PUC decision seen as a big boost to NH solar industry
Elimination of net metering cap should spur larger projects
The sun is the limit on the state’s net metering cap come September, thanks to a NH Public Utilities Commission decision issued June 23.
The decision could heat up the state’s residential solar industry this summer, though there might be a drop-off during the fall.
That’s because the 72-page decision will likely prompt some homeowners and small businesses to rush to get their applications for solar installations in by Sept. 1 so they will be grandfathered under current, higher rates until 2040 for any surplus energy they produce.
It also will allow some larger solar projects, held up by the previous 100-megawatt eligibility cap to go forward and encourage other larger projects, especially since the decision has also made group net metering easier.
The solar business in New Hampshire has already been growing, ever since lawmakers doubled the previous 50-megawatt cap that was instituted 18 years ago.
The law doubling the cap also charged the PUC with setting a new net metering rate to address utilities’ concerns about “cost-shifting.” The theory was that residential solar users were getting a free ride by using the grid when needed (when the sun wasn’t shining), even though they weren’t paying for it.
Solar advocates said that “distributed generation” actually helps the grid, since it could provide a local energy boost during the peak summer hours, when energy is needed the most. The problem is nobody really knows how much that helps other customers, but the latest decision sets up some studies and several pilot programs to find out.
But for now, the PUC has found “that there is little to no evidence of any significant cost-shifting. Nevertheless, we agree with the parties and believe it is prudent to adopt new net metering tariff provisions to mitigate the potential for future cost- shifting.”
Both sides pleased
Still, the PUC said it doesn’t want any “abrupt changes” that could disrupt the solar industry. So it settled on a compromise.
Smaller solar installations (100 kilowatts or less, which include residential and many small and medium businesses) will receive back the full retail cost of the electricity produced, plus the transmission cost, but only a quarter of the distribution charge, and they also won’t get credit for “non-bypassable charges,” which include the system benefit charge and stranded costs.
So after Sept. 1, the owner of a solar installation will get 15 cents per kilowatt-hour of excess energy.
For larger customers, which include larger business, municipalities and some group projects, the reimbursement rate won’t change, but it will enable those that use 20 percent of the energy produced to bring in others in a group solar plan.
Both sides seemed relatively pleased by the outcome.
“We view the decision as positive for our customers,” said Eversource spokesperson Martin Murray. “It lessens the potential for significant cost-shifting between customers. The regulators have worked to strike a balance.’
“We got mostly what we wanted,” said Kate Epsen, executive director of the NH Sustainable Energy Association. “We got the cap removed, and that means there will be a lot more clarity going forward.”
Industry ‘tipping point’
The immediate effect of the cap’s cap removal will be on larger projects, which was reached in Eversource territory only a few months even after it was doubled. Eversource has five large projects in the queue, but now others might apply once the cap is lifted.
“That is great news,” said Jack Ruderman, who handles institutional projects for solar installer ReVision Energy. “That’s going to free some projects up”
But Ruderman said there are other factors holding up large projects. The money available for rebates from the state’s Renewable Energy Fund ran out at the end of last year, and the price for producing renewable energy credits has drop dramatically.
But the cap hasn’t had an impact on smaller projects. And there is still time to submit an application to lock in the old rate, said Ruderman, who estimated the entire process should take about three weeks to get in the queue. That’s all you need to be grandfathered, even if the actual installation doesn’t happen until after Sept. 1, he said.
“I do expect something of a rush,” Ruderman said. But he noted that business has been slower for NH Electric Cooperative customers, who – because of the utility’s legal structure – are exempt from PUC net metering regulations. The co-op lowered its net metering reimbursement rates last year, and sales might similarly slow when the rate is lowered for other utilities.
But that’s because many people don’t understand that reimbursement rate only affects the net portion left over at the end of the month, not the entire bill, “so many people overestimate the impact,” said Ruderman, former director of the PUC’s Sustainable Energy Division.
Besides, he said, as costs of solar panels continue to decline, the new rates might diminish as a factor.
“Solar energy has reached a tipping point,” said Ruderman, adding that customers “know the payback period. They know that it’s good for the environment. They know these systems have longevity. There is just more consumer acceptance.”