Vermont Legislature SmartTranscripts:

[Rep. Bram Kleppner (Member)]: We're live.

[Rep. Kathleen James (Chair)]: Alright. Welcome everybody to House Energy and Digital Infrastructure. It is the February 12 and we're continuing to take testimony on h seven sixteen, which is an act relating to net metering. I'm representative Kathleen James from Manchester.

[Rep. R. Scott Campbell (Vice Chair)]: Scott Campbell from Saint Johnsbury, Anchor. Chris Morrow, Windham, Windsor, Bennington. Michael Southworth, California too. Christopher Howland, Rutland four.

[Rep. Kathleen James (Chair)]: Dara Torre, Washington two.

[Rep. Laura Sibilia (Ranking Member)]: Laura Sibilia, Windham two.

[Rep. Kathleen James (Chair)]: Great. And with us in the room

[Sylvia MacKinnon (Chamber of Commerce)]: Sylvia MacKinnon, chamber of commerce.

[Dana Lee Perry (The Nebraska Group)]: Dana Lee Perry with the Nebraska Group.

[Jonathan Katz (Renewable energy provider)]: Jonathan Katz, renewable energy provider.

[Rep. Kathleen James (Chair)]: Great. Alright. For the record.

[Rep. R. Scott Campbell (Vice Chair)]: Thank

[Mike McCarthy (President, SunCommon)]: Thank you, madam chair. Members of committee, I'm Mike McCarthy. I am the president of Sun Common. So Sun Common is a Vermont based solar and energy storage installer. We we do both residential and commercial projects here in Vermont and in New York's Hudson Valley. And I've been at Sun Common since 2013, and I'm very glad to be with you all today. I'm here today to speak in support of h seven one six. I this would end the tax on behind the meter consumption of the solar that's produced by the monitors. The OBB BA, the one big beautiful bill acts that passed last year, it had a very large impact on the value of solar that is produced by Vermont homeowners and businesses, and it's also had a very big impact on the renewable energy industry and the professionals that I work with in the state of Vermont. 8716 would be a welcome support for the kind of behavior that we wanna encourage Vermonters, to have when they're producing energy. The energy that we find very valuable, when it's produced on-site, and consuming more of that energy or storing it when it's needed most. Vermoders have been going solar for years. I'm sure you've talked about that a lot in your committee. Increasingly, we're seeing them pair that solar with battery storage. So there there's a new dynamic happening now, and the value of battery storage has really gone up. It's uncommon. We've got more than 50 Vermont employees. We have hundreds of colleagues who work to install these renewable energy systems. And, with our other colleagues around the state, there are hundreds, if not thousands, of folks that are in this business. I myself am a solar homeowner. I know some of you are on the committee. And the 30% federal tax credit that helped to make these systems really affordable for the past decade plus was eliminated last year. And and now the value proposition for residential solar in Vermont is a much tougher sell for folks that are in the residential solar business. Green jobs and solar and energy storage and other renewables are really at stake because of the equipment restrictions and the rapid tax credit phase out in the One Big Beautiful Bill Act. Businesses like Sun Common reduced our project forecast for 2026 when that bill passed into law. We paused hiring. We've gotten creative about how to continue to offer energy projects, and those look very different than they would have otherwise. Our state does need more solar to offset the shift to electric vehicles, heating and cooling, and other electrification that is essential to hitting our statutory energy goals. Comparing solar with battery storage is good for homeowners and it's good for the grid in many cases. When I was last, before your committee in October, that seemed like a long time ago.

[Rep. Kathleen James (Chair)]: It does.

[Mike McCarthy (President, SunCommon)]: I shared these numbers with you, so I wanted to ground my comments now and some of the history briefly. And as I shared with you, the value of solar in Vermont has been on the decline since 2017, especially for residential projects. The value of the solar investment tax credit combined with the value per unit of power that Vermonters get as credit when they produce solar at their home. It used to be that it was tagged to a specific rate. And back in 2016, it was as high as 22¢ a kilowatt hour, and the net effect of the biannual rate reviews and the negative adder over the years has brought that value down to about 14 and a half cents for most Vermonters today when they're exporting. As the biannual rate view is coming up again, and I would say we'll talk about h seven one six for the rest of my comments. But I would say that regardless of whether you move forward with h seven one six or something like it, I think me and my colleagues would all strongly urge you to prevent any further decrease in the value of net metered solar on twenty six's biannual rate review. I I think that would be kinda like kicking up over down. Is an example of kinda where we are before and after January 1 in terms of the kinda ROI you'd see on a typical residential solar project. This is something like a 10 kilowatt array that costs about $34,000, to install, and it would have gotten a $10,200 tax credit, as of December 31. To that kind of system would produce about 1,600 per year in credits and with the statewide blended rate around 19¢, and then you have the 4¢ adder. For most customers, it's a little below 15¢ right now that their kind of net value is worth. And that delivered about a fourteen year simple payback. And a lot of people in Vermont were going solar with this kind of a payback. We can get long term financing. We also have ways to make the projects less expensive than this, where we try to bring that ROI down for folks

[Rep. Christopher Howland (Member)]: and add value. And bless you. That's okay.

