Solar Incentives: Vermont
The Vermont Solar and Small Wind Incentive Program offers incentives based upon the size and type of the installation.
The Vermont Solar and Small Wind Incentive Program was originally established pursuant to Renewable Energy Legislation passed by the Vermont State Legislature during the spring of 2003 and signed into law by Governor Douglas on June 17 th , 2003. The initial program, which funded the installation of more than 220 renewable energy systems, was fully subscribed in the summer of 2004, with all installations completed by the summer of 2005. A second round of funding for solar installations was made available in September, 2005. These funds came from Central Vermont Public Service (CVPS) and Green Mountain Power (GMP) through monies that the two utilities received from the Nuclear Electric Insurance Limited (NEIL) and the American Nuclear Insurers (ANI) funds due to the sale of their interests in the Vermont Yankee Nuclear power plant. Combined with funds unspent from the first round, this money will support the installation of roughly 110 additional solar systems and was fully reserved by late October, 2005. Funds for the support of wind development were made available in September 2005 through U.S. Department of Energy funds secured by Senator James Jeffords for the VT Department of Public Service Wind Development Program. Approximately $454,600 in incentives was made available for qualifying small wind systems for individuals, businesses, schools, and local and state governments. In July, 2006, the Vermont Clean Energy Development Fund authorized an additional $500,000 to the Vermont Solar and Small Wind Incentive Program for incentives for renewable energy systems. In addition, CVPS and GMP provided roughly $238,000 of incentive funds to support qualifying solar electric and solar hot water systems for customers in their service territories, again from their NEIL funds. Along with money left over from solar projects that were not completed in the previous rounds, these contributions result in a total of $980,000 of new incentive funding. The program was opened for new reservation applications in September 2006. The Renewable Energy Resource Center (RERC), a project of the Vermont Energy Investment Corporation, administers the incentive program and provides consumer education and support services.
For detailed information regarding Vermont's solar incentives click here or contact:
Toll Free Hotline*877-888-7372
*If no one is available to take your call, please leave a message on our voice-mail and we will get back to you.
Office Hours: 8am to 5pm
Mailing Address: 255 South Champlain Street, Suite 7, Burlington, VT 05401
Fax: 802-658-1643
Email: RERC@VEIC.org
Federal Tax Credits
The Federal government is offering income tax credits to both homeowners and businesses that install renewable energy systems.
The Energy Policy Act of 2005 (H.R. 6, Sec. 1335) establishes a 30% tax credit up to $2,000 for the purchase and installation of residential photovoltaic (solar electric) and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaics system and a 30% credit up to a separate $2,000 cap for a solar water heating system. A 30% tax credit up to $500 per 0.5 kW is also available for fuels cells.
Solar water heating property must be certified for performance by the Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which the property is installed. Note that the tax credit does not apply to solar water heating property for swimming pools or hot tubs.
The credit is calculated based on the individual’s expenditures excluding subsidized energy financing, which is defined as "financing provided under a Federal, State, or local program a principal purpose of which is to provide subsidized financing for projects designed to conserve or produce energy." Consumers who receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.
If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. Expenditures include labor costs for the onsite preparation, assembly, or original installation of the system and for piping or wiring to interconnect the system to the dwelling.
To be eligible for the credit, a system must be "placed in service" or activated between January 1, 2006, and December 31, 2007. Expenditures with respect to the equipment are treated as made when the installation is completed. This provision is particularly important for expenditures made before 2006 for projects not "placed in service" until 2006. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. The IRS will be issuing further guidance on claiming this credit.
For detailed information regarding Federal incentives click here or contact:
Information Specialist - IRS
Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040
Web site: http://www.irs.gov