Vermont Solar Panels

Vermont provides a full sales tax exemption on solar photovoltaic (PV) equipment — including panels, inverters, batteries, and associated components — for systems up to 500 kW in capacity. With Vermont’s state sales tax rate at 6%, this exemption can save the average homeowner approximately $1,000 to $1,800 on a typical residential solar installation, depending on system size and total cost.

The exemption applies automatically at the point of sale — no application or enrollment is required. It is available to residential, commercial, and agricultural customers alike. Note that the sales tax exemption is currently scheduled to expire on June 30, 2026, so homeowners considering solar should act before this deadline to take advantage of the savings.

Vermont law (32 V.S.A. § 3802) exempts residential solar energy systems under 50 kW from property tax assessment. This means that even though adding solar can increase your home’s value by $15,000–$20,000 or more, that added value will not raise your annual property tax bill. Over a 25-year system lifespan, this can represent thousands of dollars in avoided taxes.

The exemption applies automatically — no application is needed. For larger systems of 50 kW or more, a Uniform Capacity Tax of $4 per kW applies annually instead of standard property tax assessment. Battery storage projects over 600 kWh capacity are also subject to a $0.50/kWh annual capacity tax. Most residential systems fall well under these thresholds and qualify for the full exemption.

Vermont’s Net Energy Metering (NEM) program requires all Vermont utilities to offer net metering to solar customers for systems up to 500 kW. When your solar panels produce more electricity than your home uses, the excess is sent to the grid and you receive a bill credit. When you need to draw power from the grid — at night or on cloudy days — those credits offset what you owe. The statewide blended residential credit rate was set at approximately $0.18398/kWh as of 2024, and Green Mountain Power customers receive credits at roughly $0.14/kWh at the retail rate.

Credits can be carried forward on your bill for up to 12 months, after which any unused credits are forfeited to the utility. Residential systems of 15 kW or less also receive a 1 cent/kWh credit adjuster on top of the standard net metering rate. Starting in 2026, under Act 179, group (virtual) net metering is limited to on-site or adjacent-parcel systems only. Net metering is one of Vermont’s strongest solar incentives and can dramatically reduce or eliminate your monthly electric bill.

The Vermont Clean Energy Development Fund (CEDF) provides an upfront cash rebate of $0.10 per watt for residential solar PV installations, with a maximum rebate of $3,500 per project. For a typical 10 kW residential system, this translates to a $1,000 rebate; for larger systems, the rebate caps at $3,500. This rebate is administered through the Renewable Energy Resource Center (RERC).

To apply or learn more, contact the Renewable Energy Resource Center (RERC) at 1 (877) 888-7372, email [email protected], or visit www.rerc-vt.org. The CEDF was established in 2005 to promote the development and deployment of cost-effective and environmentally sustainable renewable energy resources in Vermont, and the residential rebate program is one of its key offerings for homeowners going solar.

Green Mountain Power’s Bring Your Own Device (BYOD) program provides upfront cash rebates to GMP customers who purchase and install an eligible home battery storage system and agree to participate in GMP’s virtual power plant (VPP). During peak demand events — which occur a few times per month — GMP can draw on your battery’s stored energy to help stabilize the grid. In exchange, you receive a rebate of $850 per kW of battery capacity if you enroll in a 3-hour daily discharge commitment, or $950 per kW for a 4-hour daily discharge commitment. The maximum rebate is $10,500 per battery system, and the minimum battery size to participate is 5 kW.

An additional $100 per kW bonus is available for customers in high-need grid areas, and this bonus also applies to homeowners retrofitting an existing solar array with battery storage — meaning you don’t need to be installing new solar to qualify. Compatible battery brands include Tesla, Enphase, Duracell, FranklinWH, SolarEdge, Generac, SunPower, Panasonic, Savant, Sonnen, and Electriq, all of which must be professionally installed and meet GMP’s technical requirements. There is a small monthly communication fee of $3.97 for ongoing program participation.

