Solar Incentives and Rebates in Vermont

Peak Sun Hours (PSH): 3.8 - 4.0
Cost of Grid Power: $0.18/kWh
Number Of Installations: 8,648

What’s the Cost of Solar in Vermont?

Cost of Grid Power

Vermont's electricity prices average $0.18/kWh, above the national average of $0.14/kWh. From 2015 to 2019, solar energy tripled to account for roughly 14% of in-state power generation. Half of this is utility, half small-scale or rooftop.

Cost of a Solar Install

Cost of a typical 5kW PV install in Vermont from 2004-2016

A graph of falling prices for a typical 5kW PV install in Vermont from 2004-2016.
Figures include design costs. Data from Berkeley Lab.

The average cost of a 5kW (equivalent to saving almost 100 trees a year) solar power system starts around $19,000 in Vermont. Before any incentives, in the first year you’d save about $1,000, compared to if you had been paying the normal rates for the energy you used. These savings can continue for well over 25 years, improving with inflation.

Just How Much Can I Save With Solar in Vermont?

This depends on may factors such as your system size, power output, and financing. Here are the main ways you can finance your home solar power system, and the kinds of returns you may expect to see:


From our example above, the homeowner purchased a 5kW system to offset their energy bill. Overhead cost was $19,000, with a significant proportion returned in the first year through incentives, rebates, and savings, then paying itself in full over ten years.

Most solar power systems have a warranty lifetime of 25 years. In that time, between incentives and paying lower rates you could make a profit of around $20,000 - more than the up-front cost of the system!

Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.

Solar Loan

Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.

Starting with that same 5kW system costing $19,000 but with zero up-front cost, accounting for incentives, credits, rebates, and annual energy savings starting around $1,000, you could see a revenue surplus of about $5,300 at the end of the first year.

Save that money though. Your loan payments will likely exceed your power savings by about $30/month for the 15-year term. Once the loan is paid off, you can expect to save about $1,300 a year. Over 25 years you could expect to make about $14,000.

Power Purchase Agreement

With a Power-Purchase Agreement (PPA) the homeowner leases their roof to an outside party, usually a power company. Generally PPAs feature a fixed price per kWh, with either a fixed term or an annual escalator.

With a PPA, the cost of installation, repair, and maintenance to the homeowner is usually $0.00. For that 5kW system, with a PPA you could expect to save about $30/month on energy. Over 2 years, you could see over $9,500 in revenue - without accounting for inflation. That’s technically an infinite return!

PPA’s can be complicated, as you are effectively ceding at least some control of your home to the third party, but they are an excellent way to get into solar because they have no overhead.

What Incentives are Available in Vermont?

Data from DSIRE. For more info visit: https://www.dsireusa.org/

Name Implementing Sector Program Type Administrator DSIRE ID
Renewable Energy Systems Sales Tax Exemption State Sales Tax Incentive 44
Fuel Source and Environmental Impact Disclosure State Generation Disclosure 884
Clean Energy Development Fund (CEDF) Loan Program State Loan Program Vermont Department of Public Service 2815
Mandatory Utility Green Power Option State Mandatory Utility Green Power Option 2899
Renewable Energy Rights State Solar/Wind Access Policy 3417
Expedited Permitting Process for Solar Photovoltaic Systems State Solar/Wind Permitting Standards 5293
Small Business Energy Loan Program State Loan Program Vermont Economic Development Authority (VEDA) 5511
Commercial Energy Loan Program State Loan Program Vermont Economic Development Authority (VEDA) 5512
Agricultural Energy Loan Program State Loan Program Vermont Agricultural Credit Corporation (VACC) 5513
Energy Loan Guarantee Program State Loan Program Vermont Economic Development Authority (VEDA) 5514
Residential Heating Systems Rebate Program State Rebate Program Efficiency Vermont 5694
Commercial Kitchen Equipment Rebate Program State Rebate Program 5695
Renewable Energy Standard State Renewables Portfolio Standard 5786
Efficiency Vermont - Commercial New Construction State Energy Analysis Efficiency Vermont 14148
Efficiency Vermont - Building Performance Program State Energy Analysis Efficiency Vermont 14150
Efficiency Vermont - Resource Library State Training and Information Efficiency Vermont 16489
Efficiency Vermont - Industrial & Special Equipment State Energy Analysis Efficiency Vermont 20485
U.S. Department of Energy - Industrial Assessment Center (IAC): University of Massachusetts Federal Energy Analysis U.S. Department of Energy 21773
ISO New England - Demand Resources Other Energy Analysis ISO New England 21799
Northeast Energy Efficiency Partnerships - EM&V Forum Non-Profit Training and Information Northeast Energy Efficiency Partnerships 22019
Burlington Electric Department - Commercial On-Bill Financing Program Utility Loan Program Burlington Electric Department 22102
Burlington Electric Department - Commercial Energy Efficiency Rebate Program Utility Rebate Program Burlington Electric Department 22103


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