New Hampshire’s first open community solar project moves forward despite state policy barriers

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The first publicly available community solar project in New Hampshire hopes to pave the way for more such developments in a state where energy policies have made them challenging to complete.

The small southern New Hampshire town of Jaffrey is working with ReVision Energy to develop the array atop a former municipal landfill, with the goal of coming online in 2025. The town will receive annual lease payments for use of the land, and residents and others in the Eversource utility territory will be able to buy shares of the project, lowering their electricity bills and supporting the environmental benefits of renewable energy.

“It’s the perfect use of land that can’t do anything else,” said Jaffrey town manager Jon Frederick. 

At the same time, planners hope the project helps demonstrate the potential for community solar in New Hampshire and spark policy changes that would make the concept more financially feasible in the future.

Community solar challenges

New Hampshire authorized the development of community solar in 2013, but only small-scale projects serving specific communities or neighborhoods have ever been built. The state’s energy policies have made larger, publicly available projects financially unworkable, even as other New England states have actively incentivized such projects by lowering logistical barriers and offering financial subsidies, said developers and clean energy advocates. 

“The problem with community solar in New Hampshire is that the rate of reimbursement is much lower than the rate in all the surrounding states,” said Sam Evans-Brown, executive director of advocacy group Clean Energy New Hampshire. 

At the heart of the problem are the state’s net metering rules. Net metering is a system that lets consumers offset the cost of power drawn from the grid by generating their own energy, often using solar panels. In New Hampshire, a solar system smaller than 100 kilowatts receives a credit worth 100% of the cost of transmission and the electricity itself and 25% of the cost of distribution. Systems between 100 kilowatts and 1 megawatt receive credit only for the power itself. Only municipal users can claim any credit for projects over 1 megawatt. 

At the same time, community solar projects have higher administrative costs, as they need to track and reconcile the use of dozens or even hundreds of consumers. Traditionally, the net metering rates have not been high enough for community solar projects to make financial sense. 

The lack of predictability is also a barrier: Electricity supply from Eversource in New Hampshire, for example, is currently priced at 8.29 cents per kilowatt-hour, down from 20 cents per kilowatt-hour over the same period last year. And the number changes every six months as the utilities update their rates. 

“It is so volatile,” Evans-Brown said. “When you try to do the financial models, you’re kind of taking a bet.”

Overcoming obstacles in Jaffrey

In Jaffrey, ReVision is taking advantage of evolving policies and using several strategies it hopes will overcome these obstacles. 

In 2019, state legislation pushed by ReVision simplified the billing process for community solar customers. Previously, these consumers would receive a bill from the utility for their full month’s electricity use, as well as a payment from the solar operator for their share of the power generated. The new rules combined the processes, crediting the solar generation directly to a customer’s electricity bill. That streamlining was just enough to get things moving in Jaffrey, said Dan Weeks, ReVision’s vice president of business development. 

“That was a big barrier in the past,” he said. “With that administrative progress we felt we were far enough to take this big step.”

The project deals with the size limit on net metered projects by keeping its AC capacity just below the 1 megawatt mark, so it remains eligible. 

The company decided to sell shares in the development rather than opening it up to subscribers, a choice that creates more value for consumers, who get to own all the power produced and the associated tax credits. The idea is that consumers will receive low- or no-cost power even as retail electricity power prices increase, creating savings that will pay for the initial investment, and then some.

Historically, however, it was difficult to make those numbers pencil out because of the combination of low net metering rates and frequently changing power prices. Indeed, the current supply price of 8.29 cents per kilowatt-hour would not be enough to keep the project afloat. ReVision is banking on U.S. Energy Information Administration projections that power prices will go up in coming years, creating greater savings for shareholders.

“There will definitely be a different rate at the time it is turned on,” Weeks said. “We feel pretty confident that individuals will save regardless.”

An ongoing difficulty remains, however: State law requires the total consumption of the community solar group members be equal to or greater than production of the solar farm. However, many shareholders are interested in buying a stake that is larger than their consumption so the solar credits will offset their entire energy bill — the delivery of the power as well as the electricity itself. That leaves ReVision with an unbalanced equation.

This dilemma is likely an unintended side effect of the way net metering rules have evolved in the state, Weeks said. ReVision is in talks with legislators about how they might be able to change the law to remove this obstacle, a move that would benefit both the Jaffrey project and future community solar plans.

“We have willing legislators who want to address it, so the program can realize its intended goal,” Weeks said.

If a change in law does not come through, ReVision will look into partnering with nonprofit groups or municipalities that might be interested in buying smaller amounts of power to offset some, but not all, of their consumption, which would help rebalance the legally required equation. 

As the plan comes together, others in the New England solar space will be watching, Evans-Brown said. 

“The thing that’s exciting about ReVision doing this is it’s kind of a trial to see if we can make this work,” he said.

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