A bill recently introduced in the New Hampshire House of Representatives seeks to phase out a rule that supports renewable energy.
The state’s renewable portfolio standard (RPS) requires electricity providers such as Eversource or the Community Power Coalition of New Hampshire (CPCNH) to buy a minimum percentage of their total energy from renewable sources. That percentage increases each year, and for 2025 it has reached its maximum rate of 25.2%.
The purpose of the RPS is twofold — to encourage investment in renewable energy sources, thus reducing dependence on toxic fossil fuels, and to allow renewables to reach a scale where they can produce energy more cheaply than non-renewable sources.
The Republican-sponsored bill, HB 219-FN, seeks to phase out the RPS over a five-year period with the goal of lowering the acquisition cost of energy for electricity providers and, presumably, electric bills for consumers. The bill’s authors claim support for renewable energy as part of New Hampshire’s “all of the above” energy policy.
However, the slash-and-burn tactics of the nation’s Republican administration cast reasonable doubt on whether a better option to the RPS will ever happen. The RPS might not be perfect, but it needs to stay in place until there’s a better alternative.
Many states use an RPS to set minimum requirements for electricity providers to purchase energy from renewable sources. New Hampshire’s RPS statute, RSA-362-F, went into effect in 2008 with a 4% renewable energy minimum. The percentage has risen each year but caps at 25.2% for this year and thereafter.
RSA-362-F also defines eligible renewable energy sources, which include hydroelectric, wind, hydrogen, ocean thermal, solar, geothermal and some biomass generators (most commonly the burning of wood pellets). Utilities and other electricity providers must meet the RPS requirements by purchasing renewable energy certificates (RECs) or alternate compliance payments (ACPs).
An REC is an energy market instrument used to buy and sell renewable energy from a renewable energy source. It allows for financial accounting, tracking, and assigning ownership of renewable energy. A single REC represents 1 megawatt-hour (MWh) of energy delivered to the electrical grid. Anyone, including homeowners, may sell RECs that meet this output requirement.
An ACP is a set fee that an energy provider pays when the appropriate RECs are not available. It acts as a cap on the price of renewable energy. Those fees are then placed into the state’s Renewable Energy Fund (REF), which was established with the RPS. The REF funds programs such as residential renewable energy rebates, community solar, and commercial solar and wood pellet rebates.
HB 219-FN aims to reduce RPS requirements by 20% each year through 2030 for each class of renewables. The bill’s authors claim that once the RPS is phased out in 2030, electricity suppliers will save a little more than $34 million in compliance costs.
One of the bill’s sponsors, Rep. Michael Vose (Epping), said that he signed on to “plot a future for RPS,” and noted that “many options are on the table,” including those to reduce the cost to ratepayers “particularly in rapidly maturing markets like wind and solar.”
The bill’s authors acknowledge uncertainty in terms of those cost benefits, however: “the exact fiscal impact is difficult to project due to the fluctuating price and availability of RECs based on market conditions.” The bill bases the savings on the compliance costs (the $34 million mentioned above) for 2023. Considering the billions spent on energy in the state each year, $34 million represents a small savings.
There’s also political motivation behind the bill. At the New Hampshire Energy Symposium held last November, Chris Ellms of the NH Department of Energy expressed concern over the energy policies of other New England states having a negative impact on New Hampshire. HB 219-FN references this in regard to the price of RECs, implying that those policies drive up demand and make RECs more costly.
The state seems to be prioritizing short-term cost savings over climate, health, energy resiliency and long-term stability. The bill does allow electricity providers to offer a 100% renewable energy rate option, which is already available for CPCNH customers. Based on CPCNH data, not enough customers will sign up to compensate for lost REC sales if this bill were to become law.
Large-scale renewable energy facilities cost less to operate and those costs are more predictable than for fossil fuel. Liquefied natural gas (LNG) is the most efficient fossil-fuel form of electricity generation, but solar surpassed it in 2023, according to market research firm Wood Mackenzie.
The gap is expected to widen. The U.S. Energy Information Administration predicts that the cost to produce 1 MWh using solar will decrease from about $30 today to $25 by 2050, while LNG costs will rise from about $35 to more than $40 during that time.
So what’s holding renewable energy back? Lack of investment is one major barrier. Requiring large electricity providers to purchase some renewable energy ensures a ready market, which makes the risk of investing in solar, wind and other renewable energy projects more acceptable for banks and developers.
For this reason, several other New England states have more aggressive RPS programs. The current Connecticut RPS rate, for example, is 30% and will rise to 40% by 2030. That said, the RPS and the REC transaction mechanism are far from perfect.
Energy markets change faster than regulations, and the RPS might well be ready for an overhaul. Eliminating it in the hope that it will all work out in the end, as the Republican bill suggests, is short-sighted. Creating investment incentives for solar, wind, and other renewables, especially if it’s done in a way that makes them cheaper, is something we can all get behind. In the meantime, let’s keep the RPS.
Michael Nadeau is a member of the Peterborough Renewable Energy Project.