Vermont’s Key Solar Incentives: A Breakdown

^{Image source: Canva.com}

Vermont‘s commitment to renewable energy and supportive policies make it an ideal place for solar power. The state offers numerous incentives to make solar more affordable for homeowners. Our article outlines the key programs in the Green Mountain State to help you access these incentives.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Net Metering

Since its inception in 1998, Vermont’s net metering legislation has undergone multiple expansions and revisions. Any Vermont electric customer is eligible for net metering upon registration and receipt of a Certificate of Public Good from the Vermont Public Utility Commission (PUC).

For certain systems like hydroelectric, ground-mounted PV systems up to 15 kW, roof-mounted PV systems, and mixed ground-/roof-mounted systems up to 500 kW (with the ground-mounted portion not exceeding 15 kW), a streamlined registration process outlined in PUC Rule 5.100 is followed. Upon completion of registration and compliance with utility interconnection requirements, a Certificate of Public Good is automatically considered issued 15 days after form submission, enabling the customer to proceed with installation.

Systems with capacities exceeding 15 kW but not surpassing 500 kW, including ground-mounted PV systems, and mixed ground- and roof-mounted systems with ground-mounted capacities exceeding 15 kW, undergo a more extensive application process for a Certificate of Public Good. This procedure also applies to net-metering systems employing eligible technologies other than PV and excludes hydroelectric or roof-mounted PV systems without ground-mounted components.

Renewable Energy Systems Sales Tax Exemption

Vermont’s sales tax exemption for renewable energy systems, introduced under the Miscellaneous Tax Reduction Act of 1999 (H.B. 0548), initially targeted net-metered systems exclusively. Over time, this exemption has broadened to encompass systems with capacities of up to 500 kilowatts (kW) utilizing eligible renewable energy resources as defined in 30 V.S.A. § 8002, micro-combined heat and power (CHP) systems up to 20 kW, and solar water-heating systems. The exemption applies to both grid-tied and off-grid systems. Vermont’s standard sales tax rate stands at 6%.

Local Option – Property Tax Exemption

Vermont municipalities have the discretion to grant exemptions from municipal real and personal property taxes for specific renewable energy systems (please note that state property taxes remain applicable). These eligible systems encompass a range, such as windmills, solar energy collection facilities, methane conversion facilities, net-metered systems, and their components, excluding the land hosting the facility. Adoption of this exemption varies across municipalities, but typically it covers the entire value of qualifying renewable energy systems and extends to residential, commercial, and industrial real and personal property.

It’s worth noting that solar photovoltaic systems under 50 kW, whether net-metered or off-grid and supplying power solely to their host properties, are already exempt from municipal property taxes according to 32 V.S.A. § 3802(17).

Solar for All

• SFA Vermont’s (SAV) goal is to reduce electricity costs for low-income and disadvantaged Vermonters by promoting solar array ownership. This initiative aims to maximize greenhouse gas emission reductions and advance solar market development. SAV will facilitate the installation of solar systems on the roofs of low-income homeowners, managed affordable apartment buildings, and as residential-serving community arrays. Additionally, it will promote the adoption of battery storage systems and electrical upgrades to further reduce greenhouse gas emissions. SAV plans to create long-term impact by establishing revolving loan funds and financing programs to leverage private capital and other greenhouse gas reduction initiatives in Vermont.
• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 

Uniform Capacity Tax and Exemption for Solar

The Uniform Capacity Tax and Exemption for Solar program provides a standardized property tax rate for solar energy systems based on their capacity. Additionally, it offers a tax exemption for certain solar energy systems to encourage the installation and use of solar technology. This initiative aims to make solar investments more predictable and financially attractive for property owners.

Green Mountain Power’s Bring Your Own Device Program

Green Mountain Power’s Bring Your Own Device Program offers eligible customers a solar rebate when switching to solar power. If your installation includes a home battery purchase, you can receive up to $10,500. To qualify for the rebate, you agree to share some of your stored energy with Green Mountain Power during peak demand times.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.