6 Energy Cost Factors Every New Hampshire Commercial Real Estate Buyer Should Underwrite

From electricity rates and heating fuels to building codes and lease structures, these six factors can materially affect a commercial property's operating expenses and long-term investment performance.

Updated November 2026

New Hampshire's electricity rates, heating fuel infrastructure and building energy standards all influence the cost of owning and operating commercial real estate. Buyers who focus exclusively on a property's recent utility bills can miss how these factors will affect expenses over a five-, ten- or fifteen-year holding period.

For investors evaluating office, retail, industrial or mixed-use properties, energy costs deserve a closer look during due diligence.

Here are six factors to build into your underwriting.

1. New Hampshire has some of the highest electricity rates in the continental U.S.

New Hampshire consistently ranks among the more expensive states for electricity, creating a meaningful operating expense for commercial properties with substantial electrical loads.

According to the U.S. Energy Information Administration (EIA), New Hampshire's average commercial electricity price was 21.40 cents per kilowatt-hour (kWh) for January through August 2026. That compares with 24.66 cents in Massachusetts, 23.33 cents across New England and 14.04 cents nationally.

In other words, New Hampshire commercial customers paid approximately 52% more than the national average over that period, although less than their counterparts in Massachusetts.

The difference can be significant. At those average rates, a commercial property consuming 200,000 kWh annually would incur approximately $42,800 in electricity costs in New Hampshire, compared with $28,080 at the national average. That is a difference of nearly $14,700 annually, before considering a particular property's rate class, demand characteristics or future price changes.

New Hampshire's high prices are linked in part to the broader New England electricity market, which faces regional natural gas supply constraints, transmission costs and exposure to wholesale energy prices. New Hampshire itself is a net exporter of electricity, but that generation advantage does not insulate its customers from regional pricing.

For an office, retail or industrial building, these expenses may fall on the landlord, the tenant or both, depending on the lease.

Underwriting takeaway: Review at least 24 months of electricity usage and charges, including supply, delivery and demand charges where applicable. Model higher-cost scenarios rather than assuming the latest electric bill will remain representative.

Sources: EIA Commercial Electricity Prices, January–August 2026; EIA New Hampshire Energy Overview.

2. Heating fuel availability can change dramatically by location

Natural gas infrastructure is not equally available throughout New Hampshire. While parts of the state's larger commercial corridors have access to piped natural gas, many properties depend on heating oil, propane, electricity or other systems.

That distinction can materially affect operating expenses.

Natural gas can offer an economic advantage over delivered fuels, although the least expensive option depends on current fuel prices, equipment efficiency, utility tariffs and the building's heating requirements. Propane and heating oil prices can fluctuate substantially, while electric resistance systems may be expensive to operate at New Hampshire electricity rates.

A useful example is the Portsmouth–Rochester–Dover commercial corridor.

Unitil identifies natural gas service areas that include Portsmouth, Newington, Dover, Rochester, Somersworth, Exeter and several surrounding communities. However, being located in one of these municipalities does not guarantee that a particular parcel has access to a gas main.

Unitil provides an address-level gas availability map specifically because service coverage varies within individual communities.

Consider two otherwise comparable commercial buildings in the same municipality. One may already have piped natural gas, while the other relies on propane or oil. Converting the second property could require new equipment, utility infrastructure and a potentially costly service extension, assuming gas is available at all.

For a warehouse, manufacturing facility or older office building with significant heating demand, the difference can influence both annual operating expenses and long-term capital expenditures.

Underwriting takeaway: Confirm the property's actual heating fuel, equipment condition and address-specific gas availability. Obtain historical fuel consumption in gallons, therms or kWh, not just dollar amounts, and normalize the results for weather and occupancy.

Sources: Unitil Natural Gas Service Areas; Unitil Gas Availability Map.

3. Electricity supply rates can reset every six months

A commercial property's electricity bill is not necessarily based on a stable long-term price.

