Concentration of CO2 in the Atmosphere

Local Renewables Lower Electric Rates for All Granite Staters

CENH’s proposed net metering rate would add compensation for an additional 50% of the distribution rate for small generators (<100kW) and 50% of the transmission rate and 50% of the distribution rate for large generators (>100kW). These changes would result in improved economics for local solar, and would still result in $8 million dollars of savings per year for non-solar customers.

Sam Evans-Brown

A new analysis by Clean Energy New Hampshire shows that allowing homeowners to sell excess electricity from solar panels back to the grid through the policy known as “net metering” decreases electric rates even for people who don’t own solar. According to the testimony of Tom Beach of Crossborder Energy, the avoided system costs that result from deploying local small-scale renewable energy generation substantially outweigh the costs of net-metering, which means the Granite State could afford to pay solar customers more for their generation, and still reduce non-solar customers’ electric bills by an average of $8 million a year.

For context, later this year the New Hampshire’s Public Utilities Commission (PUC), will decide how much those who generate local renewable electricity should be compensated for the energy they export to grid. This decision will occur in PUC Docket No. DE 22-060, and a negative decision could put solar out of reach for many Granite Staters, hurting both our economy and environment. In that proceeding Clean Energy NH is proposing an expansion of the current net-energy metering (NEM) credit issued to New Hampshire residents, businesses, cities and towns for the clean energy they generate. Our proposal is a modest increase of the NEM rate for residential customers that would amount to about a 2.5 cent per kWh increase.

To support this position, our careful review and re-analysis of a study sponsored by the State of NH upends the often repeatedbut never quantifiedclaim that when more people invest in solar, electricity rates rise for everyone else. It shows our proposal will continue to lower electric bills, while catalyzing further investment in solar by homeowners, local governments, and businesses to pursue energy self-reliance and financial security. Under our proposal, non-solar customers in Eversource service territory alone would save $123 million between 2021 and 2035.

Net-Energy Metering” is a mechanism that for decades has been the bedrock of the economics that allow homeowners, municipalities, and businesses to install solar. For each kilowatt hour (kWh) of extra electricity that the small generators produced, they would receive a credit on their account. This credit ensures that small and mid-sized solar generators get fair value for their energy and investment.

Previously, solar customers received a credit that was equal to the full retail rate for a kWh of electricity, but following a decision by the public utilities commission in 2017 that rate was decreased because of concerns that net-metering would increase electric rates for those who don’t have solar panels. Critics of solar have claimed that the credits for excess solar energy generation represent a “cost shift” to electric customers who don’t own solar. These critics claimed that when solar customers reduce their bill, non-solar customers have to pick up the slack and pay for the fixed costs of the electric grid. The previous rate is now referred to as NEM 1.0, and the current rate is called NEM 2.0.

However, our analysis shows that when your neighbors buy solar panels, you also experience a reduction in your bill, even if you never “go solar.” This is because locally generated electricity reduces the overall cost of the electric system as a whole by:

  • Avoiding purchasing expensive electricity and capacity from large power plants during expensive times of year;

  • Wasting large amounts of electricity by transmitting it from far away; and

  • Avoiding the need to upgrade local electric infrastructure resulting from generating more electricity close to where it is consumed.

Based on this analysis, CENH is recommending that NEM 3.0 should modestly increase the compensation that solar customers receive for their excess generation. The CENH proposal will improve the economics of distributed generation, which will mean more investments in local renewable energy generation, allowing the industry to grow at a sustainable rate.

Read CENH’s full testimony in the net metering docket: https://bit.ly/NHPUC-DavidLittellTestimony and https://bit.ly/NHPUC-TomBeachTestimony

Sam Evans-Brown is the executive director of Clean Energy New Hampshire. He was an energy and climate journalist for ten years before transitioning to the policy arena.

To see this article in a pdf file, as it appears in print, please click HERE.

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