Net Metering In New Hampshire
Solar was the way of the future, a revolutionary idea that allowed people to save the environment and their wallets while also becoming energy independent. Not having to worry about the unambiguous impending increases of the utility companies electrical costs has helped solar become a viable option in the eyes of residential homeowners across the country. Noticing the prevalent demand of renewable and solar energy throughout the United States, local state governments have set up net metering policies which allow residents and commercial operations to sell back excess energy generated from their renewable energy production system to the utility company for a set rate.
In just quarter 3 of 2015 there was 19 states that created laws or tariffs centered around reforming net metering laws to compensate for greater production or creating policies to help the meet demand of emerging markets. Net metering laws are important when looking at the cost of solar panels. If you can sell the excess energy you produce to a utility company then you can vastly decrease the amount of time that it takes to pay off the array making solar much better investment. In New Hampshire the cost of a residential array can be justified in just 4 to 5 years allowing decades of free energy generation plus the cash flow produced by net metering.
But currently in NH the exponential growth of the solar industry has outgrown the old net metering policy and soon will exceed the recently established one. Increasing the from a 75 megawatt cap limit to 100 in early 2016 the policy reform has come in shallow for the industries demands. The 25 megawatt cap will provide net metering options for the first installations that can meet the limit, then there will have to be a larger cap or movement to a different policy. Having met the 75 megawatt limit in 2015, now the number of installations is only set to increase for 2016. From 2014 to 2015 there was a 341 percent increase in the dollar amount invested in solar. Also a 6 percent drop in solar panels prices. Realizing this great demand Public Utilities Commission has been given ten months to create a more sustainable pricing model for the state.
More formidable pricing models have already been put in place for states like Texas and Minnesota where a value of solar approach is being implemented as an alternative to the net metering model. The value of solar approach works to create a purchasable price of solar energy apart from the utility company's rates. The price is calculated by adding in all the avoided externalities provided by clean energy generation. These consist of avoided fuel cost for utility companies, transmission cost, avoided internalized emissions cost, avoided greenhouse gas emissions, and lesser need for standby power generation systems. With these factors included, a better represented price of renewable energy is being put in place. Then with this price the home or business owner signs a contract which guarantees that they will be able to sell their energy to the utility company at the price created through the model for the duration of the contract often 25 years or the expected life of the solar system. As New Hampshire and the rest of the country alike start to take notice to the usefulness of this type of pricing model ones of similar respect will be formed to meet specific states needs. This will in turn help establish a long term fixed rate for electricity providers and increase the investment potential for everyone looking into a solar system to help meet their electrical needs.
Steven Hardt (Big Sky Associate)
Published May 20, 2016