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The Ultimate Guide to Saving Money on Solar Panels in Vermont

Are you a Vermont homeowner considering making the switch to solar energy? You‘re not alone. The Green Mountain State ranks among the top in the nation for solar adoption, with nearly 15% of its electricity coming from solar as of 2021. And it‘s no wonder why – going solar in Vermont can lead to significant cost savings over time while reducing your carbon footprint.

But with the upfront cost of solar panels still relatively high, many Vermonters may be wondering how they can afford to make the investment. The good news is, there are numerous incentives, credits and strategies available to help bring those costs down. In this guide, we‘ll break down everything you need to know about saving money on solar in Vermont so you can confidently take the leap into clean energy.

Digital Technology & Solar Savings

Before we dive into the specifics of solar costs and incentives in Vermont, let‘s talk about how digital technology is revolutionizing the residential solar industry and helping homeowners maximize their savings.

One key innovation is solar monitoring systems, which use sensors and software to track your solar panels‘ performance in real-time. By analyzing this data, you can identify any issues that may be impacting your system‘s efficiency and take steps to optimize your energy production. Many modern inverters even come with built-in monitoring capabilities and mobile apps for easy access to your solar data.

Smart home integrations are another way digital tech is boosting solar savings. By connecting your solar system to a smart thermostat, appliances, and energy storage solutions, you can automatically optimize your energy usage to align with your solar production. For example, you could program your smart thermostat to pre-cool your home during the sunniest hours of the day when your solar panels are producing the most power, reducing your reliance on the grid during peak rate times.

Digital platforms like EnergySage and SolarReviews are also making it easier than ever for homeowners to explore their solar options and find the best deal. These websites allow you to compare quotes from multiple pre-screened installers in your area, read customer reviews, and get expert advice on designing your ideal system.

Solar Panel Costs in Vermont: How Do They Compare?

Now, let‘s look at the current state of solar costs in Vermont. According to data from EnergySage, the average cost of solar panels in Vermont as of early 2023 is $2.87 per watt. For a typical 6 kilowatt (kW) system, that translates to a total cost of $17,220 before incentives.

System Size (kW) Average Cost in Vermont (before incentives)
4 kW $11,480
6 kW $17,220
8 kW $22,960
10 kW $28,700

Data from EnergySage Solar Marketplace, Jan-Mar 2023

While Vermont‘s solar costs are slightly lower than the national average of $2.94 per watt, they‘re still higher than some of the sunniest states like Arizona ($2.33/W) or Florida ($2.53/W). However, Vermont makes up for it with higher than average electricity rates (over 19 cents per kilowatt-hour for residential customers as of January 2023, compared to a U.S. average of 14.9 cents). This means the potential savings from offsetting your electric bill with solar are greater.

Vermont also has a relatively small but competitive solar industry, with over 50 installers operating throughout the state. More competition generally helps keep installation costs in check for consumers. In fact, quotes for Vermont solar projects on the EnergySage marketplace in 2021 were 14% lower than the state average, showing how comparing your options can lead to significant savings.

Slashing the Upfront Cost: Incentives & Credits for Vermont Solar Shoppers

Now that we have a baseline for solar costs in Vermont, let‘s dive into the available incentives and credits that can drastically reduce that upfront investment.

Federal Solar Tax Credit

The most significant incentive for solar adopters in Vermont (and nationwide) is the federal solar investment tax credit (ITC). This allows you to deduct 30% of the cost of your solar installation from your federal taxes, as long as you own the system outright.

So for that average 6 kW, $17K system, the 30% ITC would amount to over $5,100 in savings. The credit was recently extended by Congress and will remain at 30% through 2032 before stepping down to 26% in 2033 and 22% in 2034.

There‘s no dollar limit on the ITC, but you must have sufficient tax liability to take full advantage. However, any unused amount of the credit can be rolled over to future years as long as the ITC is still in effect. Be sure to consult a tax professional to determine how the credit will apply in your situation.

Vermont State Incentives

While Vermont doesn‘t offer a statewide solar tax credit or rebate program, there are several other key incentives that indirectly make solar more affordable:

Net Metering
Vermont has one of the most generous net metering policies in the country. It requires utilities to compensate solar owners for excess electricity they send to the grid at the full retail rate (versus the lower wholesale rate offered in some states). As of 2022, the average residential retail rate for major utilities like Green Mountain Power is around $0.19 per kWh, while the wholesale rate is closer to $0.06 per kWh.