[Mike McCarthy (President, SunCommon)]: And after the removal, those numbers you'll see in the right hand column from HR one, became the big beautiful bill act, you're seeing more like a twenty point six year payback. So the economics at today's kind of rates really don't make sense for solar by itself unless we are able to really bring these these costs down. We are trying to be very creative about that and still maintain a business model. There are a small number of Vermonters who are going solar, you know, purely for their the philosophical and environmental motivations. But for it to work out financially right now is very challenging for the vast majority of solar customers that are interested in looking at the economics today. So given all this context, I'm really excited about the discussion around h seven one six. This bill would end the tax on the energy that promoters produce when they use it on-site. So the idea, I think, in this bill is that the power that you export would still have be exposed to the negative adders that are applied today, but that if you're consuming power on-site, you wouldn't have to reduce the one to one value. It's long been a frustration for many Vermonters, especially those of us in the renewable industry that even if you use a kilowatt hour behind the meter meter that you generate yourself, you still get the 4¢ reduction as it passes through your separate production gear. And in the negative adder, it'd have several benefits, and so I've summarized those in these four points. One is that, you know, the economics that I just showed you. It would make invest it would make investing in solar more valuable for Vermonters. So we could reduce that payback a little bit. It would help make up for the loss of the federal tax credit. It would also, I think, incentivize people to consume more of the power that they use behind the meter and and store it. So we have other policies right now and support for things like virtual power plant programs, which I'm sure you're familiar with, that are really helping our industry move into storage, and we're a leading storage provider. It's uncommon, but pairing that with photovoltaics is a big part of how we're able to offer those programs and be a partner to the utilities that are doing this.

[Rep. Laura Sibilia (Ranking Member)]: Sorry, could you talk a little

[Rep. Kathleen James (Chair)]: bit more about I understand how it would incentivize storage. Can you talk a little bit more about behind the like, what can I do to increase my behind the meter consumption? I'm I'm a little unclear on what that actually looks like.

[Mike McCarthy (President, SunCommon)]: The way I would think about that is more that it would encourage people to kind of right size their solar or charge up when their solar or or time their loads, like, their electric vehicle or hot water usage with when their solar is Producing. Is producing. And there's great technology now where you can program even if there isn't a time of use rate that's being, you know, set up by the utility, you can do that yourself pretty easily now in terms of, you know, programming your car to only charge at certain times.

[Rep. Kathleen James (Chair)]: Interesting. Okay.

[Mike McCarthy (President, SunCommon)]: So, yeah, I would say it's sort of that consumer behavior around the when your your loads are drawing, timing that with when you're it's gonna be sunny and your solar's producing. And also, when you're when when one of the salespeople that I work with is in the home or doing virtual visit with a customer and they're looking at their utility bills, they can dial in the economics to make sure that they're gonna consume most of what they produce or store it in a battery as opposed to sizing oversizing the system just for export. Okay. Interesting. One of the things that that may be a surprise to you all is that we are one of the last states that still most of the utilities have a separate production meter. So your solar has its own meter, and then that power passes through to either your loads that you're consuming on-site or it goes through your bidirectional main meter, the the normal meter, and either and flows out on the grid or is drawing power down to the grid.

[Rep. Christopher Howland (Member)]: So that

[Mike McCarthy (President, SunCommon)]: extra meter, that extra step, it requires an extra visit from the utility to set that meter. It's also a separate account that the utility has to maintain. And if we got rid of the really, only purpose it serves now is to tax the negative adder on every kilowatt kilowatt hour that's consumed. So if we just like most other states and, you know, I work in other states as well, they mostly do one to one. So you the power flows out, the power flows in, and you essentially are just saving whatever you're, consuming on-site at the rate that you would get compensated for consuming it, you wouldn't need the solar production meter if we did something like h seven one six for future projects. The other thing here is kind of a matter of fairness. So we don't assess a fee when people reduce their net power consumption by using less power. So if you go out and buy energy efficient appliances, it's not like you need to compensate the utility back for that or you lose some value from that efficiency because you've reduced your load. So it's strange to me just as a matter of fairness that we reduce the value of the consumption artificially when people are doing what we want them to do and actually using the power where it's most valuable right on-site, where it doesn't need to be transmitted.

