Vermont begins planning to spend $62.5 million in federal Solar for All funds; rollout split across three programs

Montpelier — Vermont has an award of $62,450,000 from the U.S. Environmental Protection Agency’s Solar for All program and is using a one-year planning window to design and launch three subprograms that together aim to bring subsidized rooftop and community solar to low-income and disadvantaged households.

Ethan Inch, climate policy adviser to U.S. Sen. Bernie Sanders, told the House Energy and Digital Infrastructure Committee that Solar for All is part of a broader federal initiative and said the money has been committed to Vermont but not fully drawn down. "There is a legal contractual obligation ... but the money is physically in the U.S. Treasury," Inch said.

The Vermont Department of Public Service’s State Energy Office, led by Director Melissa Bailey, is the lead state implementer. Bailey told the committee the department applied for $100 million and received a $62.45 million award, the largest per-capita Solar for All award among states. She said the award is a five-year, reimbursement-style grant and the department has begun monthly draws for staffing costs (she said the program has drawn under $100,000 so far).

Why it matters: Solar for All was created under the Inflation Reduction Act and sits inside the EPA’s Greenhouse Gas Reduction Fund. The program’s stated federal objective is to concentrate solar deployment and associated bill savings in low-income and disadvantaged communities. Vermont officials said the state’s program must meet EPA rules — including Buy America, Davis-Bacon, NEPA and a minimum 20% reduction in participants’ utility bills — and must report to the agency on outcomes and quality assurance.

Program design and scale: Bailey described three subprograms the state plans to run under the grant: - A managed affordable solar housing (MASH) subgrant, led by the Vermont Housing Finance Agency (VHFA), for multifamily and affordable-housing projects; Bailey said roughly $22 million is expected to go to VHFA and that the state estimates the MASH track could reach about 3,000 households. - A single‑family rooftop program (described in testimony as the "RAISE" program) aimed at low-income homeowners, for which Bailey said the department plans to allocate about $14.5 million and expects to serve roughly 1,000 households. The conceptual finance model includes tax-credit monetization, Solar for All incentives to buy down upfront cost, and a short-term loan or lease so customers have no or low upfront costs; after a finance term, participants would own the system and continue to receive net-metering compensation. - An Affordable Community Renewable Energy (ACRE) pathway that pays bill credits for off-site or utility-owned community solar; Bailey said this pathway builds on an ARPA-funded ACRE pilot but did not list a dollar allocation for it in the committee hearing. She said ACRE participants could see an average bill reduction on the order of $25 per month under current designs.

Eligibility and requirements: Vermont will use an eligibility cutoff of roughly 80% of area median income (a common Vermont threshold for low‑income energy programs), which the department said maps to EPA guidance. Bailey reiterated that EPA requires participating households to achieve a minimum of a 20% reduction in monthly electric bills from program measures; the department can choose to deliver deeper savings for smaller groups at the tradeoff of serving fewer households.

On implementation details, Bailey said some costs that enable solar installation — for example, roof or electrical upgrades required to host panels — are part of the program design conversations and may be eligible expenses. She also said energy-storage equipment is eligible in some cases (for example, to support medically vulnerable residents), but storage raises per-participant costs and therefore reduces total reach.

Federal risk and timing: Officials acknowledged federal uncertainty. Inch and Bailey said the Biden-era administration obligated the funds before the change in administration, and that dollars were briefly frozen earlier in the year; Solar for All later resumed but the EPA Office of Inspector General announced an audit of the Solar for All program. Bailey said several other federal awards (outside Solar for All) remain "conditional" and on pause with DOE and warned that changes at federal agencies add risk and slow planning. The department is seeking to design programs that can launch individual subprograms as they are finalized rather than waiting for all elements to be approved together.

Equity, grid and rate concerns: Committee members pressed on three recurring issues: how to ensure benefits reach renters and master-metered buildings, the potential for net-metering to increase costs for nonparticipants, and distribution-system constraints. Bailey said VHFA will work on mechanisms (for example, rent reductions or other nonfinancial benefits) to show value to tenants when a building is master-metered. She also said the department is intentionally minimizing reliance on net‑metering for larger programs because of rate‑pressure and equity concerns; only the small single‑family track as currently conceived depends heavily on net metering. For larger or utility‑hosted projects the department expects to use tariffs or alternative compensation mechanisms negotiated with utilities.

Workforce and compliance: Bailey said the Solar for All award includes funding for workforce development (she cited roughly $1.5 million in the budget for training, apprenticeships and electrician training) and for program administration, quality assurance and reporting. The department plans to contract with a program administrator, a finance partner to structure loans or leases, and a network of contractors or an approved roster of installers.

Outreach and next steps: The department is running focus groups and targeted community engagement consistent with Vermont’s environmental-justice law, Act 154, to refine program design and understand what benefits customers find meaningful. Bailey said some focus groups will be held around the state and that the department has contracted with Vermont Energy Investment Corporation for community outreach. The department has submitted a revised work plan to EPA and is in a planning year that can last up to one year; individual subprograms may exit planning and launch earlier if EPA approves them.

Quotes from the hearing: "Climate change is an existential threat to the entire planet," Ethan Inch said as he described the federal program’s goals. "There is a legal contractual obligation ... but the money is physically in the U.S. Treasury," Inch said of the state award. Melissa Bailey said Vermont "applied for $100 million and received 62 and a half million," and described the award as a five‑year, reimbursement‑style grant that the state is now planning to implement.

What remains unsettled: The department has not finalized exact incentive levels (the agency must decide how much upfront cost to cover per household and whether to prioritize deeper savings for fewer households or shallower savings for more households). The department also has not announced a final ACRE dollar allocation or definitive rules for decommissioning costs at end of life; Bailey said she would check whether decommissioning is eligible under EPA rules. The inspector general audit and other federal pauses create additional uncertainty for timing and drawdown of funds.

The department estimated the three‑track program could reach several thousand households statewide (Bailey said a rough total across subprograms is in the range of 8,000 households, but she framed that as a planning estimate that depends on final incentive levels). The committee hearing concluded with the department continuing work with community organizations, utilities, VHFA and potential finance partners to finalize program rules and launch individual subprograms as EPA approvals arrive.

Ending note: Vermont officials emphasized urgency in standing up the programs so installations and demonstrable savings are underway while federal funding and program rules remain in flux. For now, the state remains in a federally mandated planning period but has started limited, reimbursement‑based draws for staffing and is moving toward contracting subgrantee and administrator roles.