Incentive Types

header-incentive-types

Financial Incentives for Renewable Energy in Vermont

REV works hard to promote legislation that creates new incentives for Vermont homeowners and businesses to install renewable energy systems.

Here are the current state and local incentives:

Vermont Solar & Small Wind Incentive Program

detail-incentive-2

Overview: This is a state rebate program which offers incentives on new solar water heating, solar electric (photovoltaic), wind, and micro-hydro energy system installations. Funding is available to family residences, commercial and industrial businesses, farms, schools, builders and developers, as well as local and state governments. The program receives its funds from the American Recovery and Reinvestment Act (ARRA) via the Vermont Clean Energy Fund.

The goal of this program is to accelerate market demand for high-quality solar and small wind systems in Vermont.

Detailed information and instructions on how to calculate incentives for a specific system application can be found in the program’s incentive reservation forms located at the Renewable Energy Resource Center (RERC).

Eligibility: In order to receive incentives, all solar water heating, solar electric, wind, and micro-hydro energy systems installed must comply with the system sizes, equipment, and installation requirements as set by the state of Vermont. The program offers financial incentives only to renewable energy systems installed by local Partnership Program installers. To take advantage of the incentives, you must go through an installer that has been approved by the Solar and Wind Partnership Program. You can find partner installers here.

The timing and number of systems receiving incentives depends on the size of installations and market reaction to the program. The program incentives cover approximately 20–25% of the total installed cost for eligible systems. The program administrator tracks and reports total system costs, estimated energy savings, avoided environmental emissions and job activity within the solar and small wind delivery sector of Vermont ‘s economy.

The program is administered  for the VT Department of Public Service by the RERC, which is a project of the Vermont Energy Investment Corporation (VEIC) and which provides consumer education and support services.

More Information:

Clean Energy Development Fund

In 2005, the Vermont General Assembly established the Vermont Clean Energy Development Fund (CEDF) through Act 74, which specified that the CEDF would be funded by proceeds due to the state from Entergy Nuclear VT and Entergy Nuclear Operations, Inc., and by any other monies that may be appropriated to or deposited into the fund.

The CEDF offers low-interest loans to help finance a wide variety of clean and/or renewable electric energy technologies. The purpose of the program is to promote the development and deployment of cost-effective and environmentally sustainable electric power resources — primarily with respect to renewable energy resources and the use of combined heat and power technologies — for the long-term benefit of Vermont electric customers.

The VT Department of Public Service (DPS) manages the CEDF. Contact Kelly Launder for additional information or Andrew Perchlik at 802-828-4017 or by e-mail.

More Information:

Net Metering

detail-incentive-3REV has been working on making Vermont’s net metering law more effective in promoting renewable energy. Net metering makes it easier and more cost-effective for Vermonters to generate their own electricity because the net metering law requires electric utilities to permit customers to reduce their electric bills by generating their own clean power using renewable energy systems. Any excess power they generate is fed back to their utilities, actually running their electric meters backwards!

In 2011 the legislature passed the Vermont Energy Act of 2011, which includes several changes to the net metering law. The following changes are the most significant:

Self-Generation and Net Metering

  • Clarifies that purpose of net metering is to offset a customers electricity requirements.
  • Raises the system cap from 250kW to 500kW for both group and non-group systems. In effect on Jan 1, 2012.
  • Provides for a simplified registration process for solar net metered systems of 5kW or less. This provision allows smaller systems to receive a CPG via registration. It gives utilities a 10-day window to note interconnection issues after which the board automatically issues a CPG. This goes into effect 180 days after passage.
  • Includes a provision which expires a CPG if unused for 12 months.
  • Monetizes kWh credits
  • Requires a utility to bill the members of a group net metered system separately, while retaining the ability of the group administrator to determine “the manner in which the utility shall allocate any accrued credits among the meters included in the system.”
  • Raises the per-utility cumulative net metering cap from 2% to 4%. In effect on Jan 1, 2012.
  • Requires all utilities to offer an incentive credit (solar adder) to net metered solar customers. Adder amount will be 20 cents minus a utilities highest retail rate for 10 years regardless of any fluctuations in rates during those 10 years. Adder amount is revisited every two years. Exempts utilities with a retail rate equal to or greater than 20 cents. Gives utilities 30 days to file an adder proposal and another 30 days to implement the adder. Allows utilities to count net-metering kWh incentivized through the adder toward SPEED goals. Applies to all existing net metered systems and new net metered systems.

