Memo to policymakers: Let solar compete

Dan Weeks

I was recently called before a New Hampshire town zoning board to seek a variance for a solar project my company installed for a local family farm. Apparently someone in town had driven by while we were constructing the 140-panel array and complained to town officials. Although we had been granted the required zoning permits many months ago, we were told to seek a variance on the grounds that solar panels in a field might now be considered a “building,” with all the attending requirements.

Thousands of dollars in legal fees and construction delays later, we were grateful to receive a unanimous vote of approval from the zoning board. A few weeks later, after spending thousands more dollars in grid upgrades required by the utility, the project was complete – at a loss.

For an established company like mine with a strong footprint in neighboring states where solar is encouraged, losing money on New Hampshire projects that directly serve the public good is not the end of the world. As an employee-owned B Corporation, my co-owners and I sleep better at night knowing we get to help local farms stay in business and cut costs for schools and nonprofits around the state. So don’t feel sorry for ReVision Energy.

Nevertheless, it’s a sad reflection on the state of solar in New Hampshire that few companies can afford to stay in business and many of the projects ReVision longs to bring to those in greatest need are simply uneconomic due to poor policy choices.

For every farm or school we manage to power with solar, there are literally dozens of others wanting to harness the sun – if only state and local policymakers would let them. The same is true for many towns and businesses looking to go solar too.

The barriers are simple but they come at a significant cost, not only for solar customers but also the public at large. At the local level, New Hampshire zoning regulations vary from town to town and frequently result in thousands of dollars worth of “soft” administrative expenses being layered on top of the “hard” engineering, procurement and construction cost. While some towns seek to encourage solar with property tax exemptions and thoughtfully crafted ordinances, many are ambiguous or even hostile to such projects, especially when a minority of residents object on aesthetic grounds. Some even treat ground-mounted solar arrays spaced 20 feet apart in grassy fields as an “impermeable” surface akin to a paved parking lot.

Then there are the utility companies. Before granting interconnection approval to solar projects of any scale, New Hampshire’s for-profit utilities require grid impact studies and hardware upgrades far in excess of what is typically charged in neighboring states, where transparent pricing guidelines are in effect.

Study costs alone run $10,000 to $25,000 at the state’s largest utility, regardless of the outcome. If utility approval is granted, it is often conditioned on $100,000 to 200,000 worth of grid upgrades, which are owned and rate-based by the utility for future revenue.

Payment is required upfront with no opportunities for competitive pricing or third-party review.

Finally, the small handful of New Hampshire solar projects that surmount local permitting and utility interconnection hurdles each year must face the stubborn reality of state policies designed to cap their size and devalue their production.

Under the state’s Renewable Portfolio Standard (RPS), established in 2006 when solar costs were high, solar generation is set at a measly 0.7% of total electricity supply through 2025. Bipartisan bills to raise the standard as solar has become the cheapest energy source (unsubsidized) on earth were met with gubernatorial vetoes in the last legislative session and stand little chance of passage in 2021. The same was true for repeated attempts to raise the artificial net metering cap of 1 megawatt per project, in spite of strong bipartisan support; another bill has been introduced this year to raise the cap for governmental entities only.

Making matters worse, when it comes to assigning a value to what little solar is produced in New Hampshire, the price per kWh set by the utilities is now well below retail rates and 50 to 75% lower than the value set by independent regulators in Maine, Massachusetts and Vermont. For the local family farm that offsets other nearby farms with solar, the price paid by the utility for its electricity is roughly half what it will charge those other farms. Larger solar systems are valued even less and one of the proposed bills in Concord would slash it further.

Taken together, these and other barriers to solar growth in New Hampshire have made solar more expensive than in neighboring states and around the world. In contrast to New Hampshire’s less than 1% solar penetration, Vermont now derives 14^ of its energy from solar, and Massachusetts recently topped 18%. Even Maine, which ranked last in the Northeast for many years, has quickly overtaken New Hampshire since a new administration took office in 2019, with billions of dollars worth of private investment and thousands of additional clean energy jobs expected in the coming years.

The direct effects of New Hampshire’s backward solar policies are less competition for companies like ReVision and fewer jobs and investment dollars for the state as a whole. In fact, the number of solar companies doing business in New Hampshire has fallen by 40% since 2017, accompanied by a marked decline in solar industry jobs even before the pandemic is taken into account — jobs which pay twice the median wage and do not require a college degree. At a time when tens of thousands of Granite Staters are unemployed, New Hampshire should welcome such private-sector jobs and investment by raising the net metering cap and applying an evidence-based approach to pricing solar generation.

The benefits of doing so would redound to the public at large. According to a new report by Synapse Energy Economics, an independent energy research firm, distributed solar projects like the one ReVision installed for the family farm above generated over 8,600,000,000 kilowatt-hours of clean electricity across New England over the last five years and saved all ratepayers $1.1 billion. New Hampshire, which shares a common transmission grid with the other New England states, received $83 million in savings, even though most of the region’s 186,299 solar arrays are located out of state. In unit terms, the study found the real value of solar to ratepayers and society at large ranges from 21 cents per kWh in direct energy value to 37 cents per kWh when public health and environmental benefits are taken into account. That’s more than three times higher than what utilities currently pay for solar in New Hampshire.

Far from a “cost-shift,” as certain Concord politicians claim, the data show that solar is effectively subsidizing the grid while adding jobs and economic growth, albeit at a far slower pace than neighboring states. As New Hampshire seeks to build back better from the economic recession, policymakers should remove the artificial barriers to private-sector growth and finally let solar shine in New Hampshire.

Dan Weeks is a director at ReVision Energy.