You’ve got to love Vermont. It may be small, northerly, and occasionally dull, but when it comes to solar power, it packs a punch well above its weight.
Perhaps it’s because us Vermonters have always been keen to lead the pack.
That’s certainly what we’ve been doing when it comes to clean energy. We have one of the highest targets for greening our electricity, aiming for 55% by 2017, and shooting up to 90% by 2050.
And solar is going stratospheric here in Vermont, too.The Green Mountain State has nearly doubled its installed solar power over the last year, to over 100 MW. That’s five times what they have in Maine.
The reason? Solar makes money in Vermont. Lots of money. And it’s not because of the bucket-loads sunshine we get here (a clue - we don’t).
Put those two things together, and solar panels on your roof become as about as sweet as maple syrup, financially speaking.
We’re talking tens of thousands of dollars to be earned, both in savings and incentives.
We’re talking “why you haven’t already got the best solar panels up there already?”
There’s plenty of choice for getting your solar investment off to head-start here in Vermont, too. And a number of different packages that can be tailored to suit your financial needs.
You might want to own. You might want to lease. You might want a loan. Or even to try out the hassle-free, zero-down option of a PPA. Most likely, perhaps,is that aren’t quite sure how to choose.
And we’ll start by giving you some numbers for the simple case of buying those shiny blue-black panels outright.
Vermont Solar Power: Check your Savings, Costs, Tax Breaks, Incentives and Rebates
Return on Investment for Residential Solar Power in Vermont
So how much do solar panels cost and how much money can you make from switching to sun power in the Green Mountain State?
Well, we’ll need to start somewhere, and Burlington is as good a place as any. A decent average-size system will see 5kW of solar panels put on a roof for around $15,000.
Then it’s down to the sun to work its magic. In Burlington, the long-term utility bill savings (over 25 years) stack up to quite a pile of dollars. A pile about $28,000 high.
And we haven’t even started looking at how we can slash your $15,000 sticker price yet.
Let’s get on with shrinking your outlay (and boosting your returns even more).
Buying a 5KW Solar System—a Vermont case study
Costs for installing solar PV panels have come down fast in the last few years. Where once you might have been looking at $20,000 for a 5kW solar system, today it’s closer to $15,000.
What do you get for those dollars?
- Well, an average of 17 kWh of clean, green electricity, per day, for starters.
- In your first year that adds up to 6,240 kWh of power your home has generated for you.
- Given an average Vermonter only uses 7,100 kWh, that’s a 90% cut to your bill!
Great for your bank balance, for Vermont’s air quality, and most of all for our planet.
But what about that $15,000 outlay? Let’s see if we can cut that down a little.
- Start with your $15,000 sticker price, before tax.
- Now,Vermont has 6% sale tax. But that’s not for your panels.You’ll dodge $900 thanks to the state’s solar sale tax exemption.
- Then there’s the federal Income Tax Credit (ITC)that your solar system qualifies for. At 30% that brings us down to $10k net cost.
- And your first year will also see $840 lopped off of your utility bill.
- So you’ll only have paid out a net $9,160 in those first 12 months.
Even without those performance-incentives, though, we’re looking at a rate of return of 7.8% over 25 years. Good by any standard.
Even without those performance-incentives, though, we’re looking at a rate of return of 7.8% over 25 years. Good by any standard.
Vermont Solar Power Incentives, Tax Breaks and Rebates
Vermont is a state that is clearly cheerleading the renewables revolution.
There’s been a strong renewables target for decades (though it wasn’t an actual RPS —see below) and plenty of incentives and support have helped to push things forward.
While there aren’t measures focused only on solar, it’s all been enough to make investing in the sun financially very attractive.
And residential solar power has really taken off, all over the Green Mountain state, in the last few years.
When is an RPS not an RPS?
When it’s Vermont’s SPEED (Sustainably Priced Energy Enterprise Development) program.
But since June 2015, SPEED has been replaced by RES (Renewable Energy Standard), a program with real teeth.
