Incentives and Grants

    Vermont:

    Vermont Small Scale Renewable Energy Incentive Program:

    The Solar Specialists will make the program application when a design has been finalized.  The money is reserved for the project up to six months.  Upon project completion, the State will send you a check for the reservation amount.  The program has changed once again in 2013.  The PV system size has now been capped at 30kW.

    Solar Electric Systems (PV)

    Residential – $0.25 per watt up to 10 kW

    Commercial- $ No longer available

    Special Category (government, non-profit, schools, hospitals, low-income multi-family) PV: $1.25/W DC up to 10 kW,

    Solar Hot Water Heating

    Residential Solar Hot Water: $1.50/100 Btu/d up to 200 kBtu/d
    Commercial Solar Hot Water: $1.50/100 Btu/d up to 1100 kBtu/d
    Special Category Solar Hot Water: $3.00/100 Btu/d up to 1500 kBtu/d

    Business Tax Credit for Solar (Corporate)

    Vermont offers the “Business Solar Tax Credit” for installations of solar energy equipment on business properties. The credit is equal to 100% of the “Vermont-property portion” of the federal business energy tax credit for solar from 2008 through 2011. In effect, this constitutes a 30% state-level credit for systems and equipment that use solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Any unused tax credit may be carried forward for no more than five years.

    For projects starting January 1, 2010 or later, businesses will have to seek tax credit eligibility pre-approval from the Clean Energy Development Board (see the application on the program web site).  As of August 2010, only projects 150 kW or less are eligible. Construction for these projects must be complete by September 1, 2011.

    Any taxpayer who receives funding from Vermont’s Clean Energy Development Fund is not eligible to claim the tax credit for the project.  Corporate taxpayers who take the Federal Treasury grant in lieu of tax credit are not eligible for Vermont’s Business Solar Tax Credit. If taxpayers are not awarded a Solar Tax Credit, they may be eligible for the business investment tax credit.

    Business Tax Credit for Solar (Individual Filers)

    The full 30% credit expires for individual taxpayers (those with an individual financial interest in partnerships and other pass through entities) in 2011, leaving a 7.2% Vermont investment tax credit that stays in effect until 2016.

    Local Option – Property Tax Exemption

    Vermont allows municipalities the option of offering an exemption from the municipal real and personal property taxes for certain renewable energy systems (Note: state property taxes would still apply). Eligible systems include,  “facilities for the collection of solar energy …and all component parts thereof including land upon which the facility is located, not to exceed one-half acre.” Adoption of this exemption varies by municipality, but the exemption generally applies to the total value of the qualifying renewable energy system and can be applied to residential, commercial, and industrial real and personal property.

    Group Net Metering:

    Net Metering laws in Vermont were changed to allow a group to invest in a common solar system.  A group of investors or homeowners from one utility can all invest in the installation of a solar system in a central location.  Then each member of the group can harvest the value of the energy that the system produces.  Each agreement must have a manager that oversees distribution of funds and maintains relations with the utility.

    Green Mountain Power – Solar GMP

    Residential PV systems installed in Green Mountain Power territory qualify for an additional 6 cents per kilowatt-hour.  In addition to net metering, a separate meter tracks all solar production.  These solar kilowatt-hours are credited an additional 6 cents on the utility bill.

    Federal:

    Residential Renewable Energy Tax Credit
    Solar-electric property

    • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.
    • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
    • The home served by the system does not have to be the taxpayer’s principal residence.
    • Note that the Solar Energy Industries Association (SEIA) has published a three-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.

    Solar water-heating property

    • There is no maximum credit for systems placed in service after 2008.
    • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
    • Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
    • At least half the energy used to heat the dwelling’s water must be from solar in order for the solar water-heating property expenditures to be eligible.
    • The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
    • The home served by the system does not have to be the taxpayer’s principal residence.

    Business Energy Investment Tax Credit (ITC)

    In general, credits are available for eligible systems placed in service on or before December 31, 2016:

    • Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. . (The Solar Energy Industries Association has published a three-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.)

    The new law also allows taxpayers eligible for the business ITC to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The grant is only available to systems where construction begins prior to December 31, 2011

    Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2012)

    The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. This provision was extended (retroactively for the entire 2009 tax year) under the same terms by The American Recovery and Reinvestment Act of 2009, enacted in February 2009. Bonus depreciation was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297).

    USDA – Rural Energy for America Program (REAP) Loan Guarantees

    These incentives are available to agricultural producers and rural small businesses to purchase renewable energy systems (including systems that may be used to produce and sell electricity) and to make energy efficiency improvements. Funding is also available to conduct relevant feasibility studies, with approximately 2% of total funding being available for feasibility studies. Eligible renewable energy projects include wind, solar, biomass and geothermal; and hydrogen derived from biomass or water using wind, solar or geothermal energy sources. These grants are limited to 25% of a proposed project’s cost, and a loan guarantee may not exceed $25 million.