The years-long debate over whether and how to value clean energy, and the technology needed to generate it, wore on in the halls of New Hampshire’s Legislature this session.
But while a handful of bills sought to clarify New Hampshire’s stance on net metering, the future of the program remains unclear as the legislative session winds down. Experts said that continued uncertainty will challenge New Hampshire’s ability to attract investment in clean, diversified energy for the state going forward.
Net metering is a framework that allows the host of an on-site power generator — like a solar array — to be compensated for surplus energy they generate and feed onto the grid.
There is a spectrum of approaches to net metering, with different compensation rates, sunset dates, and eligibility terms across and within states.
Group net metering is New Hampshire’s framework that allows multiple entities to share the output of a single solar array. For larger arrays, from 1 to 5 megawatts, the ability to participate in these programs is limited to municipal entities: generally, “towns, wastewater treatment plants, town halls, and schools,” according to Sam Evans-Brown, executive director of Clean Energy New Hampshire.
One bill that emerged from the “committee of conference” process, with bipartisan endorsement, sought to address uncertainty about the program’s future viability in New Hampshire.
Senate Bill 538, from prime sponsor Sen. David Watters, D-Dover, seeks to extend the term for which municipal group projects can participate in net metering.
This could provide a boost of certainty for developers who planned a project and are waiting for clearance to move forward, proponents said. Without this change, net metering for these projects is set to expire in 2040 — a term that would be too short for many developers and their financiers to be assured the project would be financially worthwhile, said Evans-Brown.
But he added that the bill applies only to projects already in the interconnection queue, meaning they have already applied to their local utility for clearance to link into the grid at the time the bill goes into effect.
Therefore, while the bill may provide a boost in certainty for the folks and companies backing those projects, potentially increasing the likelihood they are brought to fruition, it does not address the overarching uncertainty around future group net metering projects.
“Senate Bill 538, really, is just about trying to preserve that diminished pipeline of solar projects that we are hoping could get done,” said Evans-Brown.
The uncertainty around future projects, which are not currently eligible for net metering past 2040, can give developers pause. This is due to state-level policies, such as the slated sunset of net metering, as well as changing federal policies and reduced funding for renewable energy, Evans-Brown said.
This is evident in the number of projects in the interconnection queue maintained by Eversource, New Hampshire’s largest electric utility, which has dropped off in recent years, according to data shared by Evans-Brown. That queue, he said, can serve as a barometer of solar developers’ activity in the state.
At a May 4 open house at a nearly complete, 5 megawatt solar array in Warner, N.H., developer Chad Farrell, president and founder of Encore Renewable Energy, echoed the idea that the uncertainty surrounding New Hampshire’s net metering policy future was a barrier to companies like his own.
A typical 5 megawatt project requires about $10 million in capital investment, though that number varies widely, Farrell said that day. To secure financing, developers rely on a fixed-price contract: In the case of the array on Warner’s Poverty Plains Road, that takes the form of a 20-year contract with the Community Power Coalition of New Hampshire, which has agreed to buy power from the array for that term.
“We do need that for financing. There’s no way we can finance a project that’s got a floating rate unless we establish some form of a floor,” Farrell said.
The uncertain future of net metering past 2040, therefore, leaves the Community Power Coalition of New Hampshire facing some risk, Director of Projects and Programs Mark Bolinger said.
New Hampshire’s group net metering program was “really the only way, or the best way, to make this project pencil out,” he said.
The program allowed the coalition to capture the economies of scale in contracting the project, and they expect to spread the returns they get from generating that solar energy — a projected $1.5 million over the next 15 years, according to Bolinger — across the 11 member communities that signed up to participate in the project. The customers of the Poverty Plains array, as required by state law for a project of that size, are all municipal or county entities.
That rate of return is an estimate based on current and projected net metering schedules, Bolinger said. Beyond that, the last five years in the contract are where the uncertainty lies.
The coalition envisions other possible models for getting value from the Poverty Plains array to its member communities, Bolinger said, that they could adopt in addition to — or instead of — net metering in the future. But it is the coalition’s understanding that, if SB 538 is signed, the array will be eligible to participate in net metering for the full 20-year term of the contract, Director of Regulatory and Legislative Affairs Deana Dennis said in an email Monday.
“There’s definitely some risk on our end. This is the kind of project we want to support, though,” Bolinger said. “… A lot can happen in 15 years, and it’s hard to know what the landscape will look like at that time.”
Another bill that sought to expand access to New Hampshire’s net metering program was Senate Bill 449, which the New Hampshire House of Representatives voted “inexpedient to legislate” in April.
The bill would have extended eligibility for net metering off of large arrays — between 1 and 5 megawatts — to commercial and industrial customers.
“Our members are highly motivated to explore opportunities to self-generate power or participate in local renewable energy projects to better manage costs and ensure long-term stability,” wrote Jessyca Keeler, president of Ski New Hampshire, an industry group representing more than 30 ski areas.
Keeler wrote that the bill would have provided the framework to make solar investments feasible. Without it, she said, businesses could not justify the investment.
The bill was voted down, however. Critics of net metering say that the practice shifts the true cost of the arrays from developers onto other utility ratepayers. Evans-Brown said there is not sufficient evidence of that phenomenon in New Hampshire, where net metering credits are lower than in many other states that may see a more pronounced cost-shifting effect.
In addition to complicating the path toward more solar rollout and investment in New Hampshire, a murky path ahead on net metering policy limits the ability of community solar to accomplish what proponents argue it ideally would: democratizing access to clean, renewable energy, he said.
“What we lose is that folks that don’t have the ability to do rooftop solar cannot access the clean energy transition,” said Evans-Brown.
Additionally, incentivizing those who can afford to invest in solar technology and batteries to do so in connection with our shared grid — rather than in isolation — would help ensure that private investment in solar technology also contributes to grid resilience, he said.
Rob Werner, president of the League of Conservation Voters, was disappointed that the Legislature had not found a path to extend net metering for large arrays to commercial and industrial customers. But he said he took the emergence of SB 538 from its committee of conference as a hopeful sign, pending Gov. Kelly Ayotte‘s signature.
“This is really important, in terms of contracting and certainty,” he said. “… It’s good for the solar industry, for our state, for jobs, for contracting, and so forth. If you support renewable energy, you should support this bill.”