NCPA - National Center for Policy Analysis

The Disadvantage of RPS Outweigh the Benefits

March 20, 2015

The Beacon Hill Institute at Suffolk University (BHI) applied its State Tax Analysis Modeling Program (STAMP) model to estimate the economic effects of the New Hampshire Renewable Portfolio Standards (RPS).

The major findings show:

  • The current RPS mandates will raise the cost of electricity by $70 million for the state's electricity consumers in 2025.
  • New Hampshire's electricity prices are expected to rise by 3.7 percent by 2025, due to the RPS law.

These increased energy prices will likely hurt New Hampshire's residents and businesses and, in turn, inflict harm on the state economy. In 2025, the RPS is expected to:

  • Lower employment by an expected 720 jobs;
  • Reduce real disposable income by $70 million;
  • Decrease investment by $10 million;
  • And increase the average household electricity bill by $40 per year; commercial businesses by an expected $230 per year; and industrial businesses by an expected $3,655 per year.

Since electricity demand is flat, the RPS-mandated renewable sources will force utilities to retire existing coal and gas sources. Displacing coal and gas with solar and wind will lower the amount of dispatchable electricity generation under baseload conditions and force utilities to use peak electricity generation sources when wind and solar are not available.

Additionally, the way the law was written, by 2025 the state will require 9.5 percent of electricity to come from sources, which began generation prior to 2006, or to pay a compliance fee. Under a baseline scenario, most of this will be met with compliance payments, meaning that this share of the policy will contribute nothing to requiring cleaner sources of electricity, but will increase the cost of electricity that every individual and company will consume.

The RPS policy will not have an impact on reducing global emissions, but rather send jobs and capital investment outside the state.

Source: Paul Bachman, Michael Head, "The Economic Impact of New Hampshire's Renewable Portfolio standard," The Beacon Hill Institute At Suffolk University, February 2015.


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