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Get a Free QuoteVermont homeowners pay an average of $0.23/kWh in 2026 — 28% above the national average. Despite having one of the cleanest grids in America (65%+ carbon-free), VT rates keep climbing due to grid modernization costs. Here is exactly what happened, why, and what you can do about it.
Vermont has three major utilities serving different regions. GMP dominates with 75% market share, while BED offers the lowest rates thanks to its 100% renewable portfolio.
~270,000 customers
$0.2200
per kWh (2026)
Market Share: ~75%
~33,000 customers
$0.1900
per kWh (2026)
Market Share: ~12%
~20,000 customers
$0.1800
per kWh (2026)
Market Share: ~7%
Vermont's clean grid paradox
Vermont generates 65%+ of its electricity from carbon-free sources (hydro, nuclear contracts, wind, solar), yet rates keep rising. The driver is not fuel costs but grid modernization: GMP is deploying battery storage, EV charging infrastructure, smart meters, and storm-resilient lines. These capital investments are recovered through rate increases over 20-30 years.
Vermont electricity rates have increased approximately 33% since 2020. While lower than neighboring states, the rate of increase has accelerated in recent years.
| Utility | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 6-Year Change |
|---|---|---|---|---|---|---|---|---|
| GMP | $0.1650 | $0.1710+3.6% | $0.1780+4.1% | $0.1890+6.2% | $0.1980+4.8% | $0.2050+3.5% | $0.2200+7.3% | +33.3% |
| VEC | $0.1480 | $0.1540+4.1% | $0.1600+3.9% | $0.1680+5.0% | $0.1750+4.2% | $0.1810+3.4% | $0.1900+5.0% | +28.4% |
| BED | $0.1440 | $0.1490+3.5% | $0.1550+4.0% | $0.1610+3.9% | $0.1680+4.3% | $0.1720+2.4% | $0.1800+4.7% | +25.0% |
Pre-pandemic baseline: VT avg ~$0.17/kWh. Already lowest in New England thanks to hydro + nuclear contracts.
GMP begins grid modernization plan. Smart meter rollout adds ~$0.005/kWh to delivery charges.
ISO-NE capacity market costs rise, VT imports spike during winter. GMP rate case approved at 5.2% increase.
Storm recovery costs from December 2022 ice storms. GMP requests 6.1% rate increase, PUC approves 5.8%.
Battery storage deployment accelerates — GMP adds 500+ Powerwall installations. Capital costs flow into rates.
GMP files 7.3% increase citing EV infrastructure + grid resilience. PUC approves 5.9%. VEC raises 4.5%.
GMP reaches $0.22/kWh. Grid modernization costs now represent ~15% of total rate. BED stays lowest at $0.18.
Unlike most states where fuel costs drive rate increases, Vermont's rises are driven by infrastructure investment and grid modernization — costs that won't go away.
GMP is investing over $300 million in smart meters, advanced distribution automation, battery storage, and EV charging infrastructure. These capital costs are recovered through rate increases over 20-30 years. Unlike fuel costs, capital spending commitments don't decrease when wholesale energy prices drop.
Vermont has experienced increasingly severe storms — the 2023 floods and ice storms cost utilities tens of millions. GMP's storm hardening program (undergrounding lines, stronger poles, tree trimming) adds ~$0.01/kWh to rates. Climate adaptation is now a permanent cost driver.
GMP is deploying community-scale battery storage and incentivizing residential Powerwalls through its BYOD program. While batteries reduce peak demand imports, the upfront capital costs are spread across all ratepayers. GMP aims for 35 MW of distributed storage by 2027.
Vermont imports 30-40% of its electricity during winter peaks from the ISO-NE grid. Capacity market prices have increased 40%+ since 2020 as New England retires older generators. These import costs are passed directly to VT ratepayers during the months they need the most power.
Vermont relies heavily on hydro from Hydro-Quebec and in-state dams. As legacy contracts expire, renewal prices are higher — reflecting inflation and the increased value of firm, clean power. New hydro contracts signed in 2024-2025 are 20-30% more expensive than the deals they replaced.