[Rep. R. Scott Campbell (Vice Chair)]: I I ask a question about that. I just realized that you were saying this that if if we didn't have the separate solar meter, solar production meter, and we were just the utility was just seeing the basically, the net usage and net usage from the grid to the house, then then we wouldn't have a separate adder or or deductor for for for the solar power. Right? Because there wouldn't be any way of doing that. You would for export.

[Mike McCarthy (President, SunCommon)]: Yeah. So you would for the export.

[Rep. R. Scott Campbell (Vice Chair)]: Because of the So they can measure that.

[Mike McCarthy (President, SunCommon)]: Yes. Yeah. So when I go on my Green Mountain Power account, for instance, I can see what my solar produced, which Yeah. Data is coming from the production meter, that separate meter. I can see my net consumption, and I can see the net export. And that net export number isn't coming from the solar production meter. It's just coming from the regular bidirectional meters. So bidirectional meter is measuring both directions. Yes. Exactly. So you

[Rep. R. Scott Campbell (Vice Chair)]: wouldn't true even for older meters, like maybe units of the units of each of these would have, or does it have to be

[Mike McCarthy (President, SunCommon)]: an advanced meter? I I don't know the answer to that question, but I believe it would have to a smart meter in order to

[Rep. Christopher Howland (Member)]: to do that.

[Rep. R. Scott Campbell (Vice Chair)]: I think we have somebody here who might just

[Rep. Christopher Howland (Member)]: need That's meter. Yes. The free modern meter was would be like your odometer in your car. If you your odometer in your car is

[Rep. R. Scott Campbell (Vice Chair)]: It spins one way or the other, and that's way.

[Rep. Christopher Howland (Member)]: If you your grandfather's car, the odometer went off if he moved it backwards. He backed it up. Uh-huh. And then they did away with that. They and that term is detent. So the new so the old meter before modern meters did that roll the digits back. Yep. So you would get a credit into the old meter because the meter reader reading when they came at the end of the month would be a smaller number Right. Than what it was the month before.

[Rep. R. Scott Campbell (Vice Chair)]: So in in effect, you'd be getting paid for What? Retail for for

[Rep. Christopher Howland (Member)]: No. They because because they would take that difference. They would say you had 2,000 last month. You got 1,900 when they came this month, they would give you a 100 at the 18 point Yes. 4¢. But if you you get 18.4¢ for everything you push back to them Yeah. When you bring it back next December, you pay 21.47. Okay.

[Rep. R. Scott Campbell (Vice Chair)]: Anyway, we don't forget the details either.

[Mike McCarthy (President, SunCommon)]: Last couple of slides, I swear I'm almost done. So just to put a finer point on the impact of the negative adder, the current value of solar export in most of Vermont utilities is between 14 and 15¢. You know, the statewide blended is at about 18.4. You take the the 4¢ negative adder today, you get 14.398. The cost of power in Fremont power territory, know, about two thirds of the residential customers in the state is close to 21. So right now, the differential's really big because we haven't had the the biannual rate review. You know, this is power rates as of October. So today, the differential is even more than 4¢. You know, it's the it's really if you were able to get the one to one value for everything you were consuming on-site, it's more like a 6¢ difference. Anyway, what would that really mean for a homeowner? We're not talking about huge money, but it it adds up over time. So if you, for instance, had a a small solar array like I do, I have a really small one, like a four kilowatt array that's that I've had up for about ten years at my house. If it produces about 400 kilowatt hours in a month and it uses half of that, and so you were able to save those few cents on about half of it, you would save about $15. So in the wake of the kind of rug pull of the federal tax credit that happened with us last year, we're asking the legislature and state regulators to put a pause on any consideration of reducing the value any further. You know, with the elimination of that tax credit, any further loss of value would really be a blow to the residential solar industry in Vermont. And there are hundreds of Vermonters that are employed, and thousands of homeowners that are saving money and and producing energy, that's clean in here in state. And, additionally, I think that ideas like h seven one six would help make up for some of that lost value and also align our goals, as I said, you know, increase storage, on-site consumption with the signal that we're sending to the marketplace and the behavior that we want the homeowners and businesses who are investing in small distributed generation storage. So right now, the negative ad is really acting as a disincentive, and it was really counterbalanced by this federal support for solar that we expected to actually go through until 2032. And now, you know, years early, Congress decided last year to pull that away for largely ideological reasons, I think. So I really, really appreciate you all taking the time to to hear my support for h seven one six. I'm happy to take any questions. Thank you.