More Information:
VT Dept. of Public Service’s Net Metering Page

VT Statewide Solar Adder

This innovative provision in the recently passed H.56 Vermont Energy Act of 2011 creates a special statewide solar customer benefit. Recognizing the peak power savings of net metered solar, the new law creates a financial incentive to catalyze more net metered solar by requiring utilities to offer a 20 cent credit to solar net metering customers for the energy they produce. Modeled after Green Mountain Power’s SolarGMP program, utilities will be required to issue an additional credit on top of the base residential per kWh credit that solar customers already receive (to make a total of 20 cents per kWh).This means that for every kWh your system generates, you get credited 20 cents per kWh. Customers are awarded the per kWh customer credit for a 10 year period. Further details on this new incentive and how you can access it are due out later this summer.

Renewable Energy System Sales Tax Exemption

detail-incentive-1

Overview: This Vermont state sales tax exemption applies to eligible renewable energy systems that generate electricity and are up to 250 kW in capacity. It also applies to micro-combined heat and power systems up to 20 kW in size and to solar hot water systems. Grid-tied as well as off-grid systems are eligible for this tax exemption. The current sales tax rate in Vermont is 6%.

In other words – residential, commercial, general public, or agricultural consumers who install solar water heat, solar thermal electric, PV, landfill gas, wind, biomass, CHP/cogeneration, anaerobic digestion, or fuel cells using renewable fuels do not have to pay ANY state sales tax on any parts of the system.

Here is the Statutory language for the sales tax exemption: “Title 32: Taxation and Finance, Chapter 233: Sales And Use Tax, § 9741. Sales not covered (46) Tangible personal property to be incorporated into: (A) a net metering system as defined in 30 V.S.A. § 219a; (B) a home or business energy system on a premises not connected to the electric distribution system of a utility regulated under Title 30 and that otherwise meets the requirements of 30 V.S.A. § 219a(a)(3)(A), (C), (D), and (E); or (C) a hot water heating system that converts solar energy into thermal energy used to heat water, but limited to that property directly necessary for and used to capture, convert, or store solar energy for this purpose.”

More Information:
See the DSIRE page for this incentive by clicking HERE

Federal Residential Renewable Energy Tax Credit

Overview: This Federal personal tax credit applies to residential consumers in the United States using any of the following renewable energy technologies – solar water heat, PV, wind, fuel cells, geothermal heat pumps, other solar electric technologies, or fuel cells using renewable fuels.

Taxpayers may claim a credit of 30% of expenditures for a renewable energy system that serves a residential dwelling in the United States. These expenditures include labor costs such as on site preparation, assembly and installation, and any wiring necessary to connect a system to the residence. If tax liability is exceeded by the federal tax credit, the excess credit can carry over to the following taxable year.

Eligibility: In order to be eligible for the federal tax credit, all systems must comply with deadlines, sizing, and equipment requirements as set by the federal government. In order to be eligible for the federal tax credit, the system must be installed between the dates of January 1, 2006 and December 31, 2016. The maximum allowable tax credit, equipment requirements, and other details vary by the different technologies. See explicitly stated requirements and details on the Database of State Incentives for Renewables and Efficiency website.

Incentive/Credit Amounts:

  • Solar electric property: No maximum amount for systems placed in service after 2008. $2,000 is the maximum credit amount for systems placed in service prior to January 1, 2009. See DSIRE website for additional information.
  • Solar water- heating property: No maximum amount for systems placed in service after 2008. $2,000 is the maximum credit amount for systems placed in service prior to January 1, 2009. See specific requirements and details on DSIRE website.
  • Fuel cell property: $500 per half kW. See additional requirements and details on DSIRE website.
  • Small wind- energy property: No maximum credit for system placed in service after 2008. Maximum credit for systems placed in service in 2008 is $500 per 0.5 kW, not to be greater than $4,000. See DSIRE website for additional requirements and details.
  • Geothermal heat pumps: No maximum credit for systems placed in service after 2008. $2,000 is the maximum credit for system placed in service in 2008.

