Industry witness tells Vermont committee H.716 would restore value for behind-the-meter solar and encourage battery uptake

At a Feb. 12 hearing of the Vermont House Energy and Digital Infrastructure Committee, Mike McCarthy, president of Sun Common, told lawmakers that H.716 — a bill concerning net metering — would end the state-level charge (described in testimony as a "negative adder") applied when homeowners consume the solar power they produce behind the meter.

"This bill would end the tax on the energy that promoters produce when they use it on-site," McCarthy said, framing H.716 as a measure to give on-site consumption a full 1:1 value while leaving export compensation and any export adders in place. He said the change is needed to shore up the economics of residential solar following recent federal tax-credit changes.

Why it matters: McCarthy told the committee the combined effect of the federal tax-credit reduction and Vermont's negative adder has sharply weakened the return on typical residential projects. Using the example given in testimony, a roughly 10-kilowatt rooftop array that cost about $34,000 previously qualified for a $10,200 federal tax credit and produced about $1,600 per year in bill credits — a simple payback of about 14 years. After the federal changes referenced in testimony, he said similar projects now show paybacks closer to 20.6 years, making new residential installs much harder to justify financially.

Industry and jobs: McCarthy said Sun Common scaled back its 2026 project forecast and paused hiring following the federal changes and the negative adder. "Businesses like Sun Common reduced our project forecast for 2026 when that bill passed into law. We paused hiring," he said, adding that hundreds of Vermonters work in solar and storage locally.

Storage and behavior: A central theme of McCarthy's testimony was that removing the penalty for on-site consumption would encourage customers to adopt battery storage and time their loads (charging EVs, running hot water heaters) to align with solar production. He estimated current battery attachment on new residential installs at about one-in-ten, though many customers later add batteries; he said storage now represents roughly one-third of his residential business.

Financing and equity programs: McCarthy described financing options — in-state credit unions and green loans — and praised state program designs such as the "Solar for All" concept for low- and moderate-income households. He said the Solar for All design in Vermont would have standardized a 6 kW package with about 40% subsidy for eligible homes, but that the program is "in the courts" and currently not operating. McCarthy said reviving similar programs would help households that cannot afford large upfront costs.

Utility concerns and policy design: Members noted utilities have said behind-the-meter generation reduces their sales and can create revenue impacts. McCarthy acknowledged that concern and urged design choices that preserve export-related signals while removing the penalty for on-site use. As a compromise option he suggested exempting systems that participate in utility programs such as virtual power plants (VPPs) or lease/bring-your-own-device battery programs from the negative adder, which he said would increase the value of paired solar and storage without wholesale metering changes.

Comparisons with other states: McCarthy contrasted Vermont with New York — where he said residential net metering is mostly treated as 1-to-1 — and with California, where mandates and much higher retail rates change market dynamics. He said higher retail rates and state incentives elsewhere create substantially shorter paybacks and explain why installers are investing outside Vermont.

What happens next: No formal vote occurred during the session. McCarthy concluded by urging the committee and regulators to "put a pause on any consideration of reducing the value any further" at the 2026 biannual rate review; the committee recessed for a short break and expected to continue consideration later.