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Franklin solar project on hold until net metering cap raised



Monitor staff
Sunday, February 28, 2016
Franklin has big plans to construct what would become New Hampshire’s largest solar installation, across seven separate parcels throughout the city.

When complete, the 8.5-megawatt project would help cut the city’s electric bill in half, Mayor Ken Merrifield said.

But there’s a hitch. While the project has gotten municipal sign-off, a major state incentive that makes the development financially feasible is in limbo.

“We can’t go further with these projects, although they are ready to go,” Merrifield said.

Franklin is one of several municipalities in New Hampshire turning to solar power as a way to reduce electricity costs. But those big projects face uncertainty as state lawmakers debate the fate of the solar incentive, known as net metering.

It allows customers to sell excess solar power back into the grid. But after a recent surge in development, two utilities, including the largest in New Hampshire, have hit a state-set cap that limits how many customers can net meter.

Now, lawmakers are considering bill that would double the cap’s size – to 100 megawatts – and require the Public Utilities Commission review current net metering rates.

The problem, some say, is that the legislation won’t raise the cap high enough for all the large municipal projects that are in the development pipeline.

Most of the new cap allowance would go to residential customers, with just 10 additional megawatts for commercial projects. Franklin’s proposal alone would eat into most of that capacity.

In the city’s case, it needs that net metering approval before it can get a bank loan and begin construction.

“By the time they turn the switch on this new law, all the available space will be filled up instantly,” said Andrew Kellar, the Founder of New Hampshire Solar Garden, which is developing Franklin’s project. “The caps will be filled again.”

The net metering bill has so far proved controversial.

Solar companies and renewable energy advocates argue net metering is a key incentive that makes projects financially viable. Utilities and some business groups, however, say solar customers don’t pay their fair share for pole and wire upkeep because of the net metering reimbursement.

Through net metering, utilities pay residents and businesses for the excess solar power they produce. Each type of customer is paid under a different reimbursement rate.

While smaller residential systems get a bill credit based on the full retail rate – roughly 15 cents per kilowatt hour – larger systems are cut a check using a lower energy rate.

The bill calls for the PUC to evaluate those rates to ensure they are fair, which is expected to take months.

“The cap is really nothing more than a transition to a permanent fix,” said Rep. Frank Edelblut, a Wilton Republican who is sponsoring the bill.

The proposed cap increase for commercial projects is large enough, he added, because those take a longer time to develop than small residential installations, and shouldn’t be held up by the 10-month PUC deliberation.

But it’s a point Kellar disputes. Franklin is supposed to start construction this spring, but until the legislation passes, the project’s future is uncertain. “We may have to wait until next year to get it built,” he said. Several of Kellar’s other projects, in Milton, Hillsboro and Salem, are also dependent on an increase in the net metering cap.

The Milton project would power all the town buildings, local residents, a farm and a nonprofit with section 8 housing.

Some large municipal projects are already within the cap, and moving forward. Warner has plans to install two arrays that would power all town buildings and the Warner Village water district. The plan comes before voters at town meeting this year.

Many in the solar industry are watching the net metering bill move through the state house. Edelblut’s proposal will come up for a vote in the Republican-controlled House in the coming weeks. Gov. Maggie Hassan has voiced support for an increase in the net metering cap.

Jim O’Brien, with the New Hampshire chapter of the Nature Conservancy, said the faster the bill is passed, the more quickly a long-term solution will be in place. That will help the renewable energy market thrive.

“If we don’t get it figured out at the PUC, there’s going to be a lot more Franklins not moving forward,” he said. “What we need is certainty in the market.”



(Allie Morris can be reached at 369-3307 or at amorris@cmonitor.com.)