New Hampshire is making strides in bringing equity to the energy transition. Thanks to forward- thinking legislation enacted in 2017, the New Hampshire Renewable Energy Fund supported the development of three low-income solar projects in 2018 and has awarded funding to support three more projects this year.
But even with grant funding, it can be difficult to make these projects economically viable due to their complexity and high transaction costs. That’s why pending legislation proposes to take further steps to advance energy equity via low-income solar.
Senate Bill 165, the Low-Income Community Solar Act, passed both the House and Senate, and Governor Sununu has stated he will sign the bill (http://bit.ly/NHG-CSA-news). If enacted into law, the legislation will provide a three cent per kilowatt-hour adder to solar projects providing power to communities where the majority of participants earn 300% of the federal poverty level or less. In other words, while a typical net-metering project might earn a rate of between $0.09/kWh and $0.12/kWh, under SB165, low-income solar projects could earn between $0. 12/kWh and $0.15/kWh.
Local tax policy is another issue that has the potential to spur or spurn low-income community solar. In the case of Gaslight Village, a low-income solar project awarded funding in Tilton this year, high property taxes may prevent the project from moving forward.
“Even with the grant funding, Gaslight Village project is not going to be able to move forward because at 43% of the low-income residents’ net revenue, the local tax burden is too high,” said Christa Shute of Vermont Law School’s Energy Clinic. “Some New Hampshire municipalities provide different levels of tax exemption for solar projects or payment in lieu of tax (PILOT) agreements, but Tilton has chosen not to take these approaches to facilitate low-income solar.” If the low-income adder under SB 165 goes into law, it may be sufficient to justify the Gaslight Village Project, even with the high property taxes.
Cities like Lebanon, home to the Mascoma Meadows low-income cooperative solar project, have enacted solar property tax exemptions. Having a statewide policy to not tax solar projects would level the playing field across the state.
The Mascoma Meadows project, developed by Vermont Law School’s Energy Clinic in 2018, demonstrated a new “cooperative solar” model. Cooperative solar builds on the New Hampshire-pioneered movement of Resident-Owned Communities, or ROCs. ROCs are a legal innovation that allows families in a neighborhood (generally a mobile home park) to pool their resources and collectively purchase and own the land on which they reside. ROCs empower lower-income communities by freeing them from dependence on profiteering landlords. The cooperative solar model enables the community to either purchase the array outright or use impact investors to leverage federal tax credits and then purchase the solar array in year five.
“We feel the ownership option is a really important piece of energy equity and a just energy transition,” said Shute. “It provides long-term sustainability and real, lasting benefits to these families.”
There are other low-income solar models being worked on in New Hampshire that utilize the 15% set-aside in the Renewable Energy Fund for community projects with majority low-income participants. Other completed projects include Avery Hill Solar in Laconia, providing benefits to an affordable housing community administered by Lakes Region Community Developers; and Frosty Scoops Ice Cream in Plymouth, a project led by longtime NH renewable energy champions Sandra Jones and PAREI.
Henry Herndon is Director of Local Energy Solutions for Clean Energy NH.