The financial effect of having solar panels on your rooftop won’t change much under a much-anticipated state regulatory ruling.
The ruling also lifts the cap on how much small-scale solar power can operate in the state, and it starts the ball rolling on studies about how future prices of solar power should be determined.
“I’m happy that the utilities have moved from the 20th to the 21st century,” said Don Kreiss, the state’s consumer advocate, responding to the Public Utilities Commission order about net metering, under which solar panel owners are paid for electricity they sell back into the grid. “This is the paradigm shifting moment where we move away from the spin-the-meter-backwards that was fine in 1974 ... into a process whereby we’re more deliberate about what the actual just and reasonable rate for net metered energy is.”
The 74-page order was handed down Friday by the Public Utilities Commission. It goes into effect immediately, although lawmakers can alter it if they wish when the Legislature returns to session next year.
Under the order, nothing will change until the year 2040 for existing solar units under 100 kilowatts, which is many times the amount installed on most homes.
Solar installations that move onto their local utility’s waiting list by Sept. 1 will also be “grandfathered” until 2040 and allowed to use the existing system, under which solar panels are reimbursed the full retail price of electricity for every watt they send into the grid.
One of the main outcomes of the order will be to remove the cap on how much solar power is eligible for residential net metering in the state. The limit is currently 100 megawatts, which is 100,000 kilowatts. For years, New Hampshire had plenty of room under a statewide cap, but the boom in solar power has pushed the limits.
The other major change is that installations after Sept. 1 will not be entirely reimbursed for the portion of their bill known as the distributed charge, one of two charges designed to reimburse utilities for the cost of maintaining the electric system’s poles, wires and substations. Utilities have argued that the existing full reimbursement of all distribution charges means that solar panels are not pulling their full weight to maintain the power grid, indirectly shifting some of that cost onto non-solar customers.
Residential systems will still be credited monthly at 100 percent of retail energy and transmission charges. The dollar amount of the change depends on how much electricity is used and produced by a given system.
A hypothetical example given by the New Hampshire Sustainable Energy Association using current Eversource rates indicated that total net metering payment would decline under this ruling by 3.55 cents per kilowatt-hour, or roughly 20 percent, from 18.16 cents to 14.61 cents. That doesn’t mean the reimbursement would decline 20 percent, however, as this payment is made only on excess electricity generated, above the amount of electricity used during the course of a full month.
For example, a home that generated 1,000 kWh and used 900 kWh in a month would see a $3.55 decline in the monthly net metering payment for its 100 excess kWh. But it would still get the full financial benefit of avoiding payment for all the solar power that the home produced, reducing its energy bill to nothing, although it would still have to pay a set $12.95 for system maintenance.
The PUC ruling had been anticipated because rules about reimbursing home solar power can make or break the industry in a particular state. Some states have seen sharp rollbacks or changes to net metering that have produced a political storm – most notably in Nevada, where lawmakers all but killed net metering and then had to completely change course after a huge public outcry.
New Hampshire’s ruling drew praise, or at least cautious praise, from most sides of the debate Monday.
New England Ratepayers Association, a lobbying group that seeks to reduce electric rates and has opposed many solar payments, called the PUC ruling a “step in the right direction.” The statement from Marc Brown, the group’s president, expressed hope that studies started by the ruling would end what it calls the shifting of costs from solar to non-solar customers.
Under the order, Eversource must perform what is known as a “marginal cost of service” overseen by the PUC staff, designed to help figure our how much value so-called distributed energy resources have on the grid.
This issue is a contentious point in the solar debate, with proponents saying that solar panels on individual homes actually cuts costs for other customers because it relieves pressure on the grid, while opponents say that it adds costs for other customers because solar owners don’t pay their fair share of system maintenance.
The New Hampshire Sustainable Energy Association, a pro-solar group, was enthusiastic about the ruling Monday, saying it was “pleased with the result” and arguing that the PUC supports their stance that no shifting of costs exists.
Martin Murray, a spokesman for Eversource Energy New Hampshire, which has about 5,000 customers with solar panels, said the ruling was “positive for our customers” as it “lessens the potential for signficiant cost-shifting.”
He praised the formation of a pilot program to test time-of-use rates and a program to enable more solar usage by low-income customers.
“During the course the proceeding, both the utilities and the private renewable energy developers moved to middle ground – agreeing on many issues. ... It’s clear that where any disagreement remained, the regulators have worked to strike a balance,” he wrote in an email.
Kries, the consumer advocate, praised the utilities for compromising during negotiations.
He expressed two concerns about the order. One is that it says nothing about community solar, a system under which multiple properties can share the financial benefits of a single solar power system.
His other concern is that the PUC order denied a proposal to make it easier for people to sell the renewable energy credits that solar power accumulates under government systems designed to encourage alternatives to fossil fuel-generated electricity
(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)