What is net metering worth in New Hampshire?

Net metering is one of New Hampshire’s few policies encouraging more renewable energy by paying homeowners and businesses who generate it. Now, the state is looking to change the rate of those payments.

A study that’s expected to inform the new rates was presented to stakeholders Wednesday, including findings about the value of this energy and how paying generators for it impacts consumers’ bills. While the study doesn’t account for the recent and dramatic upswing in energy prices, it provides for the first time New Hampshire-specific information on whether net metering shifts costs from those who use it to those who don’t.

Some energy experts say the study, conducted by Montreal-based consulting firm Dunsky Energy + Climate Advisors, is proof that paying for small-scale renewable energy like solar and hydro benefits all ratepayers.

Producing energy near where it’s used saves money by lowering the cost of moving energy across major, high-voltage transmission lines that cross states. It reduces how much energy utilities have to buy from power plants, and it also decreases how much utilities have to pay plants to be on call to meet demand even when they are not producing energy. 

The study was tasked with figuring out how much money this kind of energy – called distributed generation (think rooftop solar or small-scale hydro) – saves and calculating how crediting generators through net metering impacts people’s bills. The first is significant because the Public Utilities Commission has opened a docket to set new rates for net metering, with a pre-hearing conference scheduled for Jan. 5.

The latter is significant in light of an ongoing debate in the state about whether net metering shifts costs from customers who net meter onto those who don’t – or the haves and the have-nots, as Consumer Advocate Don Kreis put it.

“I think there’s a strong argument to be made based on the findings that Dunsky has already released that in fact there is very little in the way of cost shifting,” he said. “So little in fact that it might be deemed to be a reasonable amount of cost shifting such that we should be encouraging net metering rather than discouraging it.”

But that question is likely to remain controversial, said Kreis, who noted that the Department of Energy equivocated when asked whether the report confirms that there is no significant cost shifting as a result of net metering in New Hampshire.

“I think we should let the Dunsky report speak for itself,” said Dave Weisner, legal director for the Department of Energy during the presentation.

The study found that bills would go up by 1 to 1.5 percent for residential customers who don’t net meter. Commercial customers who don’t net meter would see an increase of .3 to 2.6 percent, according to the study. Everyone who net meters would see a significant decrease, bringing bills down on average.

“For all those times I’ve said, ‘There is no evidence of any significant cost shift,’ now I can finally say there is evidence that there is no significant cost shift,” tweeted Madeleine Mineau, chief operating officer at Essex Hydro in Boscawen. “Considering we are looking at 160% bill increases for energy right now, I’m going to say 1% is not significant.”

Solar developers agreed.

“What we’ve consistently found and what I think this study supports is that adding more solar to the grid doesn’t only benefit the people who own solar panels on their roof, but it also benefits the public at large,” said Dan Weeks, vice president of business development for ReVision Energy, which operates in New Hampshire, Maine, and Massachusetts.

The study looked at the value of solar and hydro over a 15-year period, starting in 2021 and ending in 2035. It found that the average value of a kilowatt hour of solar added to the grid in 2021 was 16 or 17 cents, depending if the solar was south facing or west facing. That value increased to 21 or 22 cents when environmental benefits of reduced air pollution and improved public health are included.  

Actual average payments to net metering customers during that same time period was 12.6 cents, according to Weeks. 

South-facing solar generates more energy overall but west-facing solar produces energy when demand for energy is high, in hours of the afternoon and early evening, when people are coming home from work. 

Some energy experts believe that value should be reflected in rates. “That’s the policy gap,” said Henry Herndon, an energy consultant who said the study’s findings support higher payments for energy that produces at a time of higher need. 

For Weeks, the study supports higher net metering payments. The value of solar is 40 percent higher than the payments New Hampshire solar customers received in 2021 under New Hampshire’s net metering law, according to Weeks. And that doesn’t account for the spike in electric utility rates in 2022 – a point raised repeatedly during Dunsky’s presentation. 

That was not a conclusion reached by all. Kreis interpreted the study results to mean that current net metering tariffs are a relatively close reflection of its value. “So I think that suggests that the PUC got it just about right when it adopted a temporary net metering rate five years ago,” he said.   

The full study results are not yet available, and the study could also contain flaws, Kreis warned. “This is all very preliminary analysis and discussion,” he said.

One disappointment for Kreis and others at the presentation was that the results don’t take into account the recent and dramatic increase in the cost of energy. Electric bills went up 50 percent for Eversource and Liberty customers in August, and Unitil recently requested rates that would raise consumers’ bills by around 75 percent. 

“The thing is that we’re still in a window of rising costs,” said Robert Hayden, president of Standard Power. “It’s the first time ever really in my business career, and by my observation, where renewables are much less than the cost of the traditional third-party supply market.”

Dunsky is scheduled to submit the final report and a modeling tool to the Department of Energy by the end of October.