Renewable Portfolio Standards
Vermont set itself a steep goal of 55% renewable energy production by 2017, one of the highest percentages of any state’s Renewable Portfolio Standards (RPS). These standards set a goal for how much of a state’s total energy needs must be met by renewable sources. Utility companies pay fees if they miss the deadline, motivating them to offer deals. In Vermont, the target increases 4% every three years until 75% is achieved by 2032.
In a ranking of how much each state pays for electricity, Vermont ranks seventh highest. This alone makes the state a smart place to go solar.
The state has great net metering laws. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the power they get from the utility with credits they earn with their own energy system. If your system produces more power than you need, the excess power is sold to the grid, which you see as a credit on your electric bill.
Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. They make installation easier and usually less expensive, and net metering is more reliable too. The standards in Vermont are decent and statewide.
Performance-Based Incentives (PBI)
Vermont offers PBIs, which are incentives based on the actual power your system generates. Vermont calls them Solar Power Performance Payments. You are paid based on the actual kilowatt-hours (kWh) or BTUs generated by your renewal-energy system. The power produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.
Sales Tax Exemption
Pay no sales tax on the cost of an installed solar power system in Vermont.
Property Tax Exemption
In Vermont, the value of your home will not be reassessed after the addition of a solar system. You continue to pay property tax based on the value before adding the system. That’s good because it’s estimated that in Vermont, a 5kW system increases the value of your home close to $17,000.
Federal Tax Credit
On top of these great rebates and exemptions for you living in Vermont, you also qualify for the great tax credit from the Federal government. The Investment Tax Credit (ITC) is now worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, then all of the incentives go to the third-party owner. That’s a great reason to buy rather than lease.