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Add State and Local Incentives to the 30% Federal Tax Credit
Learn about solar incentives and solar rebates. Find out what is available to you through federal, state and local programs, as well as local utilities.
State and Local Solar Panel Rebates
Combining the Federal tax credit with state incentives you qualify for may significantly reduce the cost of your solar PV system.

Read more good news about these programs and important tips on qualifying below.
Federal Solar Tax Credit
30% of the cost of your Solar Electric System and installation can be deducted from your federal tax bill.

Read more about this credit and what qualifies.





Solar Incentives by State… Click on your state to see what is available.    
Solar States


— You may be able to afford a larger solar PV system than you originally thought!
— You may be able to add the battery backup system you were planning to buy in a year or two



The Good News About Solar System Incentives, Qualifications and Tips
Some solar incentive programs pay you back over time, based on the energy you generate. Other solar incentives are one-time payments of rebates or credits. Incentive requirements and definitions may vary between states.

Incentive types can be specifically for residential, schools, business, or industrial; or inclusive of all of them. Solar incentives are mainly for grid tied systems and are sometimes available for off grid systems.

The incentives may be only for solar photovoltaic (electric), for electricity generated by wind, or for solar thermal (hot water generation). Other types of incentives may incorporate multiple solar technologies.

Programs with yearly or periodic application dates have credits or rebate rates that may be stepped down over time.

To qualify for incentives, your solar system may have to be installed by a licensed Photovoltaic System Installer, and/or connected to the grid by a licensed Electrician. This may be particularly true for Grid-Tie (Grid-Intertied) systems.
Plan ahead and act quickly. Many incentive programs are time sensitive. First-come-first-served programs, such as lotteries, can be spoken for in minutes after the opening of their application date.

Be careful including incentives in your PV system's budget due to requirements and possible deadlines to meet before qualifying.

Always consult a tax professional in regards to your eligibility for tax incentives.





Solar Incentive Glossary
Battery Backup Systems
Battery backup systems can store electricity from the grid or a fuel-powered generator to provide emergency power when the grid goes down. It can also store energy created PV system to power appliances and lights at night after the sun goes down.

Feed in Tariffs,
a Performance Based Incentive, or PBI

(Available for Grid Tied Systems.)
Feed-in Tariffs are typically long term contracts with your local utility for performance-based compensation.

The contracts are typically a 15-25 year purchase agreement at a guaranteed rate. The rate may decrease over time as specified in the agreement. Feed-in Tariffs may ultimately pay for your PV system or even exceed your initial investment depending on the specifics in the contract.

Originally started in Germany in 1990 and restructured in 2000 to include the right to interconnect to the utility grid. It was designed as an incentive to promote cost-effective renewable energy use and advancements in technologies. Due to its success, the current German policy is the cornerstone for the creation of many feed-in tariff programs around the globe.

Green Building Programs
(May be available for Off-grid and/or Grid-tied Systems.)
Green Building Programs are generally for new construction and remodeling, or just adding a solar electric system. The most common incentives are reductions or waivers of building permit fees. Some state or local organizations offer coupons that reduce construction and/or installation costs to homeowners. The home or business owner usually gives the coupon to their program-authorized installer/contractor. Once the system is installed the installer/contractor can be reimbursed for the amount of the coupon by the program's organization.

Grid-Tied PV Systems
Grid tied systems are inter-connected to send energy back to the grid when your solar electric system creates more than you're using; and you can receive energy from the grid when you're using more electricity than your system is generating at the moment. Learn more about grid-tied solar systems.

Loans
(May be available for Off-grid and/or Grid-tied Systems.)
State or local governments may offer low or zero interest loans for renewable energy projects. Terms are typically 10 years or less. If you are going to purchase or remodel a home that you are going to add a solar system to you may also want to see the Energy Star website for information on Energy Improvement Mortgages (EIMs).

Property-Assessed Clean Energy (PACE) financing may be offered by states that have been authorized to participate in this program. The amount of the loan is determined by a special assessment of your property and is typically repaid over a period of years.

