How to Save Money on Solar Panels In Vermont

Solar panels against a blue sky with a picture of the flag State of Vermont

How to Save Money on Solar Panels In Vermont

Key Points

  • Vermont offers strong support for residential solar arrays, with benefits from net metering and federal solar incentives.
  • The federal solar tax credit in Vermont offers a 30% return on all purchases made toward a solar array.
  • Vermont’s net metering regulation requires power companies to pay a blended residential rate for excess solar energy produced, which is four to five times more than in most states.
  • Vermont’s renewable energy standards push for 55% renewables by 2017 and 75% by 2032, indicating strong state-supported solar incentives.
  • Vermont offers options for leasing solar panels and accessing solar energy through community solar programs.

Nearly every year of the last decade, Vermont has prioritized residential solar energy in its development. Whether through affordable installations or community programs, residents find it easy to make the switch. And those that do can save as much as $16,000 or more with solar panels in Vermont.

The upfront cost of an array might seem daunting, but there’s no reason to worry about that. Vermont offers some of the best solar incentives in the country for renewable energy. From net metering to tax exemption backed by a powerful set of regulations, this article covers it all. Let’s get into it.

How to Save Money on Solar Panels in Vermont: Overview

Just looking at the price, solar panels in Vermont may seem out of reach. The Green Mountain State features some of the highest equipment rates in the country. However, this only makes up one portion of the story; in fact, Vermont offers some of the strongest support for residential solar arrays.

Their benefits come largely from an unmatched net metering mandate backed by an aggressive set of renewable standards. When paired with the federal solar incentive, you’ll have no issues purchasing a home array. Let’s take a closer look at the available programs.

Solar Panels in Vermont: Federal Incentive

By far, the most effective incentive comes from the federal solar tax credit. This program offers a 30% return on all purchases made toward a solar array. This includes all equipment, labor, and sales tax. Vermonters purchasing a 6kW system could lower the cost of their installation by over $5,000.

To receive this credit, you’ll have to meet certain criteria. Foremost, you must own your system outright, either through a direct purchase or a loan. Additionally, all of your solar equipment needs to be new and you must live at the home where they’re installed.

This program was recently extended; now, homeowners can take full advantage of the federal solar tax credit until 2032. At that point, it starts to diminish until it terminates in 2035.

Vermont’s State Credits and Rebates

In some states, homeowners have access to a level of rebates or credits that help pay for installations. They’re some of the best ways to support renewable energy. While Vermont doesn’t offer direct financial incentives such as these, they make up for it with a strong net metering regulation.

This type of mandate requires utility companies to reimburse homeowners for any excess solar energy produced each month. Generally, the payment comes in the form of a credit at the utility’s avoided cost rate. However, Vermonters receive much more.

In the Green Mountain State, net metering requires power companies to pay a blended residential rate, which typically ranges between 12 and 15 cents per kWh. This is four to five times more than in most states. While these credits run out at the end of the year, Vermonters will have their utilities practically paid for every month.

An old barn is brought up to date with solar panels on this Vermont farm.
Vermont offers one of the strongest net metering regulations in the country for solar panels.

Solar Panels in Vermont: Government Regulations

The big push for net metering stems from Vermont’s renewable energy standards (RES). We use a state’s RES to determine its willingness to invest in future clean energy.

The Green Mountain State pushes for 55% renewables by 2017 and 4% every year until reaching 75% by 2032. This is a massive effort that began over six years ago and has been going strong ever since. A RES as aggressive as Vermont’s suggests that homeowners can rely on state-supported solar incentives.

One way that government officials are regulating solar energy is through tax exemptions. These make it easy for a state to support renewable infrastructure because it requires no upfront cost.

In Vermont, homeowners benefit from both a sales tax and property tax exemption. Vermonters can expect to save 6% on their installation costs, and around 4% on their increased property value for the next 20 years. Overall, these exemptions save homeowners thousands of dollars.

Should Vermonters Lease Solar?

In many states, residents can opt to lease a solar panel array when it doesn’t make sense to purchase one. While this option disqualifies the system from incentives such as the federal solar tax credit, it allows homeowners to save money on electricity while decreasing their carbon footprint.

Vermont is one of those states that offers solar leasing. And because the traditional electricity rate is one of the highest in the country, most homeowners can expect decent savings on their power bills even after the lease payments.

Another option for accessing solar energy if you can’t purchase a system is community solar. Implemented in 2017, the Green Mountain State has some experience providing public arrays. By paying a small program fee, you can tap into a central solar garden, reducing your electricity bill. 

And Vermont takes their community solar even further, allowing for group net metering. This means that if your solar garden produces excess power, the entire community receives a credit on the next month’s bill.

Solar Panels in Vermont: Incentive Summary

Federal Tax Incentive30% credit
Vermont Tax Credits / RebatesNone / none
Net MeteringNet metering at blended retail rate
Renewable Portfolio Standard55% by 2017, 75% by 2032
Property Tax Exemption100%
Sales Tax Exemption100%
Performance Payment ProgramNone

Frequently Asked Questions

Do you actually save money by going solar in Vermont?

Although Vermont features some of the highest equipment costs and poor sunlight, the low need for power coupled with high traditional electricity rates make solar panels a worthwhile investment. Those purchasing a 6kW system could save over $16,000 in utility offsets over 25 years.

How long does it take for solar panels to pay for themselves in Vermont?

With an average annual electricity bill of $1,330.92, Vermonters could expect to pay off a 6kW solar panel system in about 12.8 years. However, some homeowners in the Green Mountain State can get away with a much smaller array.

How much do solar panels cost in Vermont?

In Vermont, homeowners can expect to spend about $2.85 per watt on solar energy. This equals around $17,100 for a 6kW system. The price can fluctuate depending on a few factors, including sunlight, wattage, type of equipment, installation quality, and available solar incentives.

Can I use the federal tax incentive in Vermont?

Homeowners in Vermont should utilize the federal solar tax credit to lower the cost of their installation. Offering a 30% return on income taxes, those purchasing a 6kW system could save over $5,000 on equipment, labor, and even sales tax.

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