Another View -- Michael Whatley: NH policy must be pro-solar, pro-grid, pro-consumerBy MICHAEL WHATLEY
June 12. 2016 8:40PM
Solar energy has the power to spark a dramatic change in the way energy is harvested and consumed. It is renewable, clean, reliable, and is increasingly affordable. Each of these benefits are allowing solar power to take on a larger part of America’s electricity mix, which is certainly good for New Hampshire.
Since rooftop solar has become commercially available, New Hampshire residents, lawmakers and regulators have sought to unleash the power of the sun by installing solar systems and creating policies that encourage the proliferation of solar technology.
One such effort is net metering.
Net metering is a billing mechanism that credits solar system owners for any excess power that they generate and put back onto the grid.
In many states, including New Hampshire, net metering programs pay a retail rate for excess solar power rather than a wholesale rate. Which simply means that if the utility charges $1 for a unit of energy, it pays solar users $1 for the same unit of energy, far more than they would pay for the same unit of electricity from traditional sources.
Utilities calculate their retail rate not only based on the cost of generating electricity, but also for transporting that energy across the electric grid which the utility also builds and maintains to serve all of its customers, including solar users.
At this early stage in the deployment of rooftop solar systems nationwide, paying a retail rate for excess power from rooftop solar-using customers may not seem like a big deal. But as solar technology continues to proliferate, more and more rooftop solar users will be selling excess energy to their utilities, forcing the utilities to either reduce their expenditures on important projects like maintenance on the existing power grid that serves everyone or other alternative energy investments, such as wind energy. If this doesn’t produce the needed revenue, the state utility commission will choose to raise rates for all electric customers.
Since utilities have to meet federal and state reliability requirements, shortcutting grid maintenance costs is not really an option — meaning regulators will force utilities to pass these costs on to a smaller and smaller pool of traditional customers, including anyone who is unable to purchase solar power, especially lower income consumers who are least able to shoulder higher electricity costs.
The New Hampshire Legislature, governor, and Public Utilities Commission (PUC) are currently in the midst of determining New Hampshire’s solar energy future as they debate and make decisions regarding the state’s net metering cap, a policy which sets the amount of electricity that a utility must buy back at high cost, and net metering rates.
The House and Senate have passed legislation, which Gov. Hassan has signed into law, which lifts the state’s net metering cap from 50 megawatts to 100 megawatts and instructs the PUC to develop new net metering tariffs that take into account rate impacts on all customers. This is a good step; and one that will continue to expand markets for solar power.
The issues of infrastructure maintenance and cost shifting highlight the importance of finding the right solution to this policy decision. It is imperative that the state establish net metering policies that will provide sustainable power for our homes, businesses, grocery stores, and even our cell phones. These policies need to promote solar growth, ensure the long-term viability of the electric grid, and provide consumers with viable, cost effective electricity options.
Indeed, New Hampshire needs to ensure that its energy policies are pro-solar, pro-grid, and pro-consumer.
Michael Whatley is executive vice president of the Consumer Energy Alliance.