Check with your local banks and credit unions as they may offer renewable energy loans for less than the prime rate. Also consider that mortgage loans and home equity loans can offer several advantages: longer terms, lower interest rates than conventional bank loans, and tax-deductible interest.
Net Metering
(Available for Grid Tied Systems.)
As of January 2012, only four states do not have net metering policies ‐ South Dakota, Mississippi, Alabama and Tennessee. These programs are for utility customers who generate their own electricity and feed excess energy back into the grid. Net-metered customers may use grid energy when their electrical demand exceeds their solar electric system's output. Solar electric credit rates are applied to the customer's total electric use and are shown on the utility bills.

The credit rates and rules vary from state to state. Unused solar electric system credits may expire in a specified time period or they may be carried over from year to year. The credits may only be applied to the utility bill or you may be allowed to get a refund check at the end of a designated period, usually the end of the year.

Off-Grid PV Systems
Off grid systems do not feed energy back to the grid. You may be completely independent from the grid or you may be receiving grid electricity to supplement your system (Grid-Assisted). Learn more about off-grid solar systems.

Solar PV System (Photovoltaics)
A solar PV system uses photovoltaic panels (or modules) to create electricity. This powers appliances, lights, and other electric equipment.

Solar Thermal System
A solar thermal system uses panels (or modules) to heat water. The hot water is typically used instead of a water heater for everyday water use, or in a radiant heating system to warm the air.

State and Local Tax Incentives
(May be available for Off-grid and/or Grid-tied Systems.)
  • Personal tax incentives include income tax credits (dollar-for-dollar reduction on what you owe) and income tax deductions (reduces your taxable income).
  • Property tax exemptions, exclusions and credit incentives generally exclude the added value of the system from your yearly property tax. Abatements may reduce a percentage of your yearly property tax over time.
  • State sales tax incentives can be an exemption from or a credit towards the applicable sales tax.
Utility Rate Discounts & Rebates
(Available for Grid Tied Systems.)
Some utilities and state or local programs may offer temporarily reduced rates on utility bills, or one time rebates on the installation of solar systems and purchases of energy efficient appliances and/or HVAC systems.


Updated: 11/26/2016
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Vermont Solar Incentives
Updated: 11/26/2016
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INCENTIVE NAME: Net Metering
CATEGORY: Regulatory Policy
TYPE: Net Metering
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT02R
DETAILS:
Applicable Utilities - All utilities
System Capacity Limit - 2.2 MW for military systems; 20 kW for micro-CHP; 500 kW for all other systems
Aggregate Capacity Limit - 15% of utility's 1996 peak demand or peak demand during most recent calendar year (whichever is greater).
Net Excess Generation - Credited to customer's next bill at retail rate; excess credits not used within 12 months of generation granted to utility
Ownership of Renewable Energy Credits - Utility owns RECs; customers have the option of retaining RECs at the time of application
Meter Aggregation - Group net metering allowed
WEBSITE: http://psb.vermont.gov/utilityindustries/electric/backgroundinfo/netmetering
LAST UPDATE: 08/04/2015

INCENTIVE NAME: Renewable Energy Systems Sales Tax Exemption
CATEGORY: Financial Incentive
TYPE: Sales Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT01F
DETAILS:
Incentive Amount - 100% of sales tax for purchase
LAST UPDATE: 10/14/2015

INCENTIVE NAME: Local Option - Property Tax Exemption
CATEGORY: Financial Incentive
TYPE: Property Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT02F
LAST UPDATE: 12/01/2015

INCENTIVE NAME: Interconnection Standards
CATEGORY: Regulatory Policy
TYPE: Interconnection
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT01R
DETAILS:
Applicable Utilities - All utilities
System Capacity Limit - No limit specified
Standard Agreement - Yes
Insurance Requirements - Not addressed
External Disconnect Switch - Required
Net Metering Required - No (separate interconnection standards exist for net-metered systems 150 kW and under)
WEBSITE: http://psb.vermont.gov/statutesrulesandguidelines/currentrules
LAST UPDATE: 12/01/2015

