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Vermont's net metering is the single biggest factor in your solar ROI. The PUC has cut rates 7 consecutive years. Category I is still positive but shrinking fast. Virtual NM is dead. Here is everything you need to know.
Blended Rate
$0.1839
/kWh base
Cat I Effective
$0.1439
/kWh new systems
Rate Cuts
7
consecutive years
Virtual NM
DEAD
H.289, Jan 2025
VT PUC has cut net metering rates 7 consecutive years. Every year you wait, the economics get worse. Lock in current rates before the next annual reduction.
Vermont assigns every solar system to one of four categories based on size and site type. The adjustor determines how much your NM credit rate deviates from the base blended rate.
| Category | Size Range | Adjustor | Effective Rate | Duration | Site Type |
|---|---|---|---|---|---|
| Category IRESIDENTIAL | ≤15 kW | +$0.04/kWh | $0.2239/kWh | 10 years from interconnection | Any site |
| Category II | >15–150 kW | $-0.04/kWh | $0.1439/kWh | Perpetual (life of system) | Preferred site |
| Category III | >150–500 kW | $-0.07/kWh | $0.1139/kWh | Perpetual (life of system) | Preferred site |
| Category IV | >15–500 kW | $-0.08/kWh | $0.1039/kWh | Perpetual (life of system) | Non-preferred site (ground-mount on open land) |
Base blended rate: $0.1839/kWh. Adjustor values are approximate and reflect the most recent PUC determination. Rates are locked from interconnection date for the specified duration. Category I is the only one with a positive adjustor.
For residential homeowners, Category I is the only category that makes strong financial sense. Here is why.
Positive adjustor
The ONLY category where credits exceed the blended rate. Adds ~$0.04/kWh to the base.
10-year rate lock
Your adjustor is frozen from interconnection date, protecting against annual PUC cuts.
Any site type
Rooftop, ground-mount, carport — no preferred site restriction.
Up to 15 kW
Covers virtually all residential systems. Most VT homes install 8-12 kW.
Simplified CPG
Systems under 15 kW use the streamlined registration process (2-4 weeks vs. months).
Negative adjustors
Credits BELOW the blended rate. Cat II: -$0.04, Cat III: -$0.07, Cat IV: -$0.08/kWh.
Perpetual (not 10-year lock)
The negative adjustor is permanent for the life of the system. No reset or improvement.
Preferred site required (II-III)
Must be on rooftop, parking canopy, brownfield, or other preferred site. Not open land.
Worst economics: Cat IV
Non-preferred site (open land ground-mount) gets the steepest negative adjustor at -$0.08/kWh.
The Vermont Public Utility Commission has reduced the net metering adjustor every year since 2019. This is the worst net metering trend in New England. Here is what it means.
Early Systems (~2019)
~$0.08/kWh
Cat I adjustor locked at higher level
New Systems (2026)
~$0.04/kWh
Cat I adjustor — roughly half of 2019 level
Each year the PUC reviews and typically reduces the adjustor. A system installed in 2019 has a $0.08/kWh advantage locked for 10 years. A system installed today locks in ~$0.04/kWh. A system installed in 2027 will likely lock in even less. This creates real urgency for homeowners considering solar.
Existing systems keep their locked adjustor until the 10-year period expires. A 2019 system keeps its ~$0.08/kWh adjustor until 2029. After that, it resets to whatever the then-current adjustor is (likely much lower). This is why batteries become increasingly valuable for older solar systems approaching their adjustor reset.
Yes. At the current pace of annual cuts, the Category I adjustor could reach zero within a few years. If it goes negative, new residential systems would receive NM credits below the blended rate, significantly extending payback. This is not hypothetical — Categories II-IV already have negative adjustors. Installing sooner locks in a higher rate.
H.289 killed virtual net metering in Vermont effective January 1, 2025. This also killed community solar.
PHASED OUT by H.289 (Jan 1, 2025). No new virtual net metering arrangements permitted.
Vermont's community solar model relied on virtual net metering to distribute credits to subscribers. H.289 (signed 2024, effective Jan 1, 2025) eliminated new virtual net metering arrangements, effectively killing the community solar pipeline. Existing projects may continue under legacy terms until their contracts expire.
What This Means for Renters and Non-Rooftop Owners
If you cannot install solar on your own roof (renters, condo owners, shaded properties), Vermont no longer has a community solar option. Your alternatives are: (1) A solar lease/PPA on a compatible building you own, (2) Waiting for HEAR heat pump rebates to reduce energy costs without solar, or (3) GMP battery program for backup and VPP participation (does not require solar).
Vermont is the only New England state that requires Public Utility Commission approval for all solar installations. Here is what you need to know.
Impact on timeline: The CPG requirement adds 2-4 weeks to residential projects beyond what other states require. Factor this into your planning, especially if targeting the Section 48/48E deadline (July 4, 2026) for a PPA/lease. Start the process by April 2026 at the latest.
Understanding the mechanics of VT net metering credits, monthly billing, and annual true-up.
Your solar system produces electricity throughout the day. When you produce more than you consume, the excess flows to the grid. When you consume more than you produce (evening, cloudy days), you draw from the grid normally.
At the end of each billing cycle, your utility calculates net excess generation. Each excess kWh earns a credit at the effective NM rate (blended rate +/- adjustor). For Cat I, that is approximately $0.1439/kWh for new 2026 installations.
In months when you generate more than you use (typically May-September), credits accumulate and carry forward to months when you generate less (November-February). This is critical in Vermont where winter production drops significantly.
