Residential Solar Power

Phil Coupe of ReVision Energy, Mark Lambert of Unitil, and Citizens Count editors.

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 New Hampshire has been growing rapidly.

  • In 2016, the New Hampshire Public Utilities Commission received 1,127 applications for residential solar rebates, up from 821 in 2015. The program temporarily closed to new applications halfway through 2017, since the waitlist already exceeded the following year's budget.
  • In 2017, 47.146 MW of annual solar electric capacity was installed in New Hampshire, bringing the state’s total to 83.446 MW. Actual solar capacity varies based on weather and other conditions, but roughly estimating, these panels could power around 13,500 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 $0.20 per watt (up to $1,000) 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 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 standard law, 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.

Learn more about the renewable portfolio standard

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 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 makes 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 New Hampshire 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 1,000 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 and reimbursement rates are currently under review.  

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 2018, 135 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.

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

In Committee

Establishes a property tax exemption for leased solar energy systems located on residential property.

In Committee

Reduces the capacity factor used by the Public Utilities Commission for estimates of total yearly electricity production of customer-sited sources that are net metered and for which class I or II renewable energy certificates are not issued.

Interim Study

Establishes an exemption under net energy metering for group net metered facilities that are owned or operated by a municipality to offset municipal electricity requirements.

Passed House

Provides that to be eligible for a solar energy property tax exemption, the solar energy system must be used to heat or cool an on-site building in particular, not just any building. The House amended the bill to instead allow municipalities that adopt a property tax exemption for solar or wind energy systems to adopt exemption limits for off grid, net metered, group net metered, and direct retail arrangements.

In Committee

Prohibits condominium and homeowners association rules which require greater than a simple majority vote to install solar panels.

In Committee

Increases the electric generating capacity of customer generators who may participate in net energy metering, generally from 1 megawatt to 5 megawatts. The House amended the bill to include two other 2020 bills supported by Gov. Sununu, HB 1262 and HB 1402.  The amended bill also requires the PUC to monitor the effect of an increase in the size limit for large customer-generators on electricity rates.

In Committee

Expands the payment adjustment to group host net energy metering systems to apply to systems over 25 kilowatts, rather than systems over 15 kilowatts. This bill also allows the payment adjustment to apply to non-residential systems.

In Committee

Prohibits condominiums and homeowners' associations from prohibiting or restricting the installation or operation of a solar photovoltaic energy system.

In Committee

Allows an electric utility customer-generator with a generating capacity of over one megawatt to net meter generation of 125 percent of its average monthly electric demand. According to the bill text, the intention of the bill is to allow commercial and industrial customers to participate in net metering when their own electrical needs exceed the one megawatt limit.

In Committee

Adds a requirement for low-moderate income community solar projects receiving credits through group host net energy metering, adds qualifying storage systems to limited electrical energy production, and allows for the purchase of output of limited producers of electrical energy by the private sector. This bill also exempts street lighting property and equipment used for public, governmental functions or services from property taxation. Lastly, this bill defines how certain payments of electric utility customers in municipal aggregations shall be applied.

Passed House and Senate

At the time of this bill's submission, 80% of net metering tariffs must go to facilities under 100 kilowatts; this bill raises that threshold to 500 kilowatts, and revises other regulations accordingly. The Senate amended the bill to only increase the threshold to 125 kilowatts. The House must approve this amendment.

Signed by Governor

Updates the definitions of solar energy systems and wind-powered energy systems for the purpose of assessing property value. The definitions would specifically include systems both connected to the grid and off-grid. The bill includes a local property tax exemption for electric energy storage systems.

Vetoed by Governor

Under the Renewable Portfolio Standard, electricity producers must obtain a certain percentage of power from renewable sources. This bill repeals the law that requires the Public Utilities Commission to give credit to electricity producers for net metering customers when making that percentage calculation.

Passed Senate

Adds storage systems to the net metering law. The bill makes several other changes to the laws regulating customer-generators and net metering. The Senate amended the bill to instead increase the electric generating capacity of customer generators who may participate in net energy metering, generally from 1 megawatt to 5 megawatts.

Vetoed by Governor

Increases the electric generating capacity of customer generators who may participate in net energy metering, generally from 1 megawatt to 5 megawatts.

Signed by Governor

Modifies the method for calculating net energy metering credits for low-moderate income community solar group host projects, adding an additional incentive payment of 3 cents per kilowatt hour for low-moderate income community solar projects. This bill also requires at least three new low-moderate income community solar projects each year in each utility's service territory. The Senate amended the bill to decrease that number from three to two. The House also amended the bill, limiting the 3 cent incentive payment to the next two years.

Passed House and Senate

Synchronizes the terms under which competitive energy suppliers and municipal and county aggregators provide net metering.

Vetoed by Governor

Increases the percentage of electricity that must come from solar energy under the renewable portfolio standard.

Vetoed by Governor

Increases the electric generating capacity of customer generators who may participate in net energy metering, generally from 1 megawatt to 5 megawatts.

Killed in the House

Permits the owner of property equipped with a solar energy system to either pay the property tax on the assessed value of the property equipped with the solar array system or make a payment in lieu of taxes of a specified amount for that portion equipped with the solar energy system.

Signed by Governor

Removes the requirements that net energy metering group host customers be default service customers of the same electric distribution utility. This bill also repeals the law that holds group hosts responsible for costs necessary to upgrade a utility's information systems.

Signed by Governor

Removes the review by the Public Utilities Commission of net metering group host agreements, and eliminates certain payment adjustments for small residential group host systems.

Vetoed by Governor

Increases the electric generating capacity of customer generators who may participate in net energy metering, generally from 1 megawatt to 5 megawatts.

Killed in the House

Allows residential property owners who install a leased solar electric power system to receive the renewable fund incentive payments (up to $6,000).

Signed by Governor

Permits a town to establish a revolving fund for the purpose of facilitating transactions relative to municipal group net metering.

Killed in the House

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.

Killed in the House

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

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.

Signed by Governor

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

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?

FOR
REPRESENTATIVES

Comments

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 Legislature is debating raising the cap on participating in net metering from one megawatt facilities to five megawatt facilities. Another proposal would base participation in net metering on a customer's average electricity use - they could net meter energy equivalent to 125% of their own average use. Check this page for updates and contact your elected officials to share your thoughts.

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