New Hampshire Homeowners with grid-tied solar arrays, like this one recently installed by ReVision Energy, will be eligible for 20+ years of grandfathered retail net metering if they get their application in by Sept 1, 2017.
New Hampshire’s Public Utilities Commission (NHPUC) has issued a long-awaited ruling on solar net energy metering (NEM). The rule is a compromise which resolves uncertainty around New Hampshire’s solar energy policy, and reinforces the basic argument of solar advocates – that solar generates value for the grid well above wholesale rates – as well as calling for important pilot projects which will help regulators design future solar policy so that the market sends accurate price signals to ensure that distributed energy resources, such as solar PV, continue to be deployed in a way that saves everyone money and also reduces pollution.
What’s Net Metering?
Grid-tied solar energy systems have a relationship with the grid (hence the name). Whenever the sun is out, the systems generate as much clean solar energy as their technology can harvest. Any solar energy that can be used in real-time automatically goes to feed power needs in a home or business – lights, computers, washing machines, etc. For most solar PV projects, there will be times when the system is harvesting more clean energy than can be used in real-time. When this occurs, the excess power is exported to the electricity grid, where it feeds electric loads elsewhere in the neighborhood.
For most of solar’s history, solar customers received a 1:1 credit for electricity, meaning, 1 exported kilowatt-hour of solar was worth 1 imported kilowatt-hour of grid power later. This is called net metering.
No Such Thing as a Cost Shift
Net metering works well. It is a simplified way to look at how the grid works, but it makes sense to customers and has been a building block of the modern solar energy industry. However, the laws which govern net metering in New Hampshire established caps (% points of how much of the grid load could be comprised of net metered solar energy projects) and those caps were hit back in 2016. That set in place the current events.
The State Legislature recognized the important role of distributed renewable energy in New Hampshire’s energy future, didn’t want to slow a popular product (solar panels) and a growing industry, but political reality forced only a modest increase in the net metering cap, followed by the legislature asking the PUC to examine the costs and benefits of solar to the grid in order to establish a better long-term vision for solar compensation in New Hampshire. In a rigorous process over the course of nearly a year, the NHPUC weighed arguments by utilities, solar advocacy groups, consumer advocates, environmental groups, and other stakeholders, as well as bringing in their own experts.
Importantly, the NHPUC firmly rejected draconian cuts to NEM proposed by the utility companies in its order
. It found there was no evidence that solar exported to the grid resulted in cost-shifting to other ratepayers, as the utilities had alleged, and instead propagated some relatively modest changes to the way solar system owners are compensated for their exported energy in the near term while setting up a process to collect additional data to support a longer term move towards rate a design and solar compensation scheme which sends more granular and actionable price signals to customers of all kinds.
Net Metering Cap Lifted, Modest Decrease to Exported Energy Value
The rule uses elements from two different settlement proposals to chart a course for distributed energy compensation in New Hampshire in the coming months and years. Here are some highlights for those who already have solar PV installations in NH, or hope to soon:
- Net Metering Applications Approved Prior to Sept 1, 2017 – Retail Net Metering – Any customer who gets a net metering contract for their PV installation set up prior to Sept 1, 2017 will be able to take advantage of today’s net metering arrangement, which is full 1:1 retail rate of electricity per each kilowatt-hour exported to the grid, for a grandfathered period that lasts until 2040. Contact us to set up a site visit if you want to get started prior to the new rates taking effect.
- Net Metering Applications Approved After Sept 1, 2017 – New Rates Take Effect – After Sept 1, new net metered projects of under 100kw (all residential and much of our commercial work) will be credited 100% of energy supply and transmission charges, but only 25% of distribution charges (down from 100% now). Large-scale systems over 100kw will see no change in the current (lower) net-metering rate.All systems regardless of size will receive their net metering credits in dollars rather than kilowatt-hour value, which makes the accounting easier for utilities and provides additional flexibility to support time or locationally differentiated rates in the future. It also means that excess net metering credits can be ‘cashed in’ when the credit value exceeds $100 or when a homeowner moves.
The net result of the change for residential and small business solar customers is a reduction of the value of the solar generation ranging from 2%-20% depending on your utility, your solar system design and your electrical usage profile. Our ReVision Energy Solar Design Specialists would be happy to review your particular situation with you, though clearly it makes sense for anyone considering a solar installation to try to get a net metering application filed before Sept 1 to get grandfathered under the existing rules.
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Is NH PUC’s Net Metering Decision a Win or a Loss for Solar?
Shall we call it a draw?
On the good – we are pleased to see a policy that creates a stable policy environment in New Hampshire, and that acknowledges the reality that solar – and other distributed energy resources like wind and hydro – offer unique value to the energy grid. Further, the rule is in line with our view that policy that governs a modern grid should be designed with appropriate price signals to take advantage of those values, resulting in lower pollution and energy savings for all. Also, the abolition of a net metering cap means that we can continue to make long-term planning decisions to serve the needs of NH solar customers for years to come.
On the not-so-good – Solar customers will receive a slight reduction in compensation for exported kilowatt-hours used outside of the month in which they were created. Value of Solar studies (more on them in a moment) in many states have found that solar exported to the grid is in fact worth MORE than the retail rate of electricity. So even though the cut is modest, it is still probably unfair. In our view, a transition to a 100% clean energy-powered society is necessary and urgent, and energy policy should be accelerating rather than pausing that transition whenever possible.
Other Things The NHPUC Rule Does
These new rates are actually just interim rates expected to be offered for ‘the next several years’, as the next thing the NHPUC will do is conduct its own “Value of Solar” study, like that done in Maine and other states, to assess the true value of net metered solar energy to the broader grid, including climate and other environmental benefits as well economic ones.
Meanwhile, the PUC has also called for a set of pilot projects that will investigate how innovate programs or modern rate design can help incentivize customers to make private investments in distributed clean energy resources to lower ratepayer costs and further benefit the state. The proposed pilot projects include a ‘Time of Use’ pilot by each Eversource and Unitil, a low/moderate income solar pilot by each utility, a municipal aggregation pilot with Liberty utilities and the city of Lebanon, and finally a ‘non-wires alternative’ (NWA) pilot in each utility territory.
The NWA pilot may be similar to Maine’s Boothbay Pilot Project which demonstrated overwhelmingly that a combination of efficiency, lighting upgrades, battery storage, solar, and other technologies could meet a grid reliability need at a dramatically lower cost than a traditional grid build-out approach.
Interested in solar? The right thing to do is get in touch and get the process going. We’ll do our best to accommodate customers who want to get their net metering contracts in prior to Sept 1, but even after that date, solar ROI will be great in New Hampshire and we look forward to decades more of supporting a 100% clean energy transition in the Granite State.
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