On Friday, May 29th, the PUC issued its final order in the Net Metering Biennial Update. While the Order rejected the worst of the Public Service Department’s recommendations, it failed to make net metering truly affordable for Vermonters after the Trump administration stripped away a decades-old tax credit for residential solar.
The Order contains some real wins for REV, the renewable industry, and the more than 1,000 members of the public who submitted comments supporting net metering. The PUC rejected the Department’s call to freeze the blended rate, which would have retroactively reduced the compensation owed to more than 20,000 Vermont net metering customers and upended the market for new renewable projects in Vermont. The PUC also rejected the Department’s recommendation to reduce the siting adjustor by 2 cents/kWh in favor of a more modest 1 cent/kWh reduction for Category I and II systems and left the adjustors for Category III and IV systems unchanged. This is the first time in the biennial update process that the PUC has issued an order more favorable than the Department’s recommendation.
However, the Order also contains a number of things that should concern supporters of renewable energy. Even the more modest 1-cent reduction in the siting adjustor means that a typical residential net metering customer applying for a net metering CPG after the rate update will receive lower compensation than they would today. Perhaps more concerning, the PUC has stated that it will be opening Rulemaking and providing no assurances that this will not impact the compensation owed to existing systems:
The Commission understands that the current version of Commission Rule 5.100 may have run its course, and we will be issuing an order in the next few months announcing a process for making changes to the net-metering rule. Net-metering has its place in Vermont’s energy landscape, and we want to make sure that there is a structure that can provide a meaningful opportunity for customers to self-generate power without causing a significant cost shift. The Commission sees a rulemaking as an opportunity to create better incentives for customers to align their generation with their consumption and to increase simplicity and transparency in the billing calculation.
We recognize that under our current rule customers have a reasonable expectation that a biennial update to recalculate the blended residential rate will occur every two years. … The Commission is required by law to ensure that utility rates and utility rate design are just and reasonable. … While the Commission will consider the financial impact of any rulemaking or ratemaking on net-metering customers, net-metering customers’ investment expectations must be balanced against the interests of all utility customers in setting just and reasonable rates. For example, the changes to the net-metering program announced in our 2016 rulemaking did not apply to existing net metering customers until ten years after a net-metering system was installed. Accordingly, we note that net metering customers have always been and will continue to be subject to future changes in underlying utility rates and rate structures that could affect the value of a net-metering credit
Overall the PUC order is a modestly better short-term outcome than anticipated but it only accelerates the imperative to protect existing systems from retroactive changes and design and new system that will work for Vermont families and business going forward.
For future net metering:
- The PUC’s decision did nothing to offset the loss of the ITC. Every residential solar array in Vermont is effectively 43% more expensive than it was on 12/31/25.
- Net metering installations 150 kW and under fell 24% from 2024 to 2025, even before the ITC expired.
- Rooftop and backyard solar installations will continue to decline.
For existing net metering:
- New rule-making is coming, and the PSD will continue to advocate for retroactive changes.
- The PUC believes that it has the power to make those changes and sees a rationale for doing so (“we find the cost shift is material and will increase over time without additional adjustments to the net metering program”).
Changes in Net Metering Compensation
See REV’s comments to the PUC and Press Statement in response to the final order.