Economic Incentives for Renewable Energy Systems

New Hampshire residents are fortunate to have access to several economic incentives to utilizing renewable energy systems which have been developed at the local, state, and federal levels.  These incentives help facilitate the development and use of renewable energy systems which benefit the environment and our beautiful state.

At the local level, residents of New Hampshire may seek to take advantage of renewable energy property tax exemptions pursuant to RSA 72:61- 72:72 which permits municipalities to offer exemptions from their local property taxes for certain renewable energy systems such as solar energy systems, wind-powered energy systems, and wood-heating energy systems.  A quick review of your Town or City’s website should reveal the availability of any tax incentives for use of renewable energy systems on your property.  These tax exemptions work by exempting the appraised ad valorem value of the renewable energy system from the total assessed value of the property to elicit a tax neutral outcome.  Accordingly, tax payers are not discouraged from installing renewable energy systems by fear of an increased property tax bill and local municipalities are not forsaking tax revenue.

At the state level, New Hampshire residents may take advantage of incentive payments administered by the Public Utilities Commission (“PUC”) pursuant to RSA 362-F:10 and Puc 2500 for the installation of renewable energy systems with electric output of 10 kilowatts or fewer at the applicant’s residence.  Any homeowner who intends to install a small renewable generation facility and seek an incentive payment from the PUC (amounting to a one-time payment of $3 per watt of nominal generation capacity up to a maximum payment of $6,000, or 50 percent of system costs, whichever is less, per facility) is required to get pre-approval of the installation from the PUC before submitting a final incentive request form.  The eligibility criteria and approval procedure are aptly explained on the PUC website.

Net energy metering is another viable option for New Hampshire residents at the state level.  Under this concept, individual electric utility customers are authorized to own or operate an electrical generating facility, like a wind or solar farm, which is connected to a larger electric distribution system and is used to offset the customer’s own electricity requirements.  These “customer generators,” as they are called pursuant to RSA 362-A, offset their electricity requirements and costs using a practice called net energy metering which is defined as the process of measuring the difference between the electricity supplied over an electric distribution system and the electricity generated by a customer generator which is fed back into the distribution system.  When a customer generator’s net energy usage is negative (meaning the customer generator feeds more electricity into the grid than then it receives) over a billing period, the surplus is credited to the customer generator as a credit for use in future billing cycles or in the form of cash.

In 2013 the concept of net energy metering was broadened to include the possibility that a customer generator serve as a “group host” for the purpose of “reducing or otherwise controlling the energy costs of a group of customers who are not customer generators.”  RSA 362-A:9, XIV(a).  Like the concept of individual customer generator net energy metering, the group host is credited or paid for its surplus generation at the end of the each billing cycle and is responsible for appropriately allocating the same to the members of the group.  RSA 362-A:9, XIV(c).  Accordingly, using group net energy metering, a solar farm on one parcel of land could benefit several geographically diverse households or businesses in New Hampshire as long as they were on the same electric distribution grid.

Finally, at the federal level, the federal government offers a several federal tax credits for residential energy property to include credits for the installation of solar electric systems, solar water heating systems and fuel cells, wind-energy systems and geothermal heat pumps.

In conclusion, renewable energy systems are becoming more accessible and understanding the various economic incentives at the local, state and federal level may inform your decision as to whether to invest.