For example, Unitil's New Hampshire default electricity supply pricing for most commercial customers follows six-month periods beginning February 1 and August 1. Larger G1 commercial customers have monthly variable supply rates established for those periods.

That distinction matters because a building's effective electricity cost can change even when consumption stays relatively consistent.

A property that appears inexpensive to operate during one rate period may face higher supply costs during the next. Delivery charges and other tariff components can change separately.

New Hampshire commercial customers may have alternatives to default utility supply, including competitive electricity suppliers and, where available, community power programs.

These alternatives can offer different pricing structures, but they are not automatically cheaper or less risky. Contract duration, fixed versus variable rates, termination provisions and renewal terms all deserve review.

For investors, the key is understanding whether the existing owner has secured favorable supply pricing that will expire during the buyer's holding period.

Underwriting takeaway: Obtain the current electricity supply agreement, identify its expiration date and determine whether the contract transfers to a new owner. Stress-test the property's electricity expense using higher supply rates and review potential demand charges separately.

Sources: Unitil Third-Party Energy Suppliers and Default Pricing; Community Power Coalition of New Hampshire Commercial Rates.

4. Existing buildings may fall well short of today's energy standards

New Hampshire has a mandatory statewide building energy code, but that does not mean every existing commercial building must continually upgrade to the latest efficiency standards.

As of November 2026, New Hampshire's statewide energy code continues to reference the 2018 International Energy Conservation Code (IECC), with state amendments. The Legislature updated several other building codes in 2026 without replacing that energy-code edition.

Energy-code requirements generally apply to new construction and certain alterations, renovations and changes in use. Existing buildings may lawfully retain older components that would not meet current construction standards.

That creates an important due diligence issue.

A commercial building constructed in the 1980s or 1990s may still have aging rooftop HVAC units, inefficient glazing, inadequate insulation, leaky ductwork or outdated lighting systems.

None of those conditions necessarily constitutes a code violation. However, they can create substantial operating expenses or future replacement costs.

A purchaser considering a change in occupancy, building renovation or major HVAC replacement should also determine whether the proposed work will trigger additional code requirements.

For an investor purchasing an older office building, an energy audit can identify improvements that reduce operating costs and potentially increase net operating income (NOI).

It can also reveal significant capital expenditures that would otherwise be overlooked during initial underwriting.

Underwriting takeaway: For older commercial properties, consider an ASHRAE Level II energy audit or comparable engineering assessment. Examine the building envelope, HVAC efficiency, lighting, controls and the likely cost of upgrades required by the buyer's intended use.

Sources: New Hampshire RSA 155-A, State Building Code; U.S. Department of Energy, New Hampshire Energy Code Status.

5. New Hampshire's solar economics differ from Massachusetts

Commercial buyers considering rooftop or ground-mounted solar should be careful about applying assumptions from neighboring Massachusetts.

Massachusetts operates its SMART solar incentive program, including the updated SMART 3.0 framework in 2026. New Hampshire relies on a different combination of net-metering tariffs, utility rules and available incentives.

For typical private commercial solar projects in New Hampshire, net-metering eligibility generally extends to renewable generating systems of up to 1 megawatt (MW). Larger projects between 1 MW and 5 MW may qualify under specific statutory provisions, particularly those involving eligible municipal or political-subdivision group arrangements.

The 5 MW provisions should not be interpreted as blanket eligibility for every private commercial property.

Compensation also depends on system size and the applicable tariff.

For larger systems, generally those above 100 kW, New Hampshire's alternative net-metering structure credits exported electricity primarily through the energy supply component rather than the full retail value of electricity, including all delivery charges.

That difference is critical when calculating the payback period.

Electricity generated and consumed directly by the building can avoid more of the charges associated with purchasing electricity from the grid than electricity exported for net-metering credits.

As a result, a solar installation designed around a building's daytime electricity demand may produce a substantially different financial return than a system that exports most of its generation.