This means that if your solar panels produce more energy than you use in a given month, you‘ll receive a credit on your next utility bill equivalent to the full retail value of that excess energy. These credits can be carried forward for up to 12 months, helping offset your electricity costs during less sunny months. Vermont‘s net metering program has spurred significant solar adoption, with over 33,000 interconnected net metering systems as of 2021.

Renewable Energy Standard
Vermont has an aggressive renewable energy standard, requiring utilities to source 75% of their electricity from renewables by 2032 (55% by 2017 and an additional 4% each year thereafter). This policy commitment helps drive further investments in solar and keeps electricity rates stable.

In fact, a 2018 report by the Lawrence Berkeley National Laboratory found that states with strong renewable portfolio standards (RPS) like Vermont‘s have experienced slower electricity rate growth compared to non-RPS states. The study estimated that Vermont‘s RPS saved ratepayers over $410 million from 2010-2018.

Sales Tax Exemption
As a state with no sales tax, Vermont residents automatically save 6% on their solar installations compared to homeowners in states that charge sales tax on solar equipment.

Property Tax Exemption
Solar panels are also 100% exempt from Vermont‘s property tax for 10 years after installation. This means you won‘t see your property taxes go up as a result of the value solar adds to your home. Over that 10 year period, this exemption can save solar owners thousands of dollars – for example, a 6 kW system that adds $15,000 of value to a home would be exempt from $405 in property taxes annually (based on Vermont‘s average property tax rate of 2.7%).

While these incentives aren‘t as direct as a state rebate program, they create a very favorable climate for solar adoption in the Green Mountain state and help shorten the payback period for solar panels.

More Ways to Maximize Your Solar Savings in VT

Beyond taking advantage of available incentives and credits, there are a few other key strategies that can help you get the best possible deal on your solar installation in Vermont:

Compare Multiple Quotes

As with any major purchase, it pays to shop around. We recommend getting quotes from at least 3-4 reputable solar installers in your area to compare costs, equipment options, and installation timelines. EnergySage is a great resource that allows you to solicit multiple quotes online, while SolarReviews provides consumer reviews of the top national and local installers.

Don‘t just go with the cheapest option – consider the quality of the equipment being used, the company‘s track record and workmanship warranties, and the overall value proposition. Spending a bit more upfront for a higher quality installation can pay off in the long run through better performance and reliability.

Evaluate Financing Options

If you don‘t have the cash on hand to purchase your solar panels outright, financing can be a smart option to make them more accessible. Many solar installers partner with lenders to offer solar loans, which allow you to spread out the cost of your system over 10-20 years.

In many cases, your monthly loan payments will be lower than your current electric bill, meaning you start saving money right away. Vermont also has a statewide PACE financing program that allows homeowners to pay back solar loans through an assessment on their property tax bill, sometimes at lower rates than traditional loans.

Another option to consider is a power purchase agreement (PPA), where the solar company owns and maintains the panels on your roof and sells you the electricity they produce at a discounted rate compared to your utility. However, you won‘t be eligible for the federal tax credit or other incentives with this arrangement.

Consider Community Solar

For Vermonters who rent or don‘t have a suitable roof for solar panels, community solar projects offer a way to still save with solar energy. These allow you to subscribe to a share of a larger solar farm in your utility‘s territory and receive credits on your electric bill for the energy it produces.

The state‘s net metering rule also allows for group net metering, meaning the credits can be applied to multiple utility accounts. As of 2022, Vermont has over 40 active community solar projects with a combined capacity of over 60 MW. According to the Vermont Public Utilities Commission, community solar participants can expect to save an average of 10-15% on their electricity costs by enrolling in these programs.

The Bottom Line: How Much Can Vermonters Save by Going Solar?

So what kind of savings can the average Vermont homeowner expect by making the switch to solar? Let‘s run some numbers using that 6 kW system example:

  • Initial cost: $17,220
  • Federal tax credit: -$5,166
  • Vermont sales tax exemption: -$1,033
  • Total cost after incentives: $11,021
  • Average first year savings on electricity costs: $1,151
  • Estimated lifetime savings over 25 years: $18,025
Cost / Savings Value
Initial cost (6kW) $17,220
Federal tax credit (30%) -$5,166
VT sales tax exemption (6%) -$1,033
Incentivized net cost $11,021
First year electric bill savings $1,151
Estimated 25-year savings $18,025

Based on a 6kW system @ $2.87/W, 18.91 cents/kWh electric rate, and 20% annual electricity offset

The above is just an example for illustrative purposes. Your actual costs and savings will depend on your specific circumstances, including your energy usage, roof characteristics, equipment, and financing choices, and incentive eligibility.

