The complete list of Vermont solar incentives and tax credits for 2023, and how to use them to cut the cost of going solar in the Green Mountain State.
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Vermont boasts 413 Megawatts of installed solar capacity and produces more than 17.5% of its energy from the sun. In 2022 it ranked 34th overall in the U.S., but slid to 36th in late 2022. According to the Solar Energy Industries Association (SEIA), very little growth is expected for Vermont’s solar sector in the next few years, meaning the Green Mountain State could slip to 50th place for solar in the U.S.!
Help Vermont go green by installing rooftop solar! Help yourself by taking advantage of a state sales tax exemption, property tax exemption, generous net metering rules, and a battery storage rebate program, depending on your utility. And don’t forget that federal solar tax credit of 30 percent.
Vermont State Incentives
| Incentive | Description |
|---|---|
| Utility battery storage rebates and rewards | Vermont customers of Green Mountain Power may be eligible for up to $10,500 towards solar storage batteries, with ongoing incentives also available. |
| State property tax exemption | Solar energy equipment and battery storage are exempt from municipal property taxes in Vermont. |
| Net metering | Vermont has quite generous net metering rules but credits expire annually. |
| State sales tax exemption | You don’t have to pay sales tax on solar PV or heating systems in Vermont. |
| Expedited permitting | Vermont offers fast-track permitting to help residential customers start net metering. |
Utility battery storage rebate and rewards
Green Mountain Power customers in Vermont can take advantage of the utility’s Bring Your Own Device program. This offers rebates of up to $10,500 toward a solar storage battery if you enroll and share part or all of the energy stored in those batteries with GMP during peak events.
Peaks happen about five to eight times each month and last three to six hours on average. GMP alerts participating homeowners at least four hours in advance of a peak event, typically via smartphone app.
The utility provides an upfront payment of $850 per kW of storage if you enroll in GMP’s three-hour discharge program. The amount goes up to $950 per kW for four-hour discharge. You can even retrofit your existing solar system with battery storage and receive these rates plus an extra $100 per kW if you live in a high-need area of the grid.
The program rules allow you to choose your battery (from a list of five options) and your installer (from an approved list from Renewable Energy Vermont). Battery options include:
- Enphase IQ Battery
- Generac PWRcell
- SolarEdge StorEdge Compatible Systems
- Sonnen Battery
- Tesla Powerwall 2.0.
You can also choose how much storage to enroll, meaning you don’t have to sign all your stored energy away and can keep some in reserve for home use.
GMP offers this program because it’s more cost-effective for the utility to use distributed generation and stored energy than it is to spin up coal-fired power plants at peak times. By signing up, you can earn money, help other families save money on energy bills, and cut carbon emissions from fossil fuel power stations.
State sales tax exemptions in Vermont
Solar heating systems and PV installations are exempt from sales tax in Vermont. State sales tax in Vermont is set at 6%, saving around $1,000 upfront on the average home solar installation.
State property tax exemptions in Vermont
Vermont law allows municipalities to offer exemptions for solar energy systems from municipal real and personal property taxes. This exemption applies to solar energy systems with a capacity less than 50 kW that are either net-metered or not connected to the electric grid (as long as the system only provides power on the property on which it is located). The law includes solar storage systems, meaning you won’t pay any extra property taxes for value added by installing a home solar energy system.
Vermont also exempts solar PV systems up to 50 kW from the statewide education property tax.
Net metering in Vermont
Vermont mandates net metering but has a somewhat complicated system. Briefly, any excess energy is credited at a blended residential rate and credits can be carried over to the next month’s bill. The blended rate depends on the utility but typically means customers get slightly higher than retail rate for their surplus production. Credits aren’t carried over at the end of the billing cycle, however.
For most Vermonters, it makes sense to size your home solar energy system to just cover your needs. That way, you’ll lose little or no credits each year. Alternatively, you could add solar battery storage and make sure to use up any surplus credits to charge the batteries right before your true-up anniversary date.
Vermont Electric Coop offers net metering at a blended residential rate, currently $0.15831 per kilowatt-hour (kWh). Credits are carried over month to month until they expire at the 12 months anniversary. Note, though, that if you choose to retain your RECs, the VEC will charge you four cents per kWh for every kWh produced for the life of the system. Net metering customers who began net metering after September 1, 2022, and who have a system of 150 kilowatts or smaller will also be charged two cents per kWh for every kWh produced.
Green Mountain Power offers a similar net metering program to its customers who install residential solar. GMP customers might also consider signing up to the utility’s Bring Your Own Device program to help pay for storage (see above).
The 11 members of the Vermont Public Power Supply Authority also offer net metering, with tariff information available here for each member.
Vermont is one of the few states to allow for group net metering. This is where customers in the same utility service territory can form groups to share a single net metering system. The advantage of this approach is that surplus energy created through one system can help offset the energy bills of another property.
Expedited permits for rooftop solar
To make it easier for residential customers to begin net metering, Vermont’s Public Service Board offers faster permitting for rooftop solar. Customers can apply for a Certificate of Public Good (CPG – required for net metering in the state) and expect to receive it in 10 days or less for a rooftop system under 15 kW capacity or in 30 days or less for systems over 15 kW.
Final thoughts on state solar incentives in Vermont
The cost of electricity is much higher than the national average in Vermont, with 2022 prices at more than 19 cents per kilowatt hour. Add up the potential savings over a 10-year period and the average Vermonter could save nearly $20,000 on their utility bills. That’s more than enough to cover a typical rooftop solar array.
Factor in the federal tax credit, net metering, a state sales tax exemption, and an energy storage reward program, and your solar payback period in Vermont could easily be less than eight years (the national average). Vermonters can also use a property tax exemption to avoid having to pay extra taxes when the value of their home increases after installing rooftop solar.