At your annual anniversary (or April for GMP customers), any remaining credits are handled per your utility policy. GMP customers can bank credits indefinitely. You always pay the minimum customer charge (~$20/month) regardless of your credit balance.
Self-consumed electricity saves you the full retail rate ($0.2146/kWh for GMP). Exported electricity earns only the NM rate (~$0.1439/kWh). This gap is why maximizing self-consumption (batteries, heat pumps, EV charging) improves your economics.
Vermont's Renewable Energy Standard and H.289 legislation shape the future of solar in the state.
Tier I: Total Renewable
63% now, 100% by 2030 (utilities >100K customers) / 2035 (all utilities)
Tier II: Distributed Generation
5.8% now, 20% by 2032
VT's aggressive RES targets, especially Tier II (20% distributed by 2032), create utility demand for in-state solar. However, H.289 simultaneously killed virtual NM and community solar, concentrating benefits on behind-the-meter installations.
Accelerated RES targets to 100% by 2030/2035
Eliminated new virtual net metering (Jan 1, 2025)
Effectively killed community solar pipeline
Concentrates solar benefits on behind-the-meter installations
Everything you need to know about how net metering works in Vermont in 2026.
Net metering in Vermont allows solar customers to receive bill credits for excess electricity sent to the grid. Vermont uses a category-based system (I through IV) with different credit rates depending on system size and site type. Credits are calculated as the blended retail rate plus or minus a category-specific adjustor. All installations require a Certificate of Public Good (CPG) from the VT PUC.
The base blended retail rate used for VT net metering credit calculations is $0.1839/kWh as of 2026. This is not the same as your retail utility rate (GMP charges $0.2146/kWh retail). The blended rate is a PUC-calculated average across all VT utilities and rate components. Category adjustors are then added to (Cat I) or subtracted from (Cat II-IV) this blended rate.
The Vermont Public Utility Commission has reduced net metering adjustors for 7 consecutive years. Each year, the positive adjustor for Category I (residential) gets smaller, and the negative adjustors for Categories II-IV get larger. This is the worst net metering trend in New England. When you install solar, your adjustor is locked for 10 years (Cat I), which protects you from future cuts during that period.
A Certificate of Public Good is a permit issued by the Vermont Public Utility Commission required for ALL solar installations in the state. This is unique to Vermont — no other New England state requires PUC-level approval for residential solar. For systems under 15 kW, the process is streamlined (registration vs. full application). Your installer handles the CPG filing. Typical timeline: 2-4 weeks for residential systems.
No. Virtual net metering was phased out by H.289, effective January 1, 2025. No new virtual net metering arrangements are permitted. This also effectively killed community solar in Vermont, which relied on virtual NM to distribute credits to subscribers. Existing virtual NM arrangements may continue under legacy terms until their contracts expire.
Category I (systems up to 15 kW, any site type) is the best for residential homeowners. It is the only category with a positive adjustor, meaning your NM credit rate exceeds the blended retail rate. The positive adjustor is locked for 10 years from interconnection. Categories II-IV have negative adjustors (credits below blended rate) and are designed for larger commercial and ground-mount systems.
Net metering credits appear as a line item on your monthly utility bill. In months when you produce more than you consume, the excess becomes a credit that rolls forward to the following month. At your annual true-up (typically April), any remaining credits are handled according to your utility's policy. GMP customers can bank credits indefinitely. You always pay a minimum monthly customer charge (~$20) regardless of credits.
Systems installed before the PUC began cutting rates have higher locked adjustors. A system installed in 2019 might have a Cat I adjustor of $0.08/kWh, while a new 2026 installation gets approximately $0.04/kWh. Both are locked for 10 years from their respective interconnection dates. Legacy systems keep their higher rates until their 10-year lock expires, at which point they reset to the then-current adjustor.
H.289 (signed 2024) had two major impacts: (1) It eliminated new virtual net metering arrangements effective January 1, 2025, killing community solar. (2) It accelerated the Renewable Energy Standard (RES) targets — 100% renewable by 2030 for large utilities and 2035 for all utilities. The RES acceleration creates utility demand for in-state solar but the virtual NM elimination concentrates benefits on behind-the-meter installations.
Technically yes, but it is not economically optimal. Category I applies to systems up to 15 kW. If you oversize beyond your consumption, excess credits accumulate but are valued at the NM rate (not full retail). Since the NM rate ($0.1439/kWh effective for Cat I) is less than retail ($0.2146/kWh for GMP), every kWh exported earns less than a kWh self-consumed. Target 90-100% of your usage for optimal economics.
After 10 years, your Category I adjustor resets to whatever the current adjustor is at that time. Given that the PUC has cut rates 7 consecutive years, the future adjustor could be zero or even negative. However, by that point your system will have been in payback territory for years, and rising retail rates (2-3%/year) still make self-consumed solar valuable. The NM export portion becomes less valuable, making batteries more attractive for maximizing self-consumption.
Net metering is just one piece of the VT solar puzzle.
City-by-city pricing for all 8 VT markets
Read moreHow VT solar works with no federal ITC
Read morePowerwall lease, BYOD, and VPP details
Read moreSales tax and property tax savings
Read moreWhich financing option saves most in VT?
Read moreSee exact pricing for your roof and utility
Read moreEvery year you wait, the Cat I adjustor gets smaller. Get a quote now to see your projected NM credits at today's rates, locked for 10 years.
7 years of rate cuts and counting. The best NM rate you will ever get is today's rate.