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Vermont has the weakest solar incentive stack in New England. No state rebate, no SREC, declining net metering, and the lowest electricity rates in the region. Here is exactly what you get, what you do not get, and whether solar still makes sense.
6%
Sales Tax Exempt
$0.22/kWh
Avg Electric Rate
7yr decline
Net Metering Trend
~13 yrs
Avg Payback
Vermont homeowners no longer receive a federal solar tax credit (Section 25D expired Dec 31, 2025), and Vermont has never offered a state solar rebate. What remains: 6% sales tax exemption (~$1,770 on a 10 kW system), permanent property tax exemption for systems under 50 kW, declining net metering credits (~90% of retail, cut 7 consecutive years), and the GMP Battery Program (VPP credits ~$850/yr). No SREC, no production incentive. Payback is approximately 13 years — the longest in New England — but panels last 25+ years, delivering 12+ years of free electricity after breakeven.
Vermont has fewer active solar incentives than any other New England state. Here is everything that remains — and what is gone.
~90% retail
Positive adjustor for residential systems under 15 kW, but VT PUC has cut rates 7 consecutive years. Lock in now before the next cut.
~$2,220/yr (GMP 10 kW)
6% saved
Solar equipment, labor, and battery storage are 100% exempt from VT 6% sales and use tax. Automatic at point of sale.
~$1,770 on a 10 kW system
100% exempt
Under 32 V.S.A. Section 3802, solar systems under 50 kW are fully exempt from property tax. Permanent — no expiration.
~$529/yr permanently
Lease or BYOD
Nationally unique virtual power plant. GMP customers can lease a Powerwall ($0 down) or bring your own device for annual credits.
~$850/yr (Powerwall)
30%+ ITC
Third-party system owners (lease/PPA companies) claim 30% commercial ITC. The homeowner does not claim this directly.
Lower PPA/lease rate
$0
Expired December 31, 2025. No federal credit for homeowner cash or loan purchases.
DEAD
H.289 phased out virtual net metering as of January 1, 2025. No new VNM arrangements permitted.
EFFECTIVELY DEAD
No new community solar projects can be developed under current VT PUC rules. Existing subscribers grandfathered.
Let us be direct: Vermont has the weakest solar incentive environment in New England. While every other state in the region offers either a state rebate, a production incentive (like MA's SMART at $0.03/kWh or RI's REG at $0.27/kWh), or strong net metering — Vermont offers none of these.
The fundamental problem is electricity rates. Vermont's average rate of $0.22/kWh is the lowest in New England. That sounds like good news for consumers, but it is bad news for solar economics — because each kWh your panels produce offsets cheaper grid power. In Connecticut ($0.27-$0.28/kWh) or Massachusetts ($0.28-$0.32/kWh), those same panels save you 25-45% more per kWh.
On top of that, the VT Public Utility Commission has cut net metering credit rates 7 consecutive years. This is the worst net metering trend in all of New England. The trend shows no sign of stopping — every year you wait, the economics get slightly worse.
Any solar company telling you the "30% federal tax credit is still available" for homeowner-owned systems is either uninformed or deliberately misleading you. Section 25D expired on December 31, 2025. If a solar salesperson claims otherwise, walk away.
Exception: Section 48/48E commercial credits are still available for third-party system owners (solar lease and PPA companies) on projects beginning construction before July 4, 2026.
The 6% sales tax exemption saves ~$1,770 upfront on a 10 kW system. The permanent property tax exemption saves ~$529/year — that is $13,225 over 25 years. These are guaranteed, automatic, and require no application.
GMP's virtual power plant lets you lease a Powerwall for $0 down or bring your own battery for ~$850/year in credits. No other New England utility offers anything comparable. This significantly improves solar+battery economics.
Even with a ~13-year payback, panels last 25-30+ years. That is 12-17 years of free electricity after breakeven. If rates rise (they always do), the returns accelerate. Vermont solar is a slow-burn investment, not a quick win.