[Rep. Kathleen James (Chair)]: Yeah. Greg Morrow. Do you

[Rep. R. Scott Campbell (Vice Chair)]: know off the top

[Mike McCarthy (President, SunCommon)]: of your

[Rep. Christopher Morrow (Member)]: head how many of your, like, the last year or your, residential systems are being paired with batteries?

[Mike McCarthy (President, SunCommon)]: Yeah. We're seeing roughly, one in 10 being paired with batteries, but that's a little bit, undercounting what's happening because so many of our customers are actually going back and adding a battery on. So when I think about the number of battery projects solo that we've done as an add on, and we're kinda going back to people who've gotten solar, and then they're choosing to add storage as it's become more affordable. And there have been programs like flex load with VEC or the energy storage lease program that Fremont Power offers. Those have been really great for, a lot of those folks who already went solar. So I would say storage is about, a third of our residential business, and it's, being attached to, you know, right now about one in one in 10 or, sometimes one in five systems depending on bunch of different factors and what utility they're in. So the higher attachments rate rates in GMP where the lease program is a really attractive option.

[Rep. Bram Kleppner (Member)]: Yeah. And speaking of leases, I was just curious because I understand the tax credit is still in place for leasing solar and the leasing batteries. I mean, it's probably expensive, but you guys actually have history doing that at some point.

[Mike McCarthy (President, SunCommon)]: Yeah. So leases present some challenges. We are dipping our toe in the water of offering that as a way to pass through some of the value of the commercial tax credits that are still available. To be frank, I think that the way many companies, hold out leases and the experience that consumers had when, for instance, you know, we sold and installed a bunch of really high quality solar with some power. And that company went went bankrupt. It created a lag in who could service. So we wanted to help people who had a broken inverter during the change in ownership with SunPower go out there, but the homeowner didn't actually own the solar, and it was a little ambiguous about who had the rights to it. So there wasn't company we could call and say, hey. We're gonna do the service on your behalf and bill you. So it became a real challenge. So leases have some challenges. We think that we're working with some partners early on that may be able to help us with that. But, the traditional leases are valued based on the savings that they can offer a customer. And in Vermont, the net effect of the negative adder is it makes leasing really unattractive. They they the companies the national companies that provide the financing for those leases will not pay solar installers enough in most cases to be able to make it worth installing all these solar products at today's prices. The other complicating factor with that, representative Torre, is that in order to make those work, the equipment needs to be either fully domestic content and American made or Fiat compliant. And I don't think that congress really thought through the lack of a supply chain that exists today. And so the equipment, it's hard to tell what's gonna be available. And and I we already we're seeing some onshoring of equipment, but not enough of the right kind of combination of things to actually be eligible for that. So it's created a lot of uncertainty and complexity in being able to offer some of these products. So right now, they're all kind of in an uncertain pilot mode, especially in Vermont where the negative matter makes the rate structure really hard for a lot of, those lenders to underwrite.

[Rep. Kathleen James (Chair)]: I I asked Jared this question earlier. Are you are a lot of your residential customers financing it, like your East Rise or something? Or are they paying?

[Mike McCarthy (President, SunCommon)]: Yeah. So credit unions like East Rise, Vermont Federal Credit Union have been a really great source of green energy loans. And I would say in Vermont, about two thirds of our, customers choose to finance with, an in state credit union partner like that that's offering a green energy loan. Okay. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: So you mentioned that you install in Hudson Valley neighborhood. Yes. What is their system like versus what provides?

[Mike McCarthy (President, SunCommon)]: It's a great question. They offer a 5,000 up to a $5,000 tax credit at the state level, so there's still a a tax credit there. And their utility rates in much of the Hudson Valley, especially Central Hudson, are currently much higher than our rates are here. So they're we're looking at bills for Central Hudson customers that are between 26 and 30¢ a kilowatt hour. Their supply rates kind of go up and down. And so the higher utility rate combined with greater state incentives means that that, like, fourteen year payback that I was showing for projects in Vermont is more like six and a half years in the Hudson Valley. So we're putting most of our investment in hiring and thinking about where our growth potential is right now in the Hudson Valley. It's uncommon. And, you know, I think a lot of multistate companies are looking at the Vermont residential solar market as kind of frozen even though there are so many homeowners who haven't gone solar yet, the market penetration here is higher than in some states. I think Vermonters really got on solar quickly, but there's still so many people who could benefit, from distributed generation. And I think if if you all can work with us and the utilities to align our policy so that we're incentivizing the right way to do that, so it's good for the grid as as it matures, I think the days of us having really low battery attachment rates are coming quickly to an end. And, you know, we we understand that the value of just exported power in the mid in midday isn't always great if you're not putting it into some storage on-site. And so we're very happy to, you know, be pivoting and training and then bringing on new products to be able to capture some of that power and then deploy it.

