Vermont Solar Incentives: Tax Credits & Rebates Guide (2022)

By Jacob L.

With the cost of energy going up these days, many property owners are looking for alternative ways to power their homes and buildings. Although there are many great renewable energies out there, solar energy systems might be your best option if you’re looking for a cheap source of electricity that will provide you with decades of savings.

For residents of Vermont, now is an excellent time to buy solar energy systems because there have never been as many tax credits and rebates available to lower the costs associated with your purchase. Keep reading to learn all about how your purchase and installation of solar panels in Vermont can be made more financially accessible.

Why Go Solar in Vermont?

In recent years, solar energy production has taken off across the United States. While it used to be somewhat common to see solar panels in sunny states like Arizona and New Mexico, it is now becoming more and more normal to see solar panels lining the roofs of homes up north.

Vermont has become an especially great state in which to purchase and install a solar energy system on your property. Thanks to its Renewable Portfolio Standard goals that incentivize the use of industrial, commercial, and residential solar power, Vermont is now a superstar in the world of renewable energy. Even now, solar policies in Vermont are superb, and it’s very likely that the Vermont solar market will continue to grow for years to come.

Solar panels are a very valuable means of generating electricity where sunlight is abundant. But just because solar panels perform well in sunny climates doesn’t mean they aren’t useful in colder, cloudy areas as well. Vermont receives nearly 167 sunny days per year, which is certainly below the national average of 205 days. Nonetheless, solar panels have become far more efficient in recent years, meaning they can perform well even in a northern state like Vermont. Plus, installing solar panels will reduce your reliance on fossil fuels, reduce your carbon footprint, and ultimately help mitigate the onset of climate change.

Finally, solar panels can dramatically increase your home’s value. According to Zillow, the average home experiences a 4.1% increase in its value after the addition of a solar power system. In Vermont, the average home value is $341,415, which means the average value increase from solar panels will be close to $13,998.

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Vermont Solar Cost

The average cost of a solar panel installation in Vermont ranges from $13,090 to $17,710. On a cost-per-watt basis, solar panel installation in Vermont falls between $2.62 and $3.54. Over the last ten years, the cost of solar energy has dropped 50%, according to Solar Energy Industries Association. With energy bills increasing amid high oil and gas prices, the relative cost of solar is bound to decline further.

How Much Can You Save on Solar in Vermont?

Purchasing solar panels can save you lots of money on your electricity bills in Vermont. When solar panels produce electricity for your home, they can reduce the amount of energy that you pull from the grid, thus lowering your bills. People living in Vermont pay around an average of $110.79 per month for electricity, meaning they can save as much as  $1,329 for each year that their solar panels produce electricity.

It is also important to note that solar panels are long-lasting, so they will enable you to lock in lower electricity rates for 25 years or more. As a result, you’ll avoid future utility price hikes and save yourself from Vermont’s already high energy prices.

The Best Solar Incentives, Tax Credits, & Rebates in Vermont

There are several public and private incentives in Vermont that help you save on your purchase of solar panels in Vermont:

Incentive Summary End Date
Federal Solar Tax Credit (ITC) Vermont residents can take advantage of the Federal Solar Tax Credit and get a discount of 26% applied to their tax return. In Vermont, residents enjoy an average ITC of $4,477. December 31st, 2022
Renewable Solar Sales Tax Exemption This sales tax exemption provides residential and commercial purchasers of solar panels with a 6% state sales tax exemption. None
Vermont Solar Property Tax Exemption In Vermont, residents and property owners will not have to pay additional property taxes for the added value to their homes created by the installation of solar energy systems. None
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers are required to offer this option to homeowners. None
Green Mountain Power’s Bring Your Own Device Program The Green Mountain Power’s Bring Your Own Device Program allows Green Mountain Power customers to get as much as $10,500 off the purchase of a new home batter when they enroll in the Bring Your Own Device Program. None
USDA REAP GRANT REAP assists agricultural producers and rural small businesses reduce their energy costs and consumption by providing loan financing and grant funding to purchase and install renewable energy systems. Eligible participants in the REAP program are agricultural producers, with at least 50 percent of their gross income coming from agricultural operations and small businesses in eligible rural areas. None
Vermont Investment Tax Credit The Vermont Investment Tax Credit is offered to encourage investment in rehabilitation and qualifying renewable energy projects. Your project must be eligible for and receive the federal tax credit to receive this state credit. Project leaders can receive up to a 24% tax credit attributable to the Vermont-property portion of the investment. None
The Commercial Energy Loan Program (CELP) This program provides low-interest loans for businesses to engage in larger renewable energy and energy efficiency projects. The maximum loan amount is $2,000,000, and it can fund up to 60% of a solar project. None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax Credit (ITC) is a 26% federal tax credit available for purchased home solar systems installed by the end of 2022. In Vermont, residents enjoy an average ITC of $4,477, which is a significant chunk of money taken off their personal income taxes. Plus, the ITC has done wonders for the solar industry by helping to create hundreds of thousands of jobs and bringing billions of dollars into the economy since its enactment in 2006.