The BYOD program is open to GMP customers, who serve approximately 75% of Vermont residents. The current enrollment deadline is September 30, 2026. Participants commit to making their battery’s energy storage capacity available to GMP for a 10-year period during peak demand events.

Green Mountain Power’s Energy Storage System (ESS) Lease Program allows GMP customers to access home battery backup without the full upfront cost of purchasing a system. Participants can lease two Tesla Powerwalls for a 10-year term by paying either $55 per month or a one-time upfront payment of $5,500. For reference, purchasing two Tesla Powerwalls outright typically costs over $14,000, making this lease a significant cost savings for homeowners who want battery backup.

In exchange for the subsidized lease, GMP retains the ability to control the batteries during designated Peak Events to help manage grid demand. Participants can choose between Enphase Energy and Tesla battery systems. As of 2026, the GMP Powerwall lease waitlist has over 1,200 people and wait times can be several months, as demand consistently outpaces installation capacity. GMP is actively working to expand the program.

Green Mountain Power offers additional per-kWh incentives to residential solar customers beyond standard net metering credits. Customers with systems under 15 kW receive an extra $0.01 per kWh for all solar energy generated over a 10-year period. If the customer also agrees to transfer the Renewable Energy Certificates (RECs) associated with their system to GMP, they receive an additional $0.03 per kWh, bringing the total bonus to $0.04 per kWh on top of their net metering credits.

For larger systems between 15 kW and 150 kW located on designated ‘preferred sites’ — areas where solar generation is most beneficial to the grid — customers may also be eligible for the $0.03/kWh REC adder. These adders are paid over a 10-year period and can meaningfully improve the financial return on a solar investment. Homeowners should weigh the value of retaining their RECs (which represent the environmental attributes of their clean energy) against the financial benefit of transferring them to GMP for the additional credit.

Vermont offers a state-level Investment Tax Credit (ITC) for businesses that invest in solar energy systems. The credit is equal to 24% of the federal ITC claimed, which — when the federal commercial ITC is at 30% — translates to an effective Vermont state tax credit of approximately 7.2% of the total system cost. This credit applies to solar photovoltaic (PV) systems and solar hot water systems used for business purposes.

Because the federal residential ITC (Section 25D) expired for homeowners as of December 31, 2025, this Vermont state credit is now primarily relevant for businesses, commercial solar installations, and third-party owned systems (leases/PPAs) that still qualify for the federal commercial ITC under Section 48/48E. Business owners considering solar should consult a tax professional to confirm eligibility and maximize the combined federal and state tax credit benefit.

The Affordable Community Renewable Energy (ACRE) program is a community solar initiative that helps income-qualifying Vermont households lower their monthly electric bills through guaranteed bill credits — with no cost to apply and no cost to participate. Eligible households receive a steady $29.55 credit on their monthly electric bill, adding up to over $350 in annual savings. There is no equipment to install and no fees of any kind; funding support from the Vermont Public Service Department makes participation completely free.

Eligibility is based on your electric utility and household income. If you receive electricity from a participating Vermont utility and your household income meets the program guidelines, you can apply. The program is especially valuable for renters and households who cannot install rooftop solar. Enrollment for 2026 is open from April 7 through August 31, 2026. To apply or learn more, visit vppsa.com/acre.

Vermont Electric Co-op’s Co-op Community Solar program gives VEC members the opportunity to participate in solar energy without installing panels on their own property. Members can sponsor panels on VEC-owned solar arrays for either a 10-year or 20-year term and receive a fixed, guaranteed monthly credit on their electric bill for the duration of their participation. This is an excellent option for renters, homeowners with shaded roofs, or anyone who wants the financial benefits of solar without the complexity of ownership.

The program is available exclusively to Vermont Electric Co-op members. Credits are fixed and guaranteed for the term of participation, providing predictable savings regardless of changes in electricity rates. Members interested in enrolling should contact VEC directly or visit vermontelectric.coop/co-op-community-solar for current availability, pricing, and enrollment details.