Owners must also evaluate roof condition, available space, interconnection requirements and whether tenants or landlords receive the financial benefit of the generation.

Underwriting takeaway: Model on-site consumption and exported electricity separately. Confirm the applicable net-metering tariff, project-size eligibility, utility interconnection requirements and any available incentives before assigning additional value to a property's solar potential.

Sources: NH RSA 362-A:9, Net Energy Metering; NH Net-Metering Rules, En 900; Massachusetts SMART 3.0 Program.

6. Lease structure determines who ultimately bears the expense

Energy costs affect commercial real estate differently depending on how the property's leases allocate responsibility.

Under a full-service gross lease, the landlord generally pays building operating expenses from the rent collected, subject to any negotiated expense adjustments or escalation provisions.

Under a triple net (NNN) lease, tenants generally pay or reimburse property taxes, insurance and operating expenses, often including utilities and common-area energy costs.

Modified gross leases fall somewhere between these structures, with responsibilities negotiated between the parties.

These distinctions are particularly relevant in New Hampshire.

Colliers' midyear 2026 New Hampshire market research reported average office asking rents of $22.22 per square foot on a modified gross basis, compared with industrial asking rents of $11.92 per square foot on an NNN basis.

Those reporting conventions reflect a meaningful distinction between the two property types, although individual leases can vary considerably.

For an office landlord with full-service or modified gross leases, rising heating and electricity costs may reduce NOI if reimbursement provisions do not fully recover the increases.

In an industrial NNN property, the tenant may bear more of the direct expense. However, unusually high occupancy costs can still hurt the investment through reduced tenant profitability, weaker renewal prospects or pressure for rent concessions.

Landlords should also distinguish separately metered tenant utilities from shared costs that must be allocated through common-area maintenance or operating expense reconciliations.

Underwriting takeaway: Review every lease's utility provisions, expense caps, base-year calculations, reimbursement exclusions and metering arrangements. Determine which expenses are truly recoverable rather than relying on the lease's description as gross, modified gross or NNN.

Source: Colliers, New Hampshire Office & Industrial Markets, Midyear 2026.

Building these energy factors into a commercial real estate offer

None of these factors is a reason to avoid New Hampshire commercial real estate. They are reasons to examine a property's operating expenses more carefully before establishing a purchase price.

A thorough underwriting process should include:

• Electricity: Review historical usage, current supply pricing, delivery charges and contract expiration dates.
• Heating: Confirm the fuel source, equipment age, historical consumption and availability of alternatives.
• Rate exposure: Model changes in electricity and heating fuel prices over the anticipated holding period.
• Building efficiency: Evaluate insulation, windows, HVAC systems, controls and deferred capital improvements.
• Solar potential: Review system economics using New Hampshire-specific tariffs, incentives and interconnection requirements.
• Lease recoveries: Determine exactly how utility costs are allocated between the landlord and tenants.

Even relatively modest energy expense adjustments can affect property value.

For example, an additional $10,000 in annual operating expenses that cannot be recovered from tenants would reduce NOI by the same amount. At a hypothetical 7% capitalization rate, that reduction represents approximately $143,000 in property value, assuming the change is recurring and all other valuation factors remain constant.

This is why energy due diligence belongs in the acquisition process, not just in post-closing property management.

Buyers who understand a building's utility infrastructure, energy efficiency and lease structure are better positioned to forecast operating costs, identify capital needs and negotiate a purchase price that reflects the property's actual performance.

Local knowledge can be particularly valuable. Utility service territories, gas infrastructure and the age and condition of commercial building stock can vary considerably across New Hampshire.

Explore New Hampshire commercial real estate opportunities on NECPE and connect with a local member broker to better understand the operating costs, infrastructure and investment considerations affecting a particular property.

Information reflects sources available as of November 2026. Utility rates, net-metering tariffs, incentives and building requirements are subject to change. Property-specific legal, engineering and financial due diligence is recommended.