[Rep. Christopher Morrow (Member)]: Are there adjusters in New York as well?

[Mike McCarthy (President, SunCommon)]: In New York, it's all one

[Rep. Christopher Howland (Member)]: to one. Yeah. All one to one.

[Mike McCarthy (President, SunCommon)]: It's all one to one at the residential level. If you're if you're remote crediting off sites, they have a complicated value stack calculation, but those are mostly for bigger systems. If you're, net metering for on-site consumption, so most residential and small business scale solar is all one to one in New York. Yeah. That's another big factor. Sorry if you can skip that. Yeah.

[Rep. R. Scott Campbell (Vice Chair)]: It's 50% more for your kilowatt hours you're generating. Yes. Yeah.

[Rep. Bram Kleppner (Member)]: Yeah. I'm just curious if you could tell us what you know about California.

[Mike McCarthy (President, SunCommon)]: Yeah. So I I don't know a lot about that market. They have created a in their sort of net metering, I think they're on like three point o now. So much deeper market penetration, and there are requirements put in place where you have to, if you're building a new home, put up solar. But then there are also the compensation structure is much more complicated and graduated, and it highly incentivizes battery attachment. So lower consumption for export, like, much lower. So I think that they've they've gone with a very different it's a little apples and oranges because if you basically say you have to install this if you're gonna build a new home, and then we're gonna we're gonna compensate you less, it creates a little bit of a market distortion because there's a mandate that you're gonna do it even if it may not totally make sense financially at some time. But because their power rates are so high and they're A lot of sun. And they have a lot of sun, I think they they, in many markets, can still make it work.

[Rep. Christopher Morrow (Member)]: There's a lot of something you can share, but I'm wondering what your projections are in terms of residential shovelware decline in 2627 compared to previous years.

[Mike McCarthy (President, SunCommon)]: Yeah. I mean, we we've already seen, because of the negative adder and a few other factors like high interest rates, making it harder to it's representative James' question about the credit unions, you know, if when we were seeing interest rates that were sub 4%, it looked better than when they were six and a half. Right? So those factors were already slowing down the adoption to an extent. So our residential business has gotten smaller. We focus more on commercial and and and battery storage in order to continue to have viable business models. But our projections for this year in Vermont are very, very low. I'm trying to think about how much lower our residential projection is. Probably about 60% of what we installed for residential last year. I don't know that every I would talk to some of my colleagues at other solar companies about that part of the reason we did that is because it was so uncertain. We asked a lot of our commercial projects if they'd be willing to delay their installation until now. And the way I'm keeping most of my crews employed right now is by installing commercial solar projects. We're actually on the roof today trying to wrap up the Burlington High School Ah. Installation. So those projects that are still eligible for direct pay and the commercial benefit, at least for the next couple of years, are really, really important to, you keeping these electricians and installers employed right now.

[Rep. Christopher Howland (Member)]: The commercial, generation that you just referred to, direct pay, is that the

[Mike McCarthy (President, SunCommon)]: same as the power purchase agreement? No, actually. The direct pay I was referring to, was an innovation of the inflation reduction act in 2022, which allows, schools and municipalities, nonprofits, and some other, entities that are not usually income taxpayers to access, the thirty year the 30% tax creditor, directly. So they get it as a grant from the IRS in lieu of a tax credit that a corporation or a, or, you know, up until December 31, a homeowner could take, as an income tax credit. They get it as a an actual direct pay, a check from the IRS for a qualifying energy project like solar. So like a refundable tax credit to me. Exactly. But only to municipality schools Right.

[Rep. Christopher Howland (Member)]: And nonprofit. Exactly. About the commercial account commercial accounts or the the non net metering? So people who put up two megawatt, standard offer was 2.2, so something around that size, but not hitting the standard offer program. What what do they get paid for what they produce? What does it Yeah. What's a new power purchase agreement, I guess you'd call it. Yeah.

