House Bill 365, scheduled for a Thursday vote in the state Senate, would require utility companies to pay above-market rates for solar power, thus forcing consumers to pay higher costs than necessary for electricity, the Josiah Bartlett Center for Public Policy cautions in a statement released today.
Such anti-consumer subsidies for a specific industry are not necessary for New Hampshire to encourage the development of alternative energy production. Solar technologies are approaching cost parity with more traditional forms of energy production and are increasingly able to compete without subsidies.
For example, Connecticut announced in December that it had entered into contracts with nine solar energy providers (including two based in New Hampshire) for an average cost of 4.9 cents per kilowatt hour (kWh), “which is approaching parity with the market price of energy,” the state’s Department of Energy & Environmental Protection pointed out.
HB 365 ignores this trend and would force utilities to buy net-metered solar energy at the default energy rate, which is about 9 cents per kWh. That is more than double the market price of about 4 cents per kWh.
Why would New Hampshire force its own citizens to pay more for solar power than the state of Connecticut is willing to pay?
This forced subsidy runs against the bill’s opening statement, which declares that “New Hampshire’s electricity consumers, including municipalities, manufacturers, commercial businesses, and other large users, strongly support more competitive retail options to lower their energy costs.”
Rather than encouraging alternative energy production that would compete on price, thus lowering energy costs, HB 365 would push prices higher by compelling consumers to buy solar power at above-market rates.
HB 365 represents a wealth transfer from all electricity consumers to net-metered solar energy producers. New Hampshire’s electricity rates are already among the highest in the nation. This bill would make the situation worse, not better — at a time when solar costs are falling and the case for subsidies is falling along with them.
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