A defining New Hampshire renewable energy policy is once again facing proposed changes that opponents say would hamstring it and the state’s clean energy market.
Divided on the role of renewable energy in lowering electricity costs, the House Finance Committee voted, 14-11, Oct. 30 to recommend passage of the amended House Bill 219. The bill would alter the structure of the Renewable Portfolio Standard, which sets goals for the amount of renewable energy fed to New Hampshire’s grid and directs money into the Renewable Energy Fund. That fund, in turn, is intended to bolster new renewable energy projects statewide.
HB 219 proposes eliminating the portfolio’s specific provisions on solar energy while indefinitely fixing the compensation rates electricity providers must pay into the Renewable Energy Fund when they do not meet renewable quotas.
Those in favor of the proposal say it will deliver needed rate cuts to consumers by reducing the amount that utilities spend to comply with the standard. Opponents argue the proposed changes would discourage renewable development in New Hampshire, taking the wind out of a policy that defines clean energy goals and has been the target of other cuts in recent years.
The discussion reflects a larger debate about the merits of the standard and the state’s role in encouraging renewable energy development.
“The role of the (Renewable Portfolio Standard) is foundational, but attacks on its efficacy are nothing new,” said Nick Paul, director of legislative affairs with Clean Energy New Hampshire, in an interview.
Understanding the program
A renewable portfolio standard is a system through which a state can track and set goals for the proportion of clean energy used across its grid. A majority of U.S. states have established such a system, according to the U.S. Energy Information Administration, which in 2023 listed 36 states with renewable portfolio standards or similar programs.
Under New Hampshire’s standard, which was first enacted in 2007, electricity providers are given a percentage goal for the amount of renewably generated energy they sell. That breakdown has grown year over year, with electricity providers now expected to source 25.2 percent of electricity from renewable sources.
Within that 25.2 percent, renewable energy sources are further broken down by category, and the relative amount of energy that providers are required to source from each category also changes from year to year.
If a provider cannot, or does not, purchase enough from those sources to meet the quota of renewable energy set by the Renewable Portfolio Standard, they can also meet that quota in another way: by paying into the Renewable Energy Fund in what is known as an “alternative compliance payment.”
Those payments and the interest on the fund make up the entirety of the Renewable Energy Fund, which is administered by the New Hampshire Department of Energy.
Proposed changes
As recommended for passage by the finance committee Oct. 30, the amended HB 219 calls for changes to the overall structure of the Renewable Portfolio Standard program.
One of those changes would diminish the emphasis put on solar in the portfolio by folding the “solar” energy subcategory, which currently stands alone, into the broader “new renewables” subcategory.
The bill would also fix rates for the payments made by utility companies in lieu of purchasing renewable electricity. Currently, the rates change over time and in relation to the cost of renewable energy.
Proponents say this will lower the financial burden on utilities of complying with the Renewable Portfolio Standard, and in turn result in decreased rates for ratepayers.
“Basically, this bill is something that we’re doing to help the high cost of electricity in New Hampshire, to help our ratepayers,” said Rep. Jose Cambrils, a Loudon Republican, at the Finance Committee meeting Oct. 30.
Speakers stressed the high electricity rates paid by New Hampshire consumers. Rep. Daniel Popovici-Muller, a Windham Republican, said he wanted to support the measure because it would reduce costs.
“If other forms of energy were cheaper, I would be more than happy to support them,” he said.
However, others said the changes would carry on a continual weakening of a central part of New Hampshire’s renewable policy.
“If we pass this bill … it will significantly weaken one of the last remaining programs we have to encourage the development of alternative sources of energy that will make us less dependent on the very volatile natural gas market,” said Rep. Chris Muns, a Hampton Democrat.
Paul said the bill as proposed would prevent the fund from bouncing back from the hit it took in the new budget, and have wider effects on the clean energy economy. In the biennial budget passed in June, lawmakers gutted the fund through 2027, sending all but $1 million annually to the General Fund.
“This bill will kill New Hampshire jobs in the long term, it will raise monthly bills for customers, and it … bakes in an incentive to avoid investing in New Hampshire,” he said.
He criticized the fixed rates for alternative compliance payments. Over time, with no inflation indexing, he expects the payments to become cheaper than paying for renewably generated electricity — a difference that could encourage providers to simply pay the fee, rather than pay for actual clean energy. And he also disagreed that lowering penalties would translate naturally into lower rates for customers.
