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A recently signed New Hampshire law makes significant changes to the operations of the state’s Renewable Energy Fund, directing money to help towns and cities develop municipal solar projects and ending a residential solar rebate program that was generally viewed as deeply flawed.
“The previously existing program had sort of run its course,” said Joshua Elliott, director of policy and programs in the state energy department.
The Renewable Energy Fund, created in 2007, is a pool of money the state uses to support renewable and thermal energy initiatives through grants and rebates. It is funded by annual compliance payments made by electric service providers that failed to buy the legally mandated proportion of their power from renewable sources in the previous year.
The sum the fund collects can vary widely from year to year, ranging from as low as $1.3 million in 2009 to $19.1 million in 2011. More recently, revenue has hovered around $7 million.
This money is then allocated across several programs including those supporting solar hot water heating, low-and-moderate income community solar, and wood pellet boilers and furnaces for residential, commercial, and industrial customers.
The new funding for municipal solar projects represents the next step for an approach just getting underway in the state.
Installing solar power can allow a municipality to both cut carbon emissions and realize significant savings on their energy bills. These savings can be used to cut property taxes or to provide additional support or services for residents. Until recently, however, there was little state or federal support for municipal solar. At the same time, getting a municipality to agree to the upfront costs has always been challenging.
“There’s a variety of competing factors for property tax revenue,” Elliott said. “It can be hard to get a warrant article passed to invest the money to purchase a solar array for town buildings.”
The state began tackling the problem this year with the Municipal Solar Grant Program, which is using a $1.6 million federal grant, part of the 2021 Bipartisan Infrastructure Law, to help cities and towns install solar arrays on municipal property. Lower-income communities that intend to retain complete ownership of their solar system will be eligible for grants up to $200,000; municipalities that don’t meet these criteria can request grants up to $120,000.
Though the program is just getting started — the application period is open until August 1 — the opportunity has already sparked wide interest from municipal governments. Community liaisons for the nonprofit Clean Energy New Hampshire have identified roughly 50 cities and towns likely to apply for a share of the limited funding.
“There’s been a huge response,” said Sam Evans-Brown, executive director of Clean Energy New Hampshire. “That shows this is a good space to be spending the money in.”
The new legislation calls for funding to be allocated to a new municipal solar program this year, with the sum likely to be announced in late August or early September. Then, before the money can be offered to cities and towns, the state will have to design a new system. The new incentive will be inspired and informed by the program now launching, Elliott said.
“We’re certainly going to take feedback, have stakeholder sessions,” he said. “And that will help refine what this program looks like.”
The bill also terminates the state’s rebate program for residential solar and wind installations, an incentive that was widely thought to be ineffective.
The program offered rebates of up to $1,000 to a limited number of households each year. In fiscal 2023, rebates totalling about $424,000 were issued.
The program used a lottery system to determine what order rebate applications would be processed in each year; applicants closer to the end of the list might not end up receiving any rebate if the funds ran out before they made it to the top of the list. That uncertainty meant the program was doing little to spur additional solar development, Evans-Brown said.
“It’s almost by definition not getting projects done: If you can’t know for sure if you’re getting rebate, it’s not factoring it into the purchasing decision,” he said. “When we asked residential solar installers if the rebate was helpful they said no.”
The program also accepted applications from any household with a solar array installed after 2012 that has not yet received a rebate, diminishing its impact on new solar development even further.
“You’re not actually helping to develop the solar market at that point,” Elliott said.
Though the recent law eliminates this rebate, lawmakers were clear during hearings on the bill that they want to see a replacement residential incentive developed. No plans are yet in the works for such a program, and it is unclear what the timeline would be for designing a new incentive from scratch, Elliott said. Furthermore, the law does not require a new program be enacted.
Elliott, however, has every intention of making sure a replacement program comes to be, he said.
“I made a commitment in public saying, ‘Yes, we are going to do this,’” he said, “and I certainly feel beholden to that.”
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