Those in the know are now happy to call it an RPS. What matters is that the targets—of 45% renewables by 2017 and 90% by 2050—are enforced by penalty payments on the utilities, if they’re missed.
That means that the power companies in Vermont are even more firmly on-board the renewables rail wagon
What is an RPS really?
You’ll often hear the letters ‘RPS’ thrown about when talking about solar energy.
But what exactly is a ‘Renewable Portfolio Standard’?
Basically, it’s a state law setting binding targets for clean energy. RPS have been really useful in getting the utilities to take renewable energy generation seriously.
When a state sets an RPS target, it’s saying that utilities must generate a certain amount of their electricity from renewable sources, usually by a certain date. If not, they’ll be fined.
After all, power companies need a push. Most still make money selling us more and more energy. They’re not best pleased that we’re starting to generate our own power.
They avoid the fine, and you get the low-cost solar power. Without an RPS, utilities are less likely to help with solar or wind power for their customers.
Vermont tax credit
There’s no state income tax credit (ITC) in Vermont, but that doesn’t stop you from claiming your 30% federal ITC, handily felling the cost of a solar system in one swoop.
There’s no cap on the federal ITC either.
Are there any Rebates for Solar Power in Vermont?
Yes, once upon a time. And at a hefty $250 per kW of installed capacity of your new solar power system. That would see you pocket $1,250 for our example 5 kW system.
But these rebates are no longer in play, since the big changes introduced in 2015.
Vermont Tax Exemptions
Yes, as we’ve already mentioned, and both the sales tax exemption and the property tax exemptions apply at the state level.
They were put in place in 2013.
Just make sure your local municipality hasn’t taken a different view of their property taxes, as they can opt-out of this measure.
Vermont Electricity Rates
Electricity costs in Vermont have long been ahead of those in many other states. In 2014 the state-wide average was 17.5 cents per kWh.
The average U.S. family pays out only 12.5 c/kWh to power their homes, 30% less.
Bad news for Vermonters who haven’t seen the (sun) light. But good news for those making the switch—higher bills means higher savings means better rates of return for your investment.
Is there Net Metering in Vermont?
Yes, and it’s a flavor of Net Metering that works well for homeowners (see next for an explanation of Net Metering’s ins-and-outs). First set out in 1998, the most recent version goes back to 2014.
It means that any electricity you export to the grid, because you’re using less than your system is producing, is credited at the retail rate (i.e. the rate you pay).
There are a couple of problems, one minor, one bigger.
First, you can’t bank on energy credits over a cycle longer than 12 months. That could be a pain if you have a system that’s slightly over-sized for your property. Some homeowners do this so that the whole of their electricity demand is met by solar.
The 12-month limit could see you lose out on a few credits, if you decide to super-size your system.
The bigger problem is that Net Metering is capped to a limit of 15% of the utility’s peak demand.
Already that limit has been approached (or reached) in some areas, meaning some people won’t benefit from Net Metering at all.
Another good reason to move fast on solar.
If watching your meter spin backwards sounds like fun, we can help make it happen.
What's net metering anyways?
Net metering is a vital part of making solar power work for homeowners.
It means little is wasted, even when the power you generate, and the power you use, aren’t exactly balanced.
That’s important because the electricity your system produces varies as the sun moves round the sky. When the sun is highest in summer you may actually produce more electricity than you use.
Rather than letting that spare power go to waste, Net Metering means your meter effectively spins backwards.
And as it spins, it earns money for you.
Your utility has to pay you for the energy you’re supplying to them under Net Metering.
Often this is at the retail electricity rate, the rate you normally pay them. Welcome to the wonderful world of energy independence!
Are there 0 down payment financing Options in Vermont?
Yes, the whole range of pay-nothing-now options are available in Vermont — from loans to leases to power purchase agreements (PPAs).
These are increasingly popular, and offer a great way to leverage your solar investment—or simply to power your home with green energy without spending big wedges of greenback.
Each has advantages and disadvantages, though. Let’s take a look at which might best suit you.
