Chinese-Owned NH Solar Project Costs Ratepayers $1.22M

New Hampshire utility ratepayers will pay a Taiwanese company $1.22 million to build the state???s largest solar installation so that a small town can save about $500,000 in power costs over the life of the project.

Taiwan???s Walsin Lihwa, parent company of Borrego Solar, will use Chinese-made solar panels in the 3.5-acre project, which is supposed to be finished in July. It will supply power to several municipal buildings in the area but only some of the time: the town of Peterborough (population: 6,284) gets only 197 sunny days per year.

???What a great project,??? deadpanned David Kreutzer, a senior fellow with the Heritage Foundation. ???A $1.2 million grant allows Peterborough to save $500,000! And that doesn???t include the cross-subsidies of net metering.??? Net metering requires all other ratepayers to cover the fixed costs of electricity distribution so that solar users have a safety net when the sun doesn???t shine.

In an unusual feature of the deal, Borrego Solar will retain ownership of the system. That allows the company to claim a 30 percent federal tax credit ??? along with $55,000 in yearly renewable energy credits paid for by local ratepayers.

As for the rest of year, Peterborough will have to buy electricity from conventional sources.

???I???m all for renewable energy, however in the case of this project it looks like others are subsidizing this so it can have a return,??? said state House Majority Leader Jack B. Flanagan, a Republican. ???Even with the investment, the return is not going to happen for 30 years.???

Because of increasing power rates, Flanagan said he???d rather use project funds toward customer rebates.

From the perspective of Peterborough officials, the solar project is a great deal because none of the cost is coming from local coffers and it generates jobs.

???It???s added a tremendous impetus to the solar industry in New Hampshire,??? said Rodney Bartlett, Peterborough???s director of public works. ???When we started it, we had a handful of solar installers. Now we have projects waiting.???

Elon Musk???s California-based SolarCity, which relies heavily on government subsidies, is part of the remarkable rush. SolarCity set up shop in April.

New Hampshire ??? like the rest of New England ??? has gone solar crazy during the past several years, partly in response to rising utility rates. Abundant rural landscape to support solar farms, a desire for alternative energy and the traditional support of Democratic lawmakers have opened the door to projects funded by government grants and tax breaks.

This past winter was especially harsh, and New Hampshire residents saw their electric bills double. As the weather warmed, the New Hampshire Public Utilities Commission rolled back rates May 1.

It???s against this backdrop that a solar farm in tiny Peterborough began to look pretty good to some.

The contract was signed in 2014 by the Democrat-controlled Executive Council, an administrative arm of the governor???s office.

The terms include: a $1.22 million grant from the state PUC paid to Borrego; an additional $1.4 million in cost will be funded by Walsin Lihwa; Borrego will operate the facility, on a former lagoon; Walsin Liwha will pay Peterborough $1 a year to lease the land during the 20-year agreement; and the power will run a nearby wastewater facility and three other municipal buildings.

Borrego in essence becomes the utility and will sell electricity to Peterborough at 8 cents per kilowatt, compared to the 14 cents it pays now.

The agreement estimates the plant will produce about 1 megawatt of electricity.

???Spending $2.6 million for a 1-megawatt system is equivalent to spending $1.3 billion for a 500-megawatt power plant,??? said William Yeatman, a senior fellow with the Competitive Enterprise Institute. That???s about three times higher than ???the typical coal power plant outfitted with all the latest technology. The only reason this is viable is due to subsidies ??? taxpayer and ratepayer,??? he said.

Regarding the use of Chinese-made panels and a system owned by a Taiwanese company, Bartlett says it???s no big deal.

The panels are superior to anything else found in the U.S., and ???it???s not unique in the U.S. that something is owned by the Chinese or another country.???

Publicity surrounding the project has been overwhelmingly supportive, highlighting cost savings ??? almost always without addressing the cost of subsidies. The solar energy website Solar Novus Today summed up the sentiments of supporters saying the project is good for taxpayers because ???it won???t cost them a dime. The PUC grant will fund a portion, with Borrego Solar funding the rest through investors??? dollars.???

Flanagan disagreed.

???The net benefit is not all that great,??? he said. ???It all goes back to fossil fuels. The people who support this stuff don???t want to burn fossil fuels.???

This post was originally posted on Watchdog.