[Mike McCarthy (President, SunCommon)]: I'll give you I'll

[Rep. R. Scott Campbell (Vice Chair)]: I'll give you a little bit

[Mike McCarthy (President, SunCommon)]: of a vague answer. It depends. I have seen, I've been in negotiations with power purchase agreements mostly on-site, which is gonna get more than if folks are just straight up you know, if there are some situations and we consider this actually at Burlington High School for a time and talked to Burlington Electric Department about doing a much bigger solar projects than kind of the 200 kilowatt net meter project that's there now. If we had gone with a really big parking lot canopy there that the architects were talking about initially had done, trying to get the school to be net zero, the only way to really make that work would have been to enter into a power purchase agreement with BED. And we were talking about some something in, like, 13¢ per kilowatt hour, but that was for, you know, a 1.5 megawatt project where most of the power would be consumed on-site. I think, you know, the a lot of the power purchase agreement projects are somewhere in the kinda 10 range for those much bigger power purchase agreement kind of power plant style solar arrangements. It's hard to compare those with, you know, kind of little 10 kilowatt rooftop project that's on your house. It's a little apples and oranges, but, yeah, typically, the I think the projects that are bidding now are somewhere around 10¢, maybe a little bit lower in the cases of some of the really big ones like the five megawatt projects that are doing power purchase agreements with the utilities.

[Rep. Laura Sibilia (Ranking Member)]: So I do not recall the answer to this. I'm gonna forget the

[Rep. R. Scott Campbell (Vice Chair)]: Soloprolol. Yeah, another

[Rep. Laura Sibilia (Ranking Member)]: one. So can you explain how Well, I mean, maybe that's gonna come through. So but can you explain how Yeah. That would how your companies would Yes. Engage with that?

[Mike McCarthy (President, SunCommon)]: So we were really involved in the in the process, and I I really appreciated the work that, you know, Vermont state agencies did to to prepare Solar For All. The project since we're a residential installer, there there were sort of three parts of Solar For All in Vermont, but the program that would have been for low and moderate income households to get a subsidized solar array, They were looking at standardizing a six kilowatt package that could have kind of a capped price per watt, and then that project, would basically subsidize about 40% of the value. Mhmm. So if, a homeowner was looking at, you know, just getting a six kilowatt project installed by us through that program, we would essentially get 60% from some financing that the that we would work to get, and then 40% from the program to make that a much more affordable install for those LMI households.

[Rep. Laura Sibilia (Ranking Member)]: Do you have any projections about take take rates or

[Mike McCarthy (President, SunCommon)]: Yeah. Mean, well, we were talking the whole the industry, you know, like, all of my fellow installers were showing up at the sort of informational there were a a series of the Public Utility Commission was handling, like, how this was gonna potentially roll out along with some other partners, and we were participating in that and having conversations about trying to use all that within a year, basically. So we we thought it would be possible to leverage all of the available incentives and run right through that. Now that the tax credit's gone away and you can't kind of stack stack that, I'm not sure that it would be that we'd be able to do it quite quite that fast. But I think it would make solar so much more affordable for those homeowners and having the kind of confidence I think, unfortunately, there have been so many players over the years that have kinda come into the solar industry and made promises that they couldn't really keep that. I think a lot a lot of the market is a little bit shy sometimes about, you know, like, when somebody knocks on their door or is showing up in their Facebook ads saying you're gonna get free solar. Like, we don't advertise that way because that's not what solar is. Right? It's an investment. People need to really understand it. And we take pride in educating the people that you'll see before you that are my colleagues in the industry want to do it ethically and and in the right way. But having programs like solar for all and with state partners basically helping us facilitate a good financing program that's guaranteed to get a really substantial savings on, over just sticking with buying your power from the utility, that that, would create a lot of consumer confidence for those folks that, you know, they're not our typical target demographic because they're not potentially thinking about, like, oh, I'm gonna go finance this thing and take on another loan, or I don't have the cash to kinda get over the upfront payment. So the Solar For All was, like, about expanding the marketplace to folks who are just on the edge of maybe not, you know, they own their own, but it just wouldn't make sense for them to go solar without a little extra help from that program.

[Rep. R. Scott Campbell (Vice Chair)]: Yeah.

[Mike McCarthy (President, SunCommon)]: We were very excited about that. I would love for it to come back. I'm trying to be cautious about my optimism. If it does, we are so ready. We and our other colleagues in the industry would always love that boost.

[Rep. Christopher Morrow (Member)]: Where that's at. It's in the quartz.

[Rep. R. Scott Campbell (Vice Chair)]: It's in the quartz. Yeah.

[Rep. Kathleen James (Chair)]: Do we have more questions for mister McCarthy?

[Rep. Christopher Howland (Member)]: Some of the utilities came in, they said that they have, revenue losses because they're not selling that electricity, call it, that's 100, 400, 200 kilowatt hours that you use, that they they they are evaluating they lost their sales of that. Well, I guess you referred to that, that you don't get the you don't get any credit for buying a refrigerator that uses 25% of that.