Solar Lease in Vermont?
Leasing works wonders for those who can’t tap the equity in their home for a loan. Or those who can’t access the upfront cash for a purchase. A lease lets you put $0 down, get those panels on your roof, and then watch the savings roll in.
The savings won’t be as impressive as using your own money. But because the rates in Vermont are so high — and the sun resource no slouch — you’ll still be saving from day one of your lease.
One thing to check is your performance-guarantee clause.
Solar Power Loan?
If you’d prefer to own your solar panels, for only a small (or even no) outlay, then a solar loan makes sense.
This way you’ll get better rates of return, especially if you can tap a home-equity line of credit.
You’ll soon be solar powered, and you won’t have to raid your cash savings.
If you’re a taxpayer, you’ll also benefit from the federal ITC. With most solar loans easily funded from the 25 years or more of bill savings, interest rates are often low.
You will, however, be on the line for any maintenance or cleaning your panels will need.
PPA Option on Vermont?
This is the other approach for going solar with no (or little) upfront cost.
You will find the savings are quite a lot less than with purchases or loans. But again Vermont’s high rates mean those savings start from the moment the first rays hit those panels.
What is PPA?
A Power Purchase Agreement, or PPA, is an agreement between you and your solar panel provider. You provide them with the roof for the panels. They provide you with power at a guaranteed price.
Like a lease, you’ll benefit from solar power without worrying about details like planning, installation, equipment upgrades, maintenance, and cleaning.
Most PPAs also have an option for you to buy the system at the end of the contract, which can increase the value of your home.
One thing to look out for here is the PPA price escalator. This is where the PPA price rises gradually throughout your PPA contract, according to an agreed schedule.
These escalators are a reasonable way for the solar panel company to take gradual performance and maintenance issues into account over its lifetime.
Just make sure your PPA escalator isn’t too steep. It should be much less than expected utility rate rises.
If a PPA sounds like your sort of deal, now’s the time to lock those savings in.
Is there Feed In Tariff in Vermont?
There was a Feed In tariff a few years back, but this was fully-subscribed by 2012.
It’s now closed to new solar generators, whether homeowners or independent power producers.
Leasing vs Purchasing: What's best for Vermont Homeowners?
As with many things, the choice between leasing and purchasing depends on how you see risk and reward. And on how much skin you want in the solar game.
Leasing works well for the risk adverse. For those who want to help clean up our energy, and cut pollution, but without taking on the hassles (and big initial outlay) of purchase.
Purchasing is good for those with the money to invest.
For those who also want to make the most of the benefits and incentives out there for switching onto the sun.
But because those returns really are so good (thanks to high utility rates) a lease can also see you make savings throughout your lease period. Just not as big.
What is the Solar Panel Installation Process in Vermont?
The solar installation process starts with home visit by an energy assessment team. They’ll talk to you about your bills, how best to site your system, and the financial options available.
Once they’ve got the measure of your place, and found out exactly what your needs are, they’ll be provide you with a fully detailed PV quote. This will highlight potential tax rebates, breaks, and incentives that may be available to you.
They’ll also give you detailed breakdown of the savings you can expect to make.
Once you’ve agreed and signed your agreement, the solar installation team can schedule a date for transforming your house from energy sink into a solar-powered energy producer! The installation process usually only takes three to four days.
- Fill in our simple solar form
- Receive quotes from the best local solar suppliers
- Choose the best money-saving solar option for you
- Once your system is installed, just sit back, relax—and watch the savings roll in
While Vermont is never going to become a solar superstar like California or New Mexico, it does have enough sun—and a forward-thinking enough administration—to make solar generation a big winner.
It has bold targets to push the utilities forward, and it’s helping homeowners out with tax exemptions and a strong Net Metering scheme.
But timing is critical. With schemes getting full, incentives getting lowered, and electric rates still rising, now is the time to seize the moment—and get ready to go solar.
We’ll then be able to connect you with tried-and-trusted Vermont solar installers who’ll get you rolling towards the solar sunrise in no time