Vermont's net metering program is the primary financial mechanism for residential solar, but it is under constant pressure from the VT Public Utility Commission. The adjustor has been cut 7 consecutive years, making the effective credit approximately 90% of the blended retail rate for Category I systems.
The VT PUC reviews net metering rates annually and has reduced the adjustor every year since 2017. Early adopters locked in higher rates. If you are considering solar, the window to lock in current rates is closing — every year you wait, the NM credit you receive will be lower.
Retail rate: $0.2146/kWh
Effective NM credit: ~$0.1931/kWh
10 kW system, GMP territory: ~$2,220/yr in annual savings.
Retail rate: $0.2348/kWh
Effective NM credit: ~$0.2113/kWh
10 kW system, VEC territory: ~$2,430/yr in annual savings.
Retail rate: $0.1837/kWh
Effective NM credit: ~$0.1653/kWh
10 kW system, BED territory: ~$1,901/yr in annual savings.
With no state rebate, no SREC, and declining net metering, Vermont's sales and property tax exemptions are actually the most reliable incentives available. They are automatic, permanent (property tax), and require no application.
Vermont exempts solar energy systems from the state's 6% sales and use tax. This applies to solar panels, inverters, racking, wiring, labor, and battery storage systems.
10 kW system at $2.95/W = $29,500. Without exemption:
$29,500 x 6% = $1,770 in sales tax
With the exemption, you pay $0.
Under 32 V.S.A. Section 3802, solar systems under 50 kW are fully exempt from property tax. This is permanent — no expiration. Solar adds home value without increasing your tax bill.
At VT avg property tax rate (~1.89%), a $28,000 added value:
$28,000 x 1.89% = $529/yr saved permanently
Over 25 years: ~$13,225 saved
Green Mountain Power's Battery Program is the one area where Vermont is genuinely ahead of other states. This nationally unique virtual power plant (VPP) lets GMP customers access battery storage at minimal or no cost, while earning annual bill credits.
GMP customers only. The Battery Program is exclusively for Green Mountain Power territory (~75% of VT). Vermont Electric Cooperative and Burlington Electric Department do not offer a comparable program. If you are a VEC or BED customer, battery storage still provides backup power but does not earn VPP credits.
While homeowners can no longer claim a federal tax credit on purchased solar, third-party ownership (lease/PPA) retains a narrow federal advantage through July 4, 2026.
Deadline: July 4, 2026 — Projects must begin construction before this date
After July 4, 2026, the Section 48/48E commercial ITC will no longer be available for new residential solar projects. Lease/PPA pricing will likely increase.
In Vermont, a lease or PPA makes more sense than in high-rate states because:
Vermont has three main electric providers. GMP dominates with ~75% market share and offers the only battery VPP program.
| Feature | GMP | VEC | BED |
|---|---|---|---|
| Coverage | ~75% of VT | ~10% (rural) | ~5% (Burlington) |
| Avg Rate | $0.2146/kWh | $0.2348/kWh | $0.1837/kWh |
| Net Metering | Cat I adjustor | Cat I adjustor | Cat I adjustor |
| TOU Rate | Yes — $0.34 peak | No | No |
| Battery Program | VPP (~$850/yr) | No | No |
| Annual Savings (10 kW) | ~$2,220 | ~$2,430 | ~$1,901 |
| Payback | ~13 years | ~12 years | ~15 years |
| CPG Required | Yes | Yes | Yes |
Adjust system size, utility, and battery to see the honest math. This calculator shows both what Vermont offers and the $0 rows for programs that do not exist.
The honest math — see what Vermont actually offers (and what it does not)
Federal Solar ITC (Section 25D): EXPIRED
$0 for homeowner cash or loan purchases. Expired December 31, 2025.
Net Metering Cut 7 Consecutive Years
VT PUC has reduced net metering credit rates every year since 2017. Every year you wait, the economics get worse. Lock in current rates before the next annual reduction.
