A solar subsidy double whammy


Technological innovation has brought solar power to the brink of market competitiveness. It will never be as reliable as a gas or nuclear plant that can run 24/7, but as a supplement it doesn’t have to be. When its price is truly market competitive, individuals and businesses will rush to build their own facilities so they can lower their bills and make money selling power back to the grid. 

We appear to be on the verge of such a transformation, as the price of producing solar power has fallen dramatically in the last half century. By at least some measures, solar generation is already price competitive. And yet the Legislature appears set to pass two simultaneous subsidies that would raise New Hampshire’s already astronomically high electricity rates for the express purpose of creating huge new subsidies for the solar industry (and hydro too).

The first subsidy was passed by the Senate last week. The amended version of House Bill 365 would expand the state’s existing net metering subsidy. Under net metering, utilities are forced by law to pay above-market rates for electricity purchased from small-scale, consumer-owned renewable power generators (think rooftop solar). 

The Senate’s version of HB 365 would allow this net metering “tariff” (read: subsidy) to apply to generators who produce up to 5 megawatts of power. (The current limit is 1 MW.) A 5 MW generator is not a home solar array. That’s large enough to power thousands of homes. Here’s a newly opened 5 MW solar plant in Egypt.)

Supporters say the bill would encourage the creation of new solar facilities. But that isn’t necessary given recent advances in solar technology. That also doesn’t explain why the bill contains a provision to allow existing power plants to convert from wholesale generators to net-metered generators in what can only be a blatant consumer rip-off. 

Most New Hampshire hydropower plants already qualify for net metering under the current 1 MW cap. But some, notably four of the hydro plants Eversource sold to Hull Street Energy last year, generate between 1 and 5 MW. The amended version of HB 365 would allow those facilities to legally reclassify themselves as net-metered generators after they fulfill their existing wholesale contracts. 

Once these hydro plants are reclassified, utilities by law would have to pay them at the default energy rate rather than the wholesale rate. The default rate — about 9 cents per kilowatt hour (kWh) — is roughly twice the wholesale rate — about 4 cents per kWh. Consumers would be forced by their own elected representatives to pay twice the wholesale price for hydropower generated by existing hydro plants. 

The New England Ratepayers Association estimates that the subsidies in this bill will cost consumers about $10 million a year. But legislators have still another plan to compound the subsidy. 

Senate Bill 124 increases the state’s Renewable Portfolio Standards. The bill would mandate that 18.9 percent of New Hampshire’s power come from new solar generation by 2040. That’s up from 0.5 percent this year. 

The double whammy, then, would work like this: The state by law forces utilities to pay twice the wholesale rate for net-metered solar power, then compels utilities to buy 38 times more solar power. 

Just like that, legislators would create a huge transfer of wealth from Granite State residents and businesses to a politically favored industry. 

Legislators considering these bills should take note of a study published this week by the Energy Policy Institute at the University of Chicago. It concludes that Renewable Portfolio Standards increase the cost of electricity far beyond the benefit of the carbon reductions they cause. The “cost per metric ton of CO2 abated exceeds $130 in all specifications and ranges up to $460, making it at least several times larger than conventional estimates of the social cost of carbon,” the study concluded.

With a retail electricity rate 60% higher than the national average, New Hampshire should be doing all it can to lower electricity rates. Instead, legislators continue pushing laws designed to raise rates even further.  

2 replies

    the author has no understanding of the cost of solar energy. All he does is parrot what he heard from the Solar con artists, “the cost of solar is coming down and is on par with “market competitiveness” He has been told what the real market price is, but he apparently won’t listen to technical people, maybe because he is smarter with a degree in slang English or Political
    “science”. BTW, no one has explained how the study of PS helps ppl put food on the table or roof over…
    So what is the “market” ? If there is a 500% taxation on electricity, is that the market ?
    As of 6:48, April 26, 2019 the wholesale cost of electricity in New England (an area in the United States that includes 6 States) is a low of $0.019 to $0.024 (that’s 1.9 cents to 2.4 cents/kwh. (according to that org. that controls the New England grid-Independent System Operator, ISO-NE).
    Some ignorant ppl will say that the diff. between the wholesale cost and what you pay is transmission costs. If you listen to them then you deserve to pay a 600 % taxation on electricity. Note that MA Off-shore wind was bid at 18 1/2 cents, wholesale.
    Bottom line: the cost of solar is coming down to what ? What is the Free Market cost to install and sell solar power ? How much will it cost to include batteries? We know that subsidized and mandated wind is 18 1/2 cent, without batteries.

    And to add insult it injury, Bill Gates is having China build a Clean Generation IV power plant that the bureaucrats won’t let him build in the U.S. The plant’s fuel is waste material, which means that the fuel is free or they should pay him to take the waste. The plant is expected to cost about the same as the same size natural gas fired plant. With the money wasted/yr on the Alternative Energy scam it’s estimated that we could build 40- 600 MW plants per year and supply the world. And we have the manufacturing facilities and crafts people to build major parts in New Hampshire.

    BIA & the NH Dept. of Economic Development won’t help because it’s “above their pay grade”, they say. The International Brotherhood of Boilermakers Union management would rather fight to the death than cooperate with Westinghouse to have the plants built at that facility or as long as Trump is in office. (i told the union that they should buy the plant and run their own company, seeing that they think Westinghouse management is so corrupt and dumb.)

    What does this say about the intelligence of the Democrat and Republican Parties and the people that vote for them ???

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  1. […] proposal would force the electric companies to buy from larger producers, up to 5 megawatts. That’s enough to power thousands of homes. From there the math is simple: Lower-priced power from nuclear, natural gas, etc. is driven off the […]

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