[Rep. R. Scott Campbell (Vice Chair)]: I'm sorry.

[Mike McCarthy (President, SunCommon)]: So No. I I yeah. That's what I was gonna get to representative, Howland, is that it's a it's a little funny for us that we only hear from some of the other stakeholders about the sort of avoided revenue, and that's not how we would think about encouraging efficiency when folks are buying appliances. And I think the great thing about h seven one six is it says, yeah, we should think about, you know, the export we are the negative matter being applied to that makes sense as a matter of policy actually. But if you're producing your power on-site and you're consuming it yourself and we wanna drive behavior to get people to absorb that power themselves in this time where on some sunny days, we're actually putting more power into the grid than maybe is really economical. I think we're driving toward a future with a much more dynamic grid, and some of the comments that I think you you have heard earlier on the cost of net metering are really about looking back to when we were deeply incentivizing net metering. I mean, we're excuse me. We're putting 10 acres of solar in a field somewhere and giving it 22¢ a kilowatt hour for off-site, you know, solar. And I was involved in some of those projects. Most of those have aged out of getting the big adders now. And so looking forward with new projects like h seven one six does, we're saying, okay. Well, let's try to design the future of this to actually encourage the behavior we wanna see with more on-site consumption, more storage, and and build this dynamic grid where utilities have more access to batteries and virtual power plants, and homeowners have a lot more ability to control their energy usage and and get signals from the marketplace and the way it's regulated that tell them, hey. It's better for you to you're gonna charge up your EV like I do, you know, do it at night with the time of use rates that we get, that's great. But also, if you get a signal and your car automatically knows that, hey, there's too much solar in your neighborhood, and it can just grab that at the time, I think that's the kind of future that we're all heading to. And I think the utilities that are really thinking smartly about all this wanna send the signals to be partners with us. And, you know, our role is to kind of keep the expertise in Vermont that we can deploy these technologies and learn more and and become innovators in partnership with those other stakeholders.

[Rep. Christopher Howland (Member)]: So two things. The log to charge my car isn't long enough during the day to reach where my car is parked. Okay? Because it's not at home. So we can't charge it at the day that's not there. Two, the revenue meter or the gross meter production is also assessed a energy efficiency charge of 1.1¢. So, point 5% here, negative.

[Mike McCarthy (President, SunCommon)]: Bram

[Rep. Bram Kleppner (Member)]: Kleppner? Well, was gonna add the concern about not having community solar anymore. Know, so that was kind of So we're really having a lot of bad things happening at once.

[Mike McCarthy (President, SunCommon)]: We we have not had a lot of wins, policy wise, in the small distributed generation space. Really appreciate the ability for us to partner with utilities and others around storage because that's been a a the kind of our savior in this time. But, yeah, the end of community solar has really been difficult. I think that the renewable energy community writ large in Vermont, my colleagues at other companies, you know, is part of a grand bargain to maintain, you know, support for in state solar generation writ large. So I I kinda understand the policy trade off, but it's a difficult one when a lot of Vermonters who don't own their home or can't take advantage of this, you know, for a long time, they could participate in shared solar in

[Rep. Christopher Howland (Member)]: way that they can't today.

[Rep. Bram Kleppner (Member)]: Cameron did things about ACRE for the low income community solar that the utilities offer.

[Rep. R. Scott Campbell (Vice Chair)]: I'm just I'm trying to think if there's a way to include some incentive for including batteries in in in the future installations. And that that is part of the bill now, but I think you have thoughts about that.

[Mike McCarthy (President, SunCommon)]: I couldn't think of anything. I think one way you might consider taking this conversation, and I think there's it's worth having a robust conversation about this, a representative Campbell. One place you might go is to say, well, if we wanna encourage more people to adopt storage and attach this, but we don't wanna have to change up all the metering and everything, we could just say we're not gonna apply this to folks who are participating in a virtual power plant program or something like that to make it a really easy choice, you know, an easy policy choice that doesn't require Apply apply what the Oh, the negative adder.

[Rep. R. Scott Campbell (Vice Chair)]: The negative adder to our usage.

[Mike McCarthy (President, SunCommon)]: Yeah. So if if if you said for all the projects that are going to have participate in flex load or GMP's lease program or the when you bring your own device battery programs, that the negative adder won't apply to your solar, that would increase the value of that attachment by a few cents per kilowatt hour for for those folks.