First-Year Value
$4,520
savings + tax benefits
25-Year Lifetime
$70,528
on a $29,500 system
Payback Period
10.7 years
then pure savings
Estimates based on VT averages ($2.95/W, 1150 kWh/kW/yr). Net metering uses ~90% retail approximation for Category I adjustor. Actual NM rates set annually by VT PUC and have declined 7 consecutive years. GMP Battery Program terms vary. Federal residential ITC (Section 25D) expired Dec 31, 2025. Vermont has no state rebate, no SREC, and no production-based incentive.
Transparency matters. Here are the programs and incentives that Vermont does not offer. If a solar company tells you otherwise, that is a red flag.
Section 25D expired December 31, 2025. Homeowners who buy with cash or loan get $0 in federal credits.
Unlike MA, RI, NH (before SB 303), or ME (Efficiency Maine), Vermont has never offered a direct state rebate for residential solar.
No Solar Renewable Energy Credits, no SMART program, no REG equivalent. Vermont does not pay per-kWh production incentives.
Phased out January 1, 2025. No new virtual NM arrangements. Community solar is effectively dead for new projects.
Vermont does not offer a state income tax credit for solar, unlike Massachusetts (15%, max $1,000).
Only GMP has a battery VPP. VEC and BED offer no demand response program. This is not statewide.
Vermont's solar incentive landscape is the thinnest in New England. But the math still works for many homeowners — especially GMP customers with the battery program, households with high usage, and those pairing solar with a heat pump to eliminate oil/propane costs ($3.77-$3.96/gal). The ~13-year payback is longer than other states, but with 25+ year panel life, you still get over a decade of free electricity. The key is setting realistic expectations and not falling for phantom incentives.
Vermont consistently ranks last among New England states for solar incentives. Here is the data.
| State | Avg Rate | Sales Tax | Property Tax | Net Metering | Special Program | Payback |
|---|---|---|---|---|---|---|
| Vermont | $0.22 | 6% exempt | 100% exempt (Under 50 kW) | ~90% retail (declining) | GMP Battery VPP | ~13 years |
| Connecticut | $0.27-$0.28 | 6.35% exempt | 100% exempt (15yr) | Full retail | Smart-E Loan | 8-10 years |
| Massachusetts | $0.28-$0.32 | 6.25% exempt | 100% exempt | ~60% NEM 3.0 | SMART $0.03/kWh | 12-14 years |
| New Hampshire | $0.27 | No sales tax | Local option (~66%) | ~85% retail | None (SB 303 repealed) | ~9.5 years |
| Maine | $0.27-$0.32 | 5.5% exempt | 100% exempt | 1:1 retail (NEB) | Efficiency Maine | 12-15 years |
Vermont was an early clean energy leader but has steadily weakened its solar support since 2017.
Vermont establishes net metering program — generous rates for early adopters
Burlington Electric Department reaches 100% renewable electricity — first US city
VT PUC begins annual net metering rate cuts — first of 7 consecutive reductions
GMP launches Battery Program — nationally unique virtual power plant model
H.289 passes: phases out virtual net metering, sets 100% renewable target
Virtual NM ends Jan 1. Federal 25D ITC expires Dec 31. NM cut for 7th consecutive year.
VT relies on tax exemptions, declining NM, and GMP battery program. Weakest NE stack.
Every solar installation in Vermont requires a Certificate of Public Good (CPG) from the VT PUC. This is unique to Vermont — no other New England state requires a state-level utility commission permit for residential solar. The CPG process adds time and complexity.
Application
Day 1
Installer submits CPG application to VT PUC
PUC Review
2-4 weeks
VT PUC reviews system specs and site details
CPG Issued
Week 3-5
Certificate of Public Good granted
Installation
1-3 days
System installed after CPG approval
Total timeline: 4-8 weeks from application to installation, depending on PUC workload. NuWatt handles all CPG paperwork.
Common questions about Vermont solar incentives in 2026.
No. The federal residential solar tax credit (Section 25D) expired on December 31, 2025. Vermont homeowners who purchase solar panels with cash or a loan receive $0 in federal tax credits. However, if you go solar through a lease or PPA, the third-party system owner may still claim Section 48/48E credits through July 4, 2026, which can translate to lower pricing for you.