But generally speaking, even with Vermont‘s less than ideal climate for solar production, the state‘s higher than average electricity costs and strong supportive policies make solar panels an excellent investment for most homeowners. A typical system will pay for itself in energy savings within 8-12 years, and provide free, clean energy for decades to come.

Vermont Solar Success Story

To see how these savings play out in the real world, let‘s look at a case study from Norwich Solar Technologies, a Vermont-based solar installer:

In 2019, the McGanns, a family of four in Bennington, VT, installed a 7.6 kW roof mounted solar system on their home. The system included 20 LG 380W panels and a SolarEdge inverter for a total cost of $22,500. After accounting for the 30% federal tax credit and Vermont‘s sales and property tax exemptions, their net cost came to around $15,200.

Based on an average annual production of 7,981 kWh and an electricity rate of 18 cents per kWh, the McGanns were able to offset over $1,400 in annual utility costs. Over the 25+ year lifespan of their panels, they‘re projected to save over $50,000 on their electricity bills.

"Going solar was a no-brainer for us," said Tim McGann. "Not only are we saving money every month, but we‘re also doing our part to reduce our carbon footprint and support clean energy in our community. We couldn‘t be happier with our decision."

Vermont Solar FAQs

To wrap things up, here are answers to some of the most frequently asked questions about going solar in Vermont:

Is rooftop solar viable in Vermont?
Yes! While Vermont may not get as much sun as southern states, it still receives enough sunlight to make solar a worthwhile investment. In fact, solar panels actually perform better in cooler temperatures. With Vermont‘s high electricity rates and strong solar incentives, most homeowners will see significant savings by going solar.

How much does a full solar installation cost in Vermont?
As of early 2023, the average cost for a residential solar installation in Vermont is $2.87 per watt, or $17,220 for a typical 6 kW system before incentives. However, with the federal tax credit and state exemptions, most homeowners will end up paying around $11,000 for that same system.

How do I choose a solar installer in Vermont?
There are a few key things to look for when choosing a solar company in Vermont:

  • Expertise: Look for companies with significant solar experience and certifications like NABCEP (North American Board of Certified Energy Practitioners).
  • Reputation: Read customer reviews and check the company‘s rating with the Better Business Bureau. Also ask for local references to get a sense of their track record in your area.
  • Warranties: Most reputable installers will offer a 25-year warranty on their equipment and at least a 10-year warranty on their workmanship.
  • Financing options: If you need to finance your system, look for a company that offers competitive loan options or can connect you with a trusted lending partner.

Ultimately, it‘s a good idea to get quotes from multiple installers to compare your options before making a decision.

Can I install solar panels myself in Vermont?
Technically yes, but we strongly recommend working with a professional solar installer, especially if you want to take advantage of incentives like the federal tax credit. A reputable installer will have the experience and certifications to ensure your system is designed and installed properly, and will handle all the necessary permits and paperwork for you.

How long does it take to install solar panels in Vermont?
The actual installation process typically only takes a few days, but the entire process from site assessment to final inspection and interconnection can take anywhere from 1-3 months. Your installer will be able to give you a more specific timeline based on your project details and local permitting requirements.

Do solar panels work during Vermont winters?
Yes, solar panels still produce electricity during the winter months, even when there‘s snow on them. In fact, light reflecting off snow can actually boost your panels‘ production. Most panels are installed at an angle that allows snow to slide off, and some high-efficiency panels are even rated for heavy snow loads. Your installer can design a system that maximizes winter production based on your roof characteristics and local climate.

What happens if I produce more solar power than I use?
Thanks to Vermont‘s net metering policy, any excess power your solar panels send to the grid will be credited to your account at the full retail rate. You can then use these credits to offset the cost of electricity you use from the grid when your solar panels aren‘t producing (like at night).

Let the Sun Pay Your Bills!

We hope this guide has been helpful in breaking down the process of saving with solar in Vermont. By taking advantage of available incentives, exploring your financing options, and working with a trusted installer, you can feel confident in making a smart investment in your energy future.

Going solar is not only a great way to save money on your electricity bills, but also an opportunity to support local jobs, reduce your carbon footprint, and contribute to a more sustainable and resilient energy grid. With Vermont‘s ambitious renewable energy goals and strong solar policies, there‘s never been a better time to make the switch.

So what are you waiting for? Let the sun start paying your bills and join the thousands of Vermont homeowners who are already enjoying the benefits of clean, affordable solar power!