INCENTIVE NAME: Small-Scale Renewable Energy Incentive Program
CATEGORY: Financial Incentive
TYPE: Rebate Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
SOURCE: Vermont Clean Energy Development Fund
CODE: VT17F
DETAILS:
Incentive Amount - Varies depending on technology and eligible sector
Maximum Incentive - Varies depending on technology and eligible sector
Eligible System Size - PV: Maximum size of 25 kW-DC
Systems over 15 kW must include a Certificate of Public Good application as submitted to the Public Service Board with reservation application.
Wood Pellet Heating Systems: Maximum system size of 100 kW (340kBtu) and combined cap of 200 kW (680kBtu)
Equipment Requirements - PV: New, grid connected; modules must be UL 1703 listed; inverters must be UL 1741-listed or listed by another nationally recognized testing laboratory.
Solar Hot Water: New equipment; collectors must have an OG-100 output rating from SRCC or an equivalent organization.
All systems: 5-year warranty required on major system components and installation, with the exception of batteries, for which a 2-year warranty is required.
Wood Pellet Heating Systems: Minimum efficiency rating of 80% and emissions below 0.2 lbs/MMBtu for PM 10
Installation Requirements - Must be installed by registered Vermont Partners (no self-install). All grid-connected projects (solar PV) must apply for, secure, and provide proof that the Vermont Public Service Board has issued a Certificate of Public Good.
Ownership of Renewable Energy Credits - Not addressed
WEBSITE: http://www.rerc-vt.org/incentives-program/general-information
LAST UPDATE: 05/28/2015

INCENTIVE NAME: Clean Energy Development Fund
CATEGORY: Regulatory Policy
TYPE: Public Benefits Fund
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
SOURCE: State appropriations
CODE: VT06R
BUDGET: FY15: $5,882,076
WEBSITE: http://publicservicedept.vermont.gov/topics/renewable_energy/cedf
LAST UPDATE: 08/04/2015

INCENTIVE NAME: GMP Solar Power
CATEGORY: Financial Incentive
TYPE: Performance-Based Incentive
SECTOR: Utility
TECHNOLOGY: Solar Photovoltaics,
CODE: VT34F
DETAILS:
Incentive Amount - $0.053 per kWh for systems <15kW; $0.043 per kWh for systems >15kW (in addition to the value from net metering).
Terms - System must be net-metered
Eligible System Size - Up to 500 kW
Equipment Requirements - An additional meter and disconnect switch are required
Ownership of Renewable Energy Credits - Customer
WEBSITE: http://www.greenmountainpower.com/innovative/solar/faqs/
UTILITIES: Green Mountain Power Corp,
LAST UPDATE: 08/27/2015

INCENTIVE NAME: Renewable Energy Rights
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Access Policy
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT10R
LAST UPDATE: 03/13/2015

INCENTIVE NAME: Investment Tax Credit
CATEGORY: Financial Incentive
TYPE: Personal Tax Credit
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT37F
DETAILS:
Incentive Amount - 7.2% for solar, fuel cells and small wind placed in service on or before 12/31/2016.
2.4% for solar (except hybrid solar lighting) placed in service on or after 12/31/2016.2.4% for geothermal2.4% for microturbines and CHP placed in service on or before 12/31/2016.
Maximum Incentive - No maximum specified.
Eligible System Size - Small wind: up to 100 kW
Fuel cells: 0.5 kW or greater
Microturbines: 2 MW or less
CHP: 50 MW or less
Marine and Hydrokinetic: 150 kW or greater
Equipment Requirements - All equipment must meet the same requirements as the Federal Investment Tax Credit
Carryover Provisions - Credit may be carried over for 5 years
WEBSITE: http://www.state.vt.us/tax/creditsinvestment.shtml
LAST UPDATE: 06/01/2015

INCENTIVE NAME: Local Option - Property Assessed Clean Energy
CATEGORY: Financial Incentive
TYPE: PACE Financing
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT38F
DETAILS:
Terms - Financing may not exceed $30,000 or 15% of assessed property value, whichever is less; combined amount of assessment and outstanding mortgages may not exceed 90% of assessed property value.
WEBSITE: https://www.efficiencyvermont.com/for-my-home/Financing/Financing/PACE-Overview
LAST UPDATE: 08/18/2015

