aren’t connected to a photovoltaic system are left to cover those costs, he said.
Eversource has yet to hit its cap of 36.55 megawatts, but it’s closing in fast with about 12 megawatts already operating, Richard C. “Rick” Labrecque, manager of distributed generation, said.
But which projects will be accepted before the remaining 24.55 megawatts available is maxed out isn’t clear by the way the group net metering rules are written, he said.
“Room for 24 megawatts would be plenty, but we also have a massive pile of project applications that have been submitted,” he said. The rules and regulations of the net metering program only say that net metering shall be offered by a utility on a first come, first serve basis. It doesn’t provide any description of what first come, first serve means.”
Robert K. Furlone, co-owner of the Airport Business Park in Swanzey, said he hopes New Hampshire officials will raise the solar power caps on the state’s electric companies.
He and his wife, Christina, had been wanting to install a photovoltaic system for years on the property because “it was the right thing to do.” And the passage of the group net metering law, along with the federal tax credits and accelerated depreciation were major parts of their decision to move forward with the project.
With one solar installation built, Furlone has plans for others to eventually have the entire business park be net zero, he said.
But that will depend on if Eversource, whose distribution system the solar array is connected to, will accept the future projects, he said. Those projects, which are essentially phased additions to the existing solar array, have already been approved by the Swanzey Planning Board.
The issue has gotten the attention of state officials, as the N.H. Public Utilities Commission issued an order Tuesday that it will examine what “first-come, first-serve” means for group net metering solar projects trying to attach to a utility’s distribution system.
The issue of whether to raise the state-mandated caps for group net metering solar power has yet to be acted upon in New Hampshire, but the question continues to be debated here and in other states.
“Wherever there is net metering and solar, there is ongoing debate about the perfect incentive program, and mechanism for the perfect rate structure,” Labrecque said.
