NH revises, reopens C&I solar rebate program

New Hampshire utility regulators have reopened a program offering a rebate to commercial and industrial electric customers who undertake qualifying solar energy projects, while reducing the size of the incentive and changing other program terms.

To encourage commercial and industrial (C&I) customers to participate in solar photovoltaic and solar thermal energy projects, the New Hampshire Public Utilities Commission first approved a solar rebate program in 2010. That program disburses funds from the state's Renewable Energy Fund to customers in exchange for customers' development of qualifying solar projects.

Terms and conditions for New Hampshire's C&I solar rebate program have varied since 2010, and the amounts of rebates available under the program have generally decreased over time. In 2015, the Commission created two separate categories of eligible projects with different rebate rates: Category 1, consisting of solar electric and thermal systems rated less than or equal to 100 kilowatts (AC) or thermal equivalent, and Category 2 consisting of solar electric systems greater than 100 kilowatts (AC) but less than or equal to 500 kilowatts (AC).

A 2016 Commission order set program rebate levels at $0.65 per watt (AC) for Category 1 new electric projects, and $0.55 per watt (AC), but not in excess of $175,000, for Category 2 new electric projects, in each case subject to a limit of 25 percent of the total project cost if less than the incentive payment otherwise calculated.

But the program closed to new applications as of July 14, 2017, due to "record demand" and a lack of funds. Even the allocation of additional funds only reopened the program for waitlisted applications, while keeping it closed to new applicants.

On February 13, 2018, Commission staff recommended reopening the program, while modifying it to further reduce the applicable incentive levels and to consolidate Category 1 and 2 projects into a single program that would allow applications for projects with capacities up to and including 500 kW AC.

On March 8, 2018, the Commission issued its Order No. 26,111, modifying the solar rebate program's terms and reopening the program. The changes include reduction in the amount of the rebate to $0.40 per watt up to a maximum of $50,000, or 25 percent of total project cost, whichever is less; and consolidation of Category 1 and 2 photovoltaic projects into a single program that would allow applications for projects with capacities up to and including 500 kilowatts AC. No change was made to the program terms and conditions applicable to solar thermal projects.

Under the order, the modified program terms and conditions became effective on March 19, 2018, and the program was reopened as of that date. The Commission noted that in anticipation of "robust demand for and potential oversubscription of the reopened program," it will conduct a public lottery in April to allocate initial queue positions for applications.

Will clustering help New England's interconnection queue?

Faced with a persistent backlog of requests to interconnect to the electric grid across parts of New England, will the region's major grid operator adopt a "clustering" methodology to streamline the study process and reduce procedural delays?

At issue are ISO New England's interconnection procedures, which govern the process through which generators and transmission lines may interconnect to the New England bulk power system.  For nearly all large projects and some smaller ones, ISO-NE administers the process and conducts extensive engineering studies to determine whether such interconnections would be feasible without adversely affecting reliability and how they should be accomplished.  In general, ISO-NE uses a first-come, first-served basis: a project's impacts on the grid are studied in sequential order based on that project's position in the interconnection queue.  In practice, this means that a project's studies do not commence until the studies for projects ahead in line are complete.

According to ISO-NE, this system has worked well for most of the region.  Excluding northern and western Maine, the grid operator reports that on average, system impact studies are completed within a year of the customer's interconnection request.  But ISO-NE notes that its "Interconnection Queue has experienced a persistent backlog of requests to interconnect in northern & western Maine."  Many of these requests relate to wind projects located relatively far from the transmission system, but similar challenges could arise relating to large solar projects in parts of Maine, Vermont, or New Hampshire.

The grid operator may be able to address this backlog by changing its interconnection procedures to be more in line those adopted in other regions, by allowing "clustering" or pooled and simultaneous study of certain resources. As described by ISO-NE in a presentation delivered last year, all of the other Independent System Operators or Regional Transmission Organizations -- such as NYISO, PJM, MISO, CAISO, and SPP - include some form of clustering in the interconnection process; New England stakeholders have requested that ISO-NE investigate clustering; and the Federal Energy Regulatory Commission has also addressed clustering, including in a May 2016 technical conference.

ISO-NE's proposed clustering methodology would allow, under specific circumstances, for two or more Interconnection Requests to be analyzed in the same System Impact Study (SIS) effort.  Projects participating in a cluster would share cost responsibility for certain shared interconnection related transmission upgrades, known as Cluster Enabling Transmission Upgrades (CETU), identified by ISO-NE as necessary for the applicable interconnection requests to interconnect.

As noted in an April 2017 presentation to the NEPOOL Participants Committee, this proposal was favorably voted by the Transmission Committee on January 24, 2017 and by the Participants Committee on February 3, 2017.

The presumptive next step forward in New England's attempt to resolve the interconnection queue backlog by clustering studies would be that ISO-NE will file its tariff revisions with the FERC -- but the grid operator has signaled an intent to wait to file the revisions until there is "a high probability of a FERC quorum."  Three of the five seats on the Commission are presently vacant, and the Commission is currently operating without a quorum.  In the meanwhile, ISO New England's present tariff does not allow clustering of studies, so for now customers and others proposing to interconnect generation or transmission into the New England grid will continue to wait and push for reform.