INCENTIVE NAME: Line Extension Alternatives
CATEGORY: Regulatory Policy
TYPE: Line Extension Analysis
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT11R
DETAILS:
Availability - Information about line extension alternatives is available to customers upon request
WEBSITE: http://publicservicedept.vermont.gov/topics/renewable_energy/resources#solar
LAST UPDATE: 07/23/2015

INCENTIVE NAME: Uniform Capacity Tax and Exemption for Solar
CATEGORY: Financial Incentive
TYPE: Property Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT53F
DETAILS:
Incentive Amount - 100% property tax exemption for systems 50 kW or less
Uniform $4.00/kilowatt property tax payment
Eligible System Size - Up to 50 kW
WEBSITE: http://tax.vermont.gov/municipal-officials/solar-valuation/everything-you-need-to-know-about-solar
LAST UPDATE: 12/01/2015

INCENTIVE NAME: Expedited Permitting Process for Solar Photovoltaic Systems
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Permitting Standards
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT13R
WEBSITE: http://psb.vermont.gov/utilityindustries/electric/backgroundinfo/netmetering
LAST UPDATE: 11/13/2015

INCENTIVE NAME: Small Business Energy Loan Program
CATEGORY: Financial Incentive
TYPE: Loan Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT55F
DETAILS:
Maximum Loan - $350,000
Loan Term - Determined on a case-by-case basis; maximum loan term of 10 years with a maximum 15 year amortization
Interest Rate - Fixed at VEDA’s Small Business Index minus 1.5% for 5 years (currently 4%); then, adjusting to the variable Small Business Index
WEBSITE: http://www.veda.org/financing-options/vermont-commercial-financing/small-business-energy-loan-program/
LAST UPDATE: 10/07/2015

INCENTIVE NAME: Commercial Energy Loan Program
CATEGORY: Financial Incentive
TYPE: Loan Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT56F
DETAILS:
Maximum Loan - $2,000,000
Loan Term - Determined on a case-by-case basis; maximum of 20 years
Interest Rate - Variable rates; current rate is 2.75%
WEBSITE: http://www.veda.org/financing-options/vermont-commercial-financing/commercial-energy-loan-program/
LAST UPDATE: 10/07/2015

INCENTIVE NAME: Agricultural Energy Loan Program
CATEGORY: Financial Incentive
TYPE: Loan Program
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT57F
DETAILS:
Maximum Loan - $1,355,000
Loan Term - Determined on a case-by-case basis; maximum term is 20 years
Interest Rate - 3.50% Variable or 5.0% Fixed for 5 years; then, adjusting to VACC Prime Rate (4%) plus .5% variable
WEBSITE: http://www.veda.org/financing-options/vermont-agricultural-financing/agricultural-energy-loan-program/
LAST UPDATE: 10/07/2015

INCENTIVE NAME: Standard Offer Program
CATEGORY: Financial Incentive
TYPE: Feed-in Tariff
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT59F
DETAILS:
Maximum Incentive - Varies by technology
Eligible System Size - Maximum system capacity is 2.2 MW; overall cap of the standard offer program is 127.5 MW
Equipment Requirements - Effective date: 09/30/2009
Ownership of Renewable Energy Credits - RECs are transferred to the utility, except in the case of farm methane generators (who maintain RECs)
WEBSITE: http://vermontspeed.com/standard-offer-program
LAST UPDATE: 02/17/2015

INCENTIVE NAME: Renewable Energy Standard
CATEGORY: Regulatory Policy
TYPE: Renewables Portfolio Standard
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: VT14R
DETAILS:
Standard - 55% by 2017, increasing by an additional 4% every 3 years until reaching 75% by 2032.
Technology Minimum - Distributed Generation: 1% by 2017, increasing by 3/5ths of a percent every year until reaching 10% by 2032
Energy Transformation Projects: 2% by 2017, increasing by 2/3rds of a percent until reaching 12% by 2032 (The energy transformation minimum is in addition to the overall standard above)
Compliance Multipliers - None
REC Lifetime - 3 years
Credit Trading/Tracking System - New England Generation Information System (NE-GIS)
Alternative Compliance Payment - Total Renewable Energy Requirement: $0.01/kWh
Distributed Generation & Energy Transformation Requirements: $0.07/kWh
LAST UPDATE: 06/16/2015