Vermont's aggressive electrification push (heat pumps, EVs) is increasing total electricity demand. While this eventually lowers per-unit costs through better grid utilization, the near-term effect is higher peak demand requiring more capacity imports and infrastructure upgrades.
$0.055/kWh
GMP rate increase since 2020. On a 750 kWh/month home, that is $41/month more than 6 years ago.
$495/yr
Annual cost increase for a typical VT home vs. 2020 rates, purely from rate inflation.
$12,375+
Cumulative extra cost over 25 years if rates stay at current levels vs. 2020 rates. Solar locks in your rate at $0.
Based on GMP's filed rate plans, VT PUC proceedings, and infrastructure investment timelines, here is what Vermont ratepayers should expect.
Next annual rate case expected to request 5-7% increase. Grid modernization Phase 2 costs begin flowing into rates.
Board-approved rate adjustment of 4-5% expected. Northern VT transmission upgrades driving costs.
Burlington city council reviewing 3-4% increase. BED benefits from owned generation but faces transmission cost increases.
ISO-NE capacity costs continue rising. Vermont winter imports become more expensive as regional generators retire.
GMP's $300M grid modernization has 15+ years of cost recovery remaining. Annual 3-5% rate increases are effectively locked in.
VT rates projected to reach $0.28-0.30/kWh by 2030. Electrification + grid investment + hydro contract renewals all push higher.
Bottom Line on VT Rate Forecasts
Vermont's clean grid does not protect against rate increases. Grid modernization, storm recovery, and hydro contract renewals are permanent cost drivers. GMP rates are projected to reach $0.28-0.30/kWh by 2030. Solar with 1:1 net metering is the only way for homeowners to lock in a $0/kWh electricity cost.
Every kWh your solar panels generate avoids the full retail rate. With Vermont's 1:1 net metering, every kWh has full value — and savings grow every time rates increase.
| System Size | Annual kWh | Bill Offset | Monthly Savings | Annual Savings | 25-Year Savings | Payback (No ITC) |
|---|---|---|---|---|---|---|
| 6 kW | 6,600 | 82% | $148 | $1,776 | $44,400 | 14.5 years |
| 8 kW | 8,800 | 87% | $200 | $2,400 | $60,000 | 13.6 years |
| 10 kW | 11,000 | 90% | $261 | $3,132 | $78,300 | 12.8 years |
| 13 kW | 14,300 | 93% | $344 | $4,128 | $103,200 | 12.2 years |
Based on $3.25/W system cost (VT average), $0.23/kWh rate, 1,100 kWh/kW annual production, no federal ITC (expired 2025), 1:1 net metering.
Vermont's 1:1 retail credit net metering means every kWh your solar generates is worth the full retail rate — currently $0.22-0.23/kWh. Unlike states that reduced net metering credits (MA, RI), Vermont solar owners get full value. This makes VT solar economics among the best in New England when combined with GMP's battery program.
GMP's Bring Your Own Device (BYOD) program pays $850-$950/year for enrolled batteries. GMP dispatches your battery during grid peaks, reducing Vermont's expensive ISO-NE imports. Combined with solar savings, a battery effectively pays for itself in 7-9 years while providing backup power during VT's frequent winter outages.
$0.23/kWh
Current VT Rate
Every kWh your solar generates is worth $0.23 in avoided electricity costs. Six years ago, it was worth only $0.17.
12-14 yrs
Payback Period
Without the federal ITC (expired 2025), VT's 1:1 net metering and GMP battery program bring payback under 14 years for most homes.
$63K+
25-Year Savings
A 10 kW system at current rates saves $63,000+ over its lifetime. If rates rise 4%/year, that climbs to $90,000+.
For a 10 kW system producing 11,000 kWh/year:
Rate increase scenarios (25-year impact):
Every month you wait, you pay another $170-350 in electricity costs that solar could eliminate. Get a personalized solar estimate for your VT home in under 2 minutes.
No sales calls. Instant online estimate. See your exact savings at current VT rates.