The Path to Large Scale Solar and Offshore WindApr 17, 2019
There is reason to be optimistic about the future of clean energy development in New Hampshire, especially when it comes to solar and offshore wind. Utilities are working with customers to create pilot programs for on-site battery storage fed by on-site solar panels. Manufacturing facilities are installing solar panels to power energy-intensive manufacturing operations, thereby reducing demand on the regional electric grid. Offshore wind developers are taking a closer look at installing a new generation of wind turbines along the state’s coastline to bring emission-free energy into the region.
But moving to a clean energy future will require a regulatory framework that facilitates siting renewable energy facilities in the state and incentivizes investment in renewable facilities themselves, as well as associated manufacturing and technology industries. Siting large-scale solar and wind projects within the state is challenging. In New Hampshire, a state siting committee has the power to decide whether large generation and transmission projects can be approved, approved with conditions or denied. Local governments control siting approvals for smaller projects that do not meet the threshold for state siting jurisdiction. Either process can create barriers to development. Local zoning can be unintentionally restrictive so that placing facilities in appropriate siting locations would be impossible without regulatory accommodations. The state siting process, which was created to simplify and provide certainty on the permitting process that developers would otherwise need to follow, has not always worked as efficiently as intended by the legislature. For example, adoption of strict regulatory restrictions on wind facilities has led most industrial-scale wind developers to defer proposing any additional projects in the state.
There is some encouraging news on siting challenges, however. Some municipalities are initiating a review of their ordinances and site plan review regulations to determine if updates are needed to accommodate the unique demands of commercial-scale renewable energy facilities that are subject to local approval. For offshore wind, the governor’s office has given a nod to evaluating coastal areas for potential siting. At the same time, at least one offshore wind developer has publicly described a five-year plan for siting wind turbines along New Hampshire’s coastline. The development would potentially bring oversized turbine manufacturing facilities to New Hampshire’s coastal communities, along with increased employment opportunities. It is likely that if the state started a comprehensive review of a potential regulatory path for offshore wind development, including approval of facility-to-shore transmission, additional private investment would be encouraged.
Meaningful growth in clean energy development may also depend on state and local incentives. With federal tax incentives scaling back over the next few years, state incentives like the Renewable Portfolio Standards and net metering will become more important. Net metering is an important tool for renewable energy development because it allows the power producer to obtain credit for power fed into the grid. For example, some large solar projects cannot take advantage of net metering as a result of existing caps on the size of qualifying projects, thereby discouraging development in municipalities throughout the state. If pending proposals to raise those caps become law, a robust market for additional solar projects could bring additional private investment into the state, which arguably would save all ratepayers money by reducing the need for more centralized power plants and large transmission.
Localities can also provide incentives for renewable energy development by providing local property tax relief. For example, municipalities are authorized under state law to enter agreements for Payment in Lieu of Taxes, or PILOT agreements, in order to reduce tax liability for qualifying renewable energy facilities. Municipalities can also adopt property tax exemptions to reduce the additional tax liability otherwise created by the installation of solar panels and other renewable generation hardware, as described in https://orr-reno.com/could-your-solar-property-qualify-for-a-tax-exemption/
The state’s path to a clean energy transformation, along with increased economic activity and employment, is within reach if government can adopt the right policies and incentives to take advantage of private investment waiting to happen.
About the Author: Maureen D. Smith