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New Hampshire’s new state budget redirects an estimated $15 million from a dedicated renewable energy fund into the general fund, likely signaling the end of plans to expand a popular pilot supporting municipal solar developments.
While some New England states have moved to strengthen clean energy policy in the face of President Donald Trump’s efforts to quash renewable power development, New Hampshire has taken a different path: The provisions of the latest budget leave just $1 million in the renewable energy fund each year for programs that, in fiscal year 2024, cost more than $5 million to administer.
“This is a big step backward for renewable energy in the state. There’s going to be very little left over,” said Nick Krakoff, senior attorney in New Hampshire for the Conservation Law Foundation. “That means there would be basically nothing left for this municipal program.”
The renewable energy fund, established in 2007, receives money from electric service providers that are unable to meet their obligations to source a certain level of renewable power each year. Most years, the fund takes in anywhere from $2 million to $8 million. The money has traditionally supported a handful of renewable energy incentives, and revenues have generally exceeded spending. At the beginning of fiscal year 2024, the fund had a balance of nearly $15.3 million.
Earlier this year, the state energy department started laying out plans to use some of this money to support solar projects developed by municipal governments. Such developments have both financial and environmental benefits, saving money for towns — and thus taxpayers — while cutting greenhouse gas emissions from electricity generation in a region that relies heavily on natural gas to fuel its power plants.
Still, municipal solar projects can be a hard sell for voters in New Hampshire, a state with a reputation for frugality. The state has no sales tax or income tax, so government operations are funded mainly by hefty property taxes. It is also home to many small towns with constrained budgets. Though solar installations can save a town money, voters are generally reluctant to approve the upfront cost, which could increase their property taxes.
“The reality for New Hampshire residents is that municipal budgets are very, very, very tight, and property taxes keep going up,” said Sarah Brock, director of the nonprofit Clean Energy New Hampshire’s Energy Circuit Rider program, which helps towns develop clean energy and energy efficiency projects. “Every year at town meeting, there’s a pretty substantial reluctance to approve money for just about anything.”
In 2024, the state launched the Municipal Solar Grant Program to help towns overcome those hurdles and install solar panels on municipal property. The pilot program has a specific focus on small or economically disadvantaged towns that would have a harder time funding such projects on their own. The initiative uses $1.6 million in funding that the state received through the federal Bipartisan Infrastructure Law, passed in 2021.
Thirty towns applied for the funding through the pilot; 16 were selected to receive grants between $45,000 and $200,000. Staff with the Energy Circuit Riders program identified perhaps 20 more towns that might also be interested in future funding opportunities.
“We had over 50 towns in our active project pipeline that would want to go after this funding,” Brock said. “We know the demand is there.”
The plan was to follow up with a permanent program paid for by the renewable energy fund. In the spring, the state energy department asked for comments on the proposed program and ideas about how to modify the approach used in the pilot.
The annexation of the renewable energy fund, however, could put an end to these plans, advocates said. With only $1 million available each year, there would not be enough money available to continue existing offerings like its nonresidential competitive grant program and rebates for wood pellet stoves at current levels. Adding an entirely new initiative may be a nonstarter.
“No one is telling us the program is dead, but it is possible that it will be impossible to run if there isn’t funding for it,” Brock said.
Neither the office of Gov. Kelly Ayotte nor the state energy department responded to requests for comment about the future of the program.
The first project completed under the pilot was a 26-kilowatt solar array atop the town hall in Kensington, New Hampshire, in the southeastern corner of the state and home to about 2,000 people. Kensington has an annual budget of just $2.6 million, so voters were unlikely to approve a nearly $100,000 investment, even if it promised savings in the long run, said Zeke Schmois, chair of the town’s energy committee. So the local solar boosters turned to the state.
The town received about $92,000 for the project. The final panels went up in early July, making Kensington the first place to complete an installation as part of the grant program.
“This isn’t a solar farm, but it’s huge for a town like ours with such a small budget and such a small population,” Schmois said.
Kensington expects the installation to offset about 70% of the town hall’s annual electricity use, Schmois said. But those savings are just the beginning of the impact: The town historical commission was involved with the approval process and realized that modern solar panels can blend inconspicuously with roofing. The group is now eager to collaborate on future solar projects, Schmois said.
Other towns hope for similar benefits. Dublin, New Hampshire, received a grant of about $43,000 for a solar array that should meet all the town fire station’s power needs once it is installed later this summer, said Susan Peters, the chair of Dublin’s select board and founding member of its energy committee. She hopes the installation’s location along a major state highway will help normalize the idea of solar, and help build support for another project under consideration: a ground-mounted array near a capped landfill.
“The fact that we’re doing this project strengthens people’s interest,” she said.
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