[Rep. R. Scott Campbell (Vice Chair)]: Are you talking about just the on-site usage or the the usage of this pipe that I can't do on the grid?

[Mike McCarthy (President, SunCommon)]: Hey. I would I would take it for either. Yeah. Would be a help either way. It would be a big help for just saying we're not gonna imply the negative matter to At all. If you're participating in a VPP to at a certain degree. But I'm right now just making policy recommendations up on the fly here that I haven't talked about with anyone. So I know that's dangerous. I know I had that in representative Dan's chair report. But yeah. I think there are different ways that you could skin this cat and and help the industry and and post things along. And thinking about the incentives to get people to attach battery and solar together

[Rep. Christopher Morrow (Member)]: Mhmm.

[Mike McCarthy (President, SunCommon)]: Would be very helpful to a lot of the installers who are kinda trying to do the right thing and be partners with the utilities and not, you know, create more problems. What we wanna do is, you know, continue to be good partners out here installing for the benefit of, you know, Vermonters and clean energy.

[Rep. Christopher Morrow (Member)]: And there's arguments we made that the from a statewide point of view, the energy going back out to the grid at peak load times is much more valuable than even the high meter consumption because that's the highest cost electricity we can have in a given day or month. Right? So

[Mike McCarthy (President, SunCommon)]: should if we're gonna do that, it should go on both behind meter and export. Yeah. When when solar is is bringing down the peak daytime and it is taking off the most expensive power that utilities have to buy, it has been a very powerful savings. I think we're cognizant of the arguments that have been made that, you know, we're really shifting the peak now. We have enough solar generation in a in a lot of Vermont. No.

[Rep. Christopher Morrow (Member)]: But I'm saying you're out of battery here and Oh, and

[Mike McCarthy (President, SunCommon)]: then you can get out at peak. Yes. Exactly.

[Rep. Christopher Morrow (Member)]: We're exporting our solar to the grid at peak times through the battery, and that that that's the highest and best use of of kilowatt hour. Right? Right.

[Mike McCarthy (President, SunCommon)]: If if the utility has access to that battery and it's you know, it was fed by solar or from the grid, it it really doesn't matter. If the utility has the ability to pull some of that juice when it needs it, like these virtual power plant programs that G and P, V, C, and a couple of the other Vermont utilities have brought on board in recent years, it is so good for the grid. It is so good for Vermont ratepayers. And I think the the the benefit that we're seeing right now is that there are very attractive subsidized battery options that have that have had the utility sharing some of that value. I think, you know, as we move forward, getting the value of the paired solar and battery together so this all works harmoniously, right now, it's a little scattershot. Like, there are people that just don't want their power to ever go out, and GMP's got this lease program, and so they're just going ahead and getting the batteries, but they're not even thinking about solar yet. It's a it's a little chaotic right now. I think we are trying to help guide the people who come to us for advice to look at all of, you know, the efficiency options that they have, the energy production options with solar, the storage options, and also things like EV chargers and SPAM panels. Like, we have really diversified our offerings to you know, in a time where, you know, we used to just be a residential solar company, and now we're doing all this different stuff for the for those exact reasons. We wanna have more value, not just to that individual homeowner, but these utility programs with with the batteries are really, really generous right right now, especially the GMP lease program. That that is a huge benefit to us as an industry and to Vermonters because of that savings. You know, that that ability for the utility to take that power when it's at peak, like you're saying represent Morrow, and just say, okay. I'm calling on all these batteries to put power in the grid. It's as if there's some super clean power plant that they can just turn on. It's amazing. And now there are thousands and thousands of those batteries all over Vermont, including in my parents' house.

[Rep. Kathleen James (Chair)]: Awesome.

[Rep. R. Scott Campbell (Vice Chair)]: Well, it'd really benefit the consumer, the customer, if if they could use that power every day, you know, so they're generating power in midday, and then they come home at night and turn on the heat pump or whatever. If the cuts cuts were gonna could count on using that power unless there's some, you know, system wide peak, which is when GMP is using power, that would be but that that's not how the lease agreement, at least it's not how it's explicitly set up. As as I could see other the ROs says that we can disconnect your battery from the grid using using the death lab. So that was news to me. But but, anyway, maybe that's maybe that's an angle, but we'll look at too. We're bridey policy to be go.

[Rep. Kathleen James (Chair)]: Mike, thank you so much for coming.

[Rep. Laura Sibilia (Ranking Member)]: Thank Really appreciate it.

[Mike McCarthy (President, SunCommon)]: Have a super fun committee.

[Rep. Kathleen James (Chair)]: We can go off live, and we have a little bit of a break. We're going to be back at 02:30.