Vermont’s commitment to renewable energy and supportive policies make it ideal for using solar power. According to the Solar Energy Industries Association, Vermont has invested over $800 million in solar energy initiatives. the state provides numerous incentives to help make solar more affordable for homeowners. Our guide details the key programs in the Green Mountain state and recommends top solar companies to help you access these incentives.

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How Does the Federal Solar Tax Credit Work?

Every Vermont homeowner who owns their system qualifies for the federal solar investment tax credit (ITC). This reduces the amount of federal taxes you owe at tax time at a rate equal to 30% of your solar installation costs. If you owe less than the credited amount, it can roll over to the next tax period. This credit decreases to 26% in 2033 and 22% in 2034.

Customers who lease their solar panels or enter into a power purchase agreement (PPA) do not qualify for this credit because they don’t own the system. for more information, read our detailed guide on the federal solar tax credit.

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Is Net Metering Available in Vermont?

Vermont is working to reduce statewide emissions through a Renewable Portfolio Standard (RPS) goal that mandates 75% clean power generation by 2032. The state has a favorable net metering policy to help reach this target. Homeowners with renewable generation systems can send excess energy their systems generate to the grid for electricity bill credits.

Green Mountain Power has the largest net metering program in Vermont and provides energy credits at 18.035 cents per kWh. This buyback rate is close to the average electric rate for Vermont residents at 19.26 cents.

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How Much Does Solar Energy Cost in Vermont?

The average cost of solar panels nationwide is roughly $17,640 for a 6-kW system. This price is before applying any solar incentives. Most installation companies sell solar panel systems based on their wattage, with the average price being $3–$4 per watt. According to EnergySage, the average price of a 6-kW system in Vermont is $18,840. Applying the federal solar tax credit reduces this price by $5,652.

Your total cost and return on investment (ROI) depends on your chosen payment method. We’ve detailed each solar financing option below.

• Cash purchase: An up-front cash payment offers the best ROI and long-term savings. Paying for the system outright eliminates interest rates, credit checks, and loan fees. You also qualify for solar incentives and credits since you own the system.
• Solar loan: A solar loan is the second-best payment option. You own your solar system while making monthly payments over a fixed period, but you’ll pay more for the system due to interest rates.
• Solar lease: A solar lease lets you rent the system rather than buy it. This payment option is best for homeowners who don’t qualify for loans or can’t afford a large up-front cash payment. However, a solar lease disqualifies you from incentives since the solar company owns the system. It also doesn’t increase your home value like a cash purchase or loan.
• Power purchase agreement (PPA): A PPA involves only paying for your monthly energy use. Think of it as if you’re still paying your regular energy bill but for solar energy. Many solar companies include system maintenance and repairs with PPAs, but you won’t own the system and can’t take advantage of tax rebates or other incentives.

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Is Going Solar in Vermont Worth It?

Installing solar panels is a large investment but can return big savings. Solar panels are worth it in Vermont because of its many incentives and favorable climate. The average payback period for a solar system is between six and 10 years. The state’s net-metering program may even allow you to generate additional savings and income after passing your payback period.

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Our Conclusion

Vermont offers many incentives to make going solar more affordable. Our guide covers the most significant incentive programs, but smaller city- or municipality-specific incentives may be worth exploring. We recommend checking the Database of State Incentives for Renewables and Efficiency (DSIRE) for more information.

Use our tool below to connect with top solar installation companies. You can also read our guide on the best solar companies in Vermont to determine which provider best matches your needs.

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FAQ About Solar Tax Incentives in Vermont

Do solar panels need maintenance?

Yes, solar panels need occasional maintenance. You should have your system serviced every one to two years to ensure it’s operating efficiently and safely.

Do solar panels work in the winter?

Solar panels can still turn sunlight into electricity during winter. Solar panels absorb energy from the sun’s light, not the sun’s heat.

How cold is too cold for solar panels?

There isn’t a specific “too cold” temperature for solar panels, but extreme temperatures might cause issues. Some solar power systems drop in performance when the temperature dips below 41 degrees Fahrenheit.

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Our Rating Methodology

We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

• Solar equipment, installation, and services (25%)
• Warranty and performance guarantees (25%)
• Brand reputation and certifications (15%)
• Financing options (15%)
• Experience (10%)
• Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.

To share feedback or ask a question about this article, send a note to our Reviews team at [email protected].