More Information:
See DSIRE page for this incentive by clicking HERE

Local Option – Property Tax Incentive

Overview: The state of Vermont gives Vermont towns the option of offering an exemption from municipal and personal property taxes for certain renewable energy systems. This exemption applies to residential, commercial, industrial, and agricultural sectors. It is important to note that state property taxes still apply. Adoption and implementation of this property tax exemption varies by municipality. The exemption applies to the total value of the eligible renewable energy system.

Eligibility: Renewable energy technologies that are eligible for this tax exemption are solar water heat, solar space heat, solar thermal electric, PV, landfill gas, wind, biomass, hydroelectric, CHP/cogeneration, anaerobic digestion, small hydroelectric, and fuel cells using renewable fuels.

More Information:
See DSIRE page for this incentive by clicking HERE

Local Option – Property Assessed Clean Energy (PACE)

Overview: This is a financing option that allows property owners to borrow money from PACE to help pay for energy improvements. The money borrowed is generally repaid through an assessment on the property over a period of up to 20 years.

Vermont allows local governments to create Property-Assessed Clean Energy (PACE) Districts which provide financing to owners of a “dwelling” or “residence” for renewable energy and energy-efficiency projects. This does not apply to commercial properties. Voter approval is necessary to establish a PACE district.

To become involved with the PACE program, a property owner must sign a contract with the municipality’s district. Within the contract the amount of the loan, terms of repayment, and the associated risks are specified. Once signing the contract, property owners are required to conduct an energy audit to figure out the project costs, energy savings, and carbon impacts. Property owners may waive a full energy audit if the property has successfully participated in formal energy efficiency programs.

As part of signing the contract, property owners must agree to an assessment and liwn on the property. Also, property owners must pay a one- time, non- refundable fee ( equivalent to 2% of the assessment) in order to support the reserve fund. The town may issue a lien on a property after the owner has met the terms of the loan.

Eligibility: Eligible renewable-energy technologies include solar water and space heating, PV, biomass energy heating systems, small wind systems, and micro-hydroelectric systems. Eligible energy-efficiency technologies include ceiling fans, water heaters, lighting, furnaces, boilers, heat recovery, programmable thermostats, energy mgmt. systems/building controls, duct/air sealing, building insulation, windows, doors, motors, motor VFDs, comprehensive measures/whole building, as well as other locally determined measures.

Terms: Financing is not permitted to exceed $30,000 or 15% of assesses property value (whichever is less).

More Information:
See DSIRE page for this incentive by clicking HERE

Vermont Anemometer Loan Program

The mission of this program is to provide anemometer (wind measurement) equipment to Vermont residents who are considering the installation of small wind systems on their property.

More Information:
Call: John Kidder 802-728-1783
Web: Vermont Technical College

Vermont Energy Investment Corporation

Vermont Energy Investment Corporation (VEIC) performs energy audits and energy ratings of homes for energy efficiency and works with Vermont lenders, real estate professionals, builders, home buyers, sellers and utilities to promote affordable, energy-efficient housing throughout Vermont. VEIC also works directly with the Renewable Energy Resource Center and Efficiency Vermont to help promote and rate homes with renewable energy systems.

More Information:
Call: 802-865-3926 or toll-free 1-800-639-6069
Web: Vermont Energy Investment Corporation

Vermont Energy Star Homes Service

This is a state-wide service promoting energy efficient new construction. Direct financial incentives are available for homes meeting specified criteria, and renewable energy systems can help a new homeowner meet program standards.

More Information:
Call: Jeff Gephart at 800-893-1997
E-mail: info@vtenergystarhomes.com
Web: Efficiency Vermont