“Cutting the cap on a penalty is not the same as cutting the cost of electricity,” he said.
Folding in solar
The elimination of a standalone solar subcategory was another concern for Paul, who said it would muddy the solar energy market in the short term and have negative effects on renewable energy broadly in the long term.
This is due, in part, to how the electricity from distributed solar generation (meaning, for example, solar panels at a customer’s home) is tallied.
Most larger renewable generators in New Hampshire, and many residential generators, register with the Department of Energy to certify the energy they produce. A registered facility can sell a “renewable energy certificate” for a set amount of electricity they have generated. These certificates, then, are the commodity that electric providers purchase to certify that they have paid for a given amount of renewably generated electricity, and in doing so, certify that they have complied with the Renewable Portfolio Standard.
But not all generators become certified, so not all eligible renewable generators sell renewable energy certificates. This includes many homeowners with solar panels. To account for those homes, the Department of Energy allows electricity providers to count a proportion of the unregistered but net metered generation on their network as a credit toward their annual solar total without purchasing renewable energy certificates from generators.
Folding solar in with other categories would add those previously unaccounted, free “swept” certificates into the market, artificially lowering the price paid for clean energy in New Hampshire, said Clean Energy New Hampshire Executive Director Sam Evans-Brown in an email.
Paul said this might lower the costs of alternative compliance payments in the short-term, but disagreed that this would lead to a long-term reduction in the cost of electricity for ratepayers, as proponents of the bill argue.
Renewable Energy Fund access has narrowed with time
As the ultimate landing place for compliance payments, the Renewable Energy Fund is where financial consequences to changes in the Renewable Portfolio Standard show up first. The fund has supported projects across the state for years, although observers have previously criticized the Department of Energy for, they said, chronically underspending Renewable Energy Fund dollars and accumulating the large surplus that was later targeted in the budget.
Over the course of fiscal year 2025, Renewable Energy Fund dollars were awarded through several programs, including about $1 million across four solar projects that will lower rates for low- and moderate-income communities, $185,006 for residential clean energy rebates, and $486,078 for commercial/industrial renewable energy projects, according to a Nov. 1 report released by the New Hampshire Department of Energy. About $876,000 from the fund is reported as spent on administrative costs during fiscal year 2025. In all, $3,547,368 in Renewable Energy Fund dollars was expended from the fund during that period, while the fund recorded revenues including $4,428,851 in compliance payments and just short of $1 million in interest, according to the report.
Fewer channels to access Renewable Energy Fund dollars are available to residents today than in years past. The residential solar rebate program was eliminated in 2024, leaving only the wood pellet furnace and boiler rebate program available to residential customers.
A grant program also administered through the Renewable Energy Fund, though technically still offered, was also quiet in its most recent cycle. The department issued a “request for proposals” for non-residential grants in October 2024, and received 11 responses requesting a total of $1,600,000, according to the report. However, the department later rescinded the request and did not award funding to any of the projects that had applied.
Chris Ellms, department deputy commissioner, said in an email Nov. 6 that none of the applicants’ projects had scored high enough to “justify moving forward.”
The prior funding year, the Department of Energy funded four projects, disbursing a total of $1,600,000, according to the report. Since 2011, the competitive grant program has funded a total of 56 nonresidential renewable energy projects in the state, disbursing a total of $16,380,154. The first year in which no project was funded was 2024; over the preceding 13 years, the department funded an average of 4.3 projects each year, disbursing an average of $1,260,212 per year.
Another $250,000 from the Renewable Energy Fund was transferred to the Department of Environmental Services, according to the report. The transfer was directed by the state budget, Ellms said.
The shrinking Renewable Energy Fund means less incentive for developers to site renewable projects in New Hampshire, according to Paul, setting New Hampshire up to continue relying on expensive outside sources — like imported natural gas — for electric generation.
The full House will take up HB 219 in the new year, along with other proposals and discussions about whether to cap rates within the Renewable Portfolio Standard or otherwise change the nearly two-decade-old policy.
This story was originally publishd by New Hampshire Bulletin and is being reorinted here under Creative Commons license CC BY-NC-ND 4.0. Click here to visit NH Bulletin and view their other stories.