Opinion: Electric rates are spiking. Do renewables help or hurt?
How do solar arrays lower energy costs for everyone?
For years, state lawmakers and Governor Sununu have been locked in a heated debate about the costs and benefits of renewable energy in New Hampshire.
On one side, bipartisan majorities in the State House and Senate have sought to increase net metering so that solar and other homegrown renewables can compete with fossil fuels. Their argument? Lower costs and carbon pollution. On the other hand, Gov. Sununu has vetoed nearly a dozen such clean energy bills, claiming they raise costs for other ratepayers. He even went so far as to insult clean energy companies like my own.
Now the verdict is in, thanks to a long-awaited report from Sununu’s Department of Energy. The results were consistent with a long line of studies on the value of solar net metering on the grid. As a father of three young kids who stand to inherit a badly damaged climate, and as a member of our state’s budding solar industry, these findings hit close to home for me.
But first, a word on how the study came to be. In 2017, the NH Public Utilities Commission implemented a new net metering program, which pegged the value of renewable energy from small-scale generators to the variable electric rates offered by our main utilities. When the utilities raised or lowered their default rates, the value of excess net-metered electricity from solar arrays and hydro dams would go up or down accordingly. The tariff prohibited “cost-shifting” and charged the PUC with carrying out a study to inform future net metering.
Although the formula was straightforward, the resulting value of clean electrons delivered to the grid was substantially lower than neighboring states, which based their net metering rates on empirical studies of the actual costs and benefits of solar.
Not surprisingly, New Hampshire has by far the lowest level of solar investment and penetration in the region, at 1.2 percent of total electricity, compared to 5 percent in Maine, 17 percent in Vermont, and 20 percent in Massachusetts as of mid-2022. New Hampshire also has the region’s highest electric rates.
Fast-forward five years to the new report presented by the Department of Energy and independent experts Dunksy and Power Advisory LLC. Although the complete study has yet to be released, the detailed analysis of hourly avoided energy costs attributable to net metering showed a pronounced cost-shift is, in fact, occurring — but not in the direction claimed by clean energy opponents.
The report found that the average unit of net-metered solar electricity was worth at least 21 cents per kWh in 2021, including 5 cents of environmental benefits from reduced air pollution and improved public health. When multiplied by the total amount of solar generation in New Hampshire, as documented in the report, the aggregate value of solar came to $27 million last year.
By contrast, families and organizations with solar in New Hampshire actually received just 12.6 cents per kWh, on average, for their electrons in 2021 under state net metering rules. That’s 60 percent less than their empirical value of 21 cents, amounting to a total loss of roughly $11 million.
How do solar arrays lower energy costs for everyone? According to the report and a growing body of research approved by the PUC, solar panels reduce on-site demand and deliver excess power to the grid at periods of highest need. When paired with battery storage, solar arrays can continue offsetting peak demand into the evening hours. As more electric vehicles hit the road and utilities start allowing bidirectional charging, such savings will only grow.
Thanks to these and other benefits in the solar “value stack,” utilities are less reliant on expensive and polluting “peaker” power plants, which deliver power inefficiently over long distances. A case in point is Merrimack Station in Bow, the last remaining coal-fired power plant in New England, which is currently receiving $189 million in “forward capacity” payments from ratepay ers just to remain on standby from 2018-23.
Looking forward to 2035, the new study also found that increasing deployment of solar in New Hampshire will reduce energy bills for the average ratepayer even under the most conservative assumptions, which disregard the clear trend of increased electrification of the building and transportation sectors, as well as the documented public health and environmental benefits of reduced carbon emissions.
In one extremely conservative scenario, the report found that renewables could increase rates to other customers by roughly 1 percent — a statistic that has featured prominently in coverage of the study but is sadly misleading because it conflates highvalue solar with lower-value hydro and ignores many of the accompanying benefits of solar identified elsewhere in the report.
The new report confirms what numerous other value-of-solar studies have shown over many years: Net metering is a net good not just for those with solar panels but also for society at large. As Granite Staters gird ourselves for spiking electric rates, our leaders would do well to follow where the data leads and finally let solar compete.
Dan Weeks is a co-owner and vice president at Re-Vision Energy, which has offices in Brentwood and Enfield.