A New Hampshire program that provides financial incentives to homeowners for installing solar- or wind-power generating systems may be a victim of its own success. Public officials are taking steps to prevent its demise.

The state’s Public Utilities Commission (PUC) recently held a public hearing on a proposal to reduce the incentive payments by half. The proposal is intended to keep the program afloat and create a more equitable distribution of payments between residential and nonresidential installations.
Two years ago, the state legislature created the Residential Renewable Energy Generation Incentive Program. Administered by the state PUC, it provides one-time incentive payments to residential owners of small photovoltaic or wind-generating facilities to help offset their installation costs.
Incentives are paid at a rate of $3 per watt of generation capacity, up to a maximum payment of $6,000 or 50 percent of the system’s costs, whichever is less. The payments are funded through the Renewable Energy Fund, which is supported by alternative compliance payments made by electric service providers who cannot meet their renewable portfolio standard obligations through the purchase of renewable energy certificates.

The homeover incentive program has been such a success that it may run out of funds in less than a year. The PUC reports, that, as of July 2010, approximately $2 million in incentives have been paid out or reserved. This is slightly less than half of the $5.78 million in total revenue that has been paid into the program in the last two years. Factoring in other payments and administrative costs, the PUC estimates only $1.5 million in uncommitted funds remain in the fund. At the current rate of applications and payments, this could be depleted by the end of the 2011 fiscal year.
Recognizing the perils facing the program because of its own popularity, the state legislature took action. During the 2010 legislative session, it approved HB 1270, which authorizes the PUC to reduce the incentives and to balance the overall payments between residential and nonresidential applications.

Acting on that authority, the PUC held a public hearing on Sept. 1, 2010, to hear public comment on its proposal to cut the incentive payments in half. If approved, residential applicants would receive an incentive payment of only $1.50 per watt and a maximum of only $3,000 per system. The PUC asserts that by lowering the payments and per-system maximum, it will help spread existing funds across the same number of applicants without disrupting business for installers.