Solar panels are pictured on April 5, 2023, at the Keene wastewater treatment facility in Swanzey, NH. (Photo by Raquel C. Zaldívar, New England News Collaborative)
Towns across New Hampshire are facing uncertainty around planned solar energy projects, as a $1.6 million dollar grant program experiences ongoing delays.
The delays are frustrating efforts to hire contractors and construct local solar projects, with some towns worrying they won’t be able to finish building them within the year. That could put tax credits some are relying on to fund the project in jeopardy, according to clean energy advocates.
The state’s Department of Energy, which is facilitating the federal grant funding for these projects, has not responded to multiple questions from NH Public Radio (NHPR) over the past several weeks about grant programs they run.
In response to a right-to-know request, the agency shared emails with NHPR that show Department of Energy employees informing recipients that the municipal solar grant program may be impacted because it includes elements of “Justice40,” the Biden Administration’s environmental justice program. But, state officials said they believed the impact on grants would be minimal.
Hinsdale is one of 16 communities waiting on more information from the state’s Department of Energy to move forward. They were planning to use the money to build solar panels near a capped landfill that would provide power for the transfer station.
Josh Green, the town’s community development coordinator, was surprised but excited when Hinsdale got the grant. He hopes the new solar panels will help the town have some energy independence, reducing the cost of electricity and the town’s reliance on fossil fuels.
“My dream is to have all the municipal buildings on solar,” he said.
But his hopes are on hold. A kickoff meeting in January was pushed back. The Trump Administration’s moves to freeze federal grants associated with Biden-era climate laws caused concern.
“Everybody was just in a total panic, didn’t know what was going to happen,” Green said. “I was not hearing anything from the New Hampshire (Department of Energy), they were very quiet.”
The kickoff meeting still has not happened, Green said.
Though he’s gotten some reassurance that the grant program is moving forward, the town is still waiting for state officials to finalize contracts with specialists to help facilitate the grants. In the mean-time, Green said state officials haven’t been clear on whether towns should enter into contracts with solar construction companies or not.
“It just left us, you know, hands in the air. We just didn’t know what to do,” he said. “So we just keep waiting.”
In a letter to Gov. Kelly Ayotte, Green said residents are starting to wonder if the project will happen at all. He’s worried about getting the project up and running before next winter, especially with potential changes to projected costs.
“Every delay adds another layer of complexity to an already intricate process, and it’s becoming increasingly difficult to reassure the community that the project will be completed as planned,” he wrote.
‘Incredibly unpredictable’
For the town of Dalton, delays have been somewhat welcome. Town Administrator Jeanette Charon said the timeline has worked in their favor, allowing for more time to present the project at town meeting.
But for others, the uncertainty is taking a toll.
In Lebanon, senior planner Rebecca Owens wants to use a municipal solar grant towards a solar array on top of the city’s new fire station. If the city isn’t able to enter into an agreement by June, ordering solar panels and moving forward with the project could become difficult, she said.
“If this grant doesn’t proceed, we’ll be short on our funding, because we didn’t ask for enough in the bond,” she said. “It’s a really challenging position to be in for a community like ours.”
Federal grants have been difficult across the board, recently. Lebanon’s Urban Street Tree program was paused, and Owens said the team working on the project may miss this spring’s planting season.
“The dynamic is incredibly unpredictable across the board of those funded programs,” she said.
Owens said the NH Department of Energy has been helpful and communicative. But confusion at the federal level is trickling down into many parts of her community.
“We feel bad we can’t continue to support vendors, and that affects business and economic well-being in our state and locally. More broadly, it just feels really inefficient,” she said. “It’s a real lost investment from our time and resources that we won’t be able to recover unless these programs are allowed to proceed.”
Owens said she’s not sure that the projects would move forward if the grants don’t come through.
Access to tax credits
Sarah Brock, who runs Clean Energy New Hampshire’s energy circuit rider program, has provided assistance to towns across the state on solar projects. She said one of her main concerns about the delay is that towns may miss a window to access “direct pay” tax credits, a way for entities without much tax liability, like towns, to get tax credits for clean energy.
Not all the towns that were awarded solar grants are planning to use direct pay to finance their systems, but several communities are banking on it.
“The challenge being that now, given the priorities of the incoming administration at the federal level, we don’t know what the future of direct pay will be,” Brock said.
Brock said legal experts have told Clean Energy New Hampshire that projects completed within 2025 should still be eligible for direct pay, but beyond the current year it’s unclear what will happen to that program. That means time is of the essence when it comes to construction, Brock said.
“It’s frustrating that all of the confusion at the federal level is trickling down to these little towns that just want to build a solar array, and they don’t know when they’re allowed to put a shovel in the ground,” she said.
Tom Pfau, a co-chair of the Rye Energy Committee, said his town is counting on a 30% tax incentive to make their projects work. Rye got two grants: one for solar panels on their public safety building, and one for an array on their recreational department.
“If something happens to that provision then we’ll have to rethink this whole thing. So that makes everything very uncertain,” he said.
But, Pfau said, he thinks state energy officials are doing the best they can.
“I don’t think there’s a lot to say other than, ‘Let’s wait and see,’” he said.
The deadline to complete solar projects within the grant program is December 30, 2026, but energy officials have said extensions may be granted.
State officials wrote on a webpage that they’re awaiting the completion of contracts for two positions — a technical monitor and a Davis-Bacon specialist — to support the municipal projects, which are set to be approved in April or May.
Records on the agency’s website shows they received proposals for those positions in September and November 2024.
Brock said there may be more that state officials can do to move the program forward.
“My hope is that everyone from the head of the (Department of Energy) to the staff of the (Department of Energy) to the governor are all lining up behind these towns and saying, ‘we want these projects to be built, we’re going to make sure that that happens as best as we can, even though it’s challenging right now,’” she said. “I hope that’s the case.”
This article is being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.