No. Vermont has never offered a direct state solar rebate program. Unlike Massachusetts (which had Solar Renewable Energy Credits), Rhode Island (REF rebate), or New Hampshire (which had a rebate before SB 303 repealed it), Vermont has never provided an upfront rebate for residential solar installations. If a solar company promises you a Vermont state rebate, that is a red flag.
Three factors compound: (1) Vermont has the lowest average electricity rate in New England at ~$0.22/kWh, meaning each kWh your panels produce saves less money. (2) Vermont has no state rebate, no SREC program, and no production-based incentive like MA SMART or RI REG. (3) VT PUC has cut net metering rates 7 consecutive years, reducing the value of exported solar electricity. The result is a ~13-year payback — longer than CT (8-10), NH (9.5), or ME (12-14).
Vermont net metering credits are calculated using a blended retail rate plus an adjustor. For Category I systems (residential, under 15 kW), the adjustor is still positive but has been declining annually since 2017. The effective credit is approximately 90% of the full retail rate. Credits roll over month-to-month with an annual true-up. A Certificate of Public Good (CPG) from the VT PUC is required for all solar installations. Virtual net metering was phased out by H.289 as of January 1, 2025.
Green Mountain Power offers a nationally unique virtual power plant (VPP) program. GMP customers can lease a Tesla Powerwall or Enphase battery for $0 down, or bring their own device (BYOD) and receive annual bill credits of approximately $850/year. GMP uses the batteries for grid support during peak demand. This program is only available to GMP customers (~75% of Vermont) — VEC and BED do not offer a comparable program.
Effectively no. H.289 phased out virtual net metering as of January 1, 2025, which was the mechanism enabling community solar. No new community solar projects can be developed under current rules. Existing subscribers are grandfathered under their original terms, but no new subscriptions are being offered for new projects.
The average cost of solar in Vermont is $2.75-$3.15 per watt before incentives. A typical 10 kW system costs approximately $29,500 at $2.95/W. After the sales tax exemption (~$1,770 saved), the effective cost is ~$27,730. Vermont solar production averages 1,100-1,200 kWh per installed kW per year — slightly below other New England states due to winter weather and shorter days.
Yes. Every solar installation in Vermont requires a Certificate of Public Good (CPG) from the Vermont Public Utility Commission (VT PUC). This is unique to Vermont — no other New England state requires a state-level utility commission permit for residential solar. The CPG process takes 2-4 weeks for systems under 15 kW. Your installer handles the application, but it adds time and cost compared to other states.
It depends on your situation. Vermont solar takes longer to pay back (~13 years) than any other New England state, but panels last 25+ years, meaning you still get 12+ years of free electricity after breakeven. The math works best if: (1) you are a GMP customer with the battery program, (2) you have high electricity usage, (3) you plan to stay in your home long-term, or (4) you pair solar with a heat pump to offset oil/propane costs. The property and sales tax exemptions provide immediate value, and locking in net metering now protects against further rate cuts.
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Solar Without the ITC
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VT Net Metering Guide
Declining rates explained
GMP Battery Program
VPP lease & BYOD details
Buy vs Lease vs PPA
Best financing for VT
VT Solar Tax Exemptions
Sales & property tax details
GMP vs VEC vs BED
Side-by-side rate comparison
VT Community Solar
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Commercial Solar VT
Section 48 for businesses
Solar + Heat Pump VT
Eliminate oil/propane costs
Burlington Solar Cost
BED territory pricing
Essex Solar Cost
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Solar Capital of NE
Section 48 Guide
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Solar Lease & PPA VT
TPO options in 2026
Solar Financing Guide
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Vermont solar takes longer to pay back than other New England states, but it still works. Get a free, no-pressure quote from NuWatt Energy — we will show you the honest math for your home, your utility, and your budget. No phantom tax credits, no inflated savings projections.
Section 48 lease/PPA deadline: July 4, 2026. Net metering rates declining annually — lock in now.