SolarCity opening renews questions on state incentives

At a time when the state’s solar industry is starting to take off, Gov. Maggie Hassan said Wednesday she wants to make sure New Hampshire is doing all it can to help renewable energy flourish.

“We certainly want to incentivize as much renewable energy, including solar, as we can,” Hassan told reporters after speaking at a SolarCity office opening in Manchester. “We need to reduce energy costs and we need to make sure we’re as clean a state as we can be.”

SolarCity, which already operates in 19 states, is one of the latest renewable energy companies to set up shop in New Hampshire.

But as solar energy grows more popular in the state, some advocates are concerned that state regulations threaten to stifle the industry’s growth.

Some New Hampshire utilities are nearing, and one has already reached, a state-set cap that limits how many customers can sell the excess solar power they generate back into the grid. It’s a process known as net metering, and is a key incentive that makes solar projects feasible, officials say. Without it, consumers can’t get compensated for times when their solar panels produce more power than they use, such as on sunny afternoons.

The state’s renewable energy fund, which offers financial rebates to businesses and residents that install solar panels, brought in far less money last year than anticipated. And it means the state is no longer accepting rebate applications for large-scale commercial solar projects.

At the same time, the Public Utilities Commission, which oversees the fund, is considering reducing the state rebate for residential solar projects from 75 cents per watt to 50 cents per watt. Written comments on the proposal are due Friday.

Hassan said raising the net metering cap is something she will be looking at when lawmakers come back this fall.

“We’ll take a look at that issue of the utilities getting close to their caps and see if there are ways that we can work with the utilities to address that,” she said. “But mostly today I am just celebrating not only solar in New Hampshire, but the creation of good-paying jobs.”

The SolarCity Manchester center expects to create more than 75 jobs when it’s fully staffed. Since it opened three months ago the company has completed roughly 100 installations, said Lee Keshishian, east coast regional vice president of operations.

But the net metering cap threatens to affect the company’s growth rate.

“Obviously, we believe net metering is a key to having a clean energy program,” he said.

SolarCity is the nation’s largest installer of residential solar panels, and its arrival in other markets has often set off a flurry of solar installations largely because of its financing options, which are a function of its national size.

Up to now, the usual method for a New Hampshire homeowner to install solar panels is to buy them, hire a company to set them up, then take advantage of state and federal rebates and tax incentives and recoup the upfront cost over a number of years via lower electric bills.

SolarCity offers a no-money-down alternative via what is known as a power purchase agreement. Under a PPA, SolarCity installs and owns the panels on the roof and collects all the tax benefits and credits, while the homeowner purchases the electricity produced by the panels at a set rate, lower than the local utility rate, thus saving money. It also has a similar lease option, under which the panels can be bought after five years.

Such systems are routine for commercial and industrial solar customers, but are relatively new for residential customers.

According to a recent report, solar power capacity in New Hampshire grew nearly 150 percent last year. The report also indicated, however, that New Hampshire has the lowest amount of total photovoltaic solar power of any of the 32 states included in the analysis.

To maintain growth in the sector, lawmakers should keep energy policies consistent and predictable, said Kate Epsen, executive director of the New Hampshire Sustainable Energy Association.

“There needs to be leadership on the state level,” Epsen said. “That’s historically been somewhat lacking.”

At the office opening, Hassan touted New Hampshire’s economic climate, responsiveness to business needs and willingness to work with companies.

“Thank you for reinforcing this is a good place to do business,” she told a crowd of employees, dressed in green Solar City shirts. “Thanks for reinforcing we are leading clean energy here in New Hampshire.”



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