Vermont Solar Sales Tax Exemption

The Renewable Energy System Sales Tax Exemption is a sales tax exemption that provides purchasers of solar panels with a 6% state sales tax exemption. The sales tax in Vermont is only 6%, to begin with, so this exemption eliminates the sales tax on solar panels.

Vermont Solar Property Tax Exemption

The Uniform Capacity Tax and Exemption for Solar is a property tax exemption that excludes the added value of a solar installation in Vermont from your home’s value for tax purposes.

Vermont Net Metering

Vermont mandates net metering for all electricity companies. This policy means that your solar panels will be connected to the public-utility power grid, and surplus power created by your panels will be transferred to the grid. You can offset the cost of power drawn from the electricity grid as a result of net metering. The minimum amount of compensation that you’ll receive is the avoided-cost rate, which is below the retail rate. While the policy specifics of net metering programs will vary among providers, it remains hugely beneficial for owners of solar energy systems.

Green Mountain Power’s Bring Your Own Device Program

The Green Mountain Power’s Bring Your Own Device Program allows Green Mountain Power customers to get as much as $10,500 off the purchase of a new home batter when they enroll in the Bring Your Own Device Program.

Commercial Vermont Solar Incentives

Solar Incentives for Nonprofits and Businesses in Vermont

The Vermont Investment Tax Credit is offered to encourage investment in rehabilitation and qualifying renewable energy projects. Your project must be eligible for and receive the federal tax credit to receive this state credit. Project leaders can receive up to a 24% tax credit attributable to the Vermont-property portion of the investment.

USDA REAP Grant

The United States Department of Agriculture (USDA) has launched a program designed to increase investments in clean energy called the Rural Energy for America Program (REAP). REAP helps agricultural producers and rural small businesses lower their energy costs and consumption by financing loans and grant funding to purchase and install renewable energy systems. You are eligible to participate in the REAP program if you are an agricultural producer with at least 50 percent of their gross income coming from agricultural operations or a small business in eligible rural areas.

State Sales Tax Exemption

Like for individuals, businesses can claim a 6% sales tax exemption on any equipment purchased to construct and install net metered renewable energy systems, such as solar panels. Specific municipalities may offer additional tax credits and incentives.

The Commercial Energy Loan Program (CELP)

This program provides low-interest loans for businesses to engage in larger renewable energy and energy efficiency projects. The maximum loan amount is $2,000,000, and it can fund up to 60% of a solar project.

Key Takeaways: The Best Vermont Solar Incentives

Vermont is a great state to invest in residential, commercial, or industrial solar energy systems. Unlike some other state governments that provide less support for people who undertake renewable energy projects, the Vermont state government is fully behind and willing to out anyone seeking to join the rush of homeowners installing renewable energy systems.

Indeed, with financial assistance from the federal government, the state government, and additional local incentives, Vermont residents have a wealth of support to draw from when purchasing solar panels. As energy prices soar, the time is right to get into the solar game. If you are interested in purchasing, there are many great companies that will help get you set up.

Vermont Solar FAQ

Is solar worth it in Vermont?

Yes, you should definitely consider buying a solar energy system in Vermont. Solar can save you tons of money on your utility bills and help reduce your production of emissions and your carbon footprint. Plus, a variety of federal, state, and local financial incentives are available to make the purchase of solar panels accessible to anyone!

How much will my electricity bill go down with solar in Vermont?

If you live in Vermont, you pay an average of $110.79 per month for electricity. With the purchase of a solar energy system for your home, you could save $1,329 each year if your solar panels produce enough electricity to take you off the power grid. Plus, with solar panels lasting more than 25 years, you’ll be able to lock in lower electricity rates for decades to come.

How much does it cost for solar panels in Vermont?

The average cost of a solar panel installation in Vermont ranges from $13,090 to $17,710. On a cost-per-watt basis, solar panel installation in Vermont falls between $2.62 and $3.54. Over the last ten years, the cost of solar energy has dropped 50%.

Can you get solar panels for free in Vermont?

Although it is unlikely that you can get solar panels for free in Vermont, you are lucky to have the support of numerous federal, state, and local financial incentives that will significantly minimize the costs associated with purchasing a new solar energy system.

What solar rebates are available in Vermont?

There are many federal, state, and local financial incentives for purchasers of solar energy systems in Vermont. These include the Federal Solar Investment Tax Credit (ITC), the Vermont Sales Tax Exemption, the Vermont Property Tax Exemption, and the Vermont Investment Tax Credit.

How many homes in Vermont have solar panels?

There is enough solar installed in Vermont to power 70,405 homes, and solar accounts for 16.16% of the state’s electricity production.

Do solar panels increase property taxes in Vermont?

No, the Uniform Capacity Tax and Exemption for Solar is a property tax exemption that excludes the added value of a solar installation in Vermont from your home’s value for tax purposes.

How much can you write off for solar panels on taxes in Vermont?

Vermont taxpayers can write off lots of costs associated with the purchase of new solar energy systems. For more information about incentive programs, check out the Vermont state government’s website.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

  • Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
  • Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
  • Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
  • Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
  • Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
  • Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
  • Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

 

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