Trevor has worked in home improvement and residential solar since 2016 and maintains the EcoGen Solar Cost Index.
Vermont has among the weakest sunshine in the country at 4.54 peak sun hours, and still one of the shorter paybacks. Those two facts sit together because of a third: Vermont households pay 23.52¢ per kilowatt-hour, about 31% above the US average. Solar returns are set by the price of the power you stop buying.
Poor Sun, Expensive Power, Good Arithmetic
It is worth seeing how far apart these inputs are before looking at any result.
The verdict changes with the state line; see the state-by-state solar payback guide for how.
Vermont input | Figure | Versus the US average |
|---|---|---|
Residential electricity price | 23.52¢ | About 31% above |
Five-year price growth | 4.34% a year | Five-year average |
Peak sun hours | 4.54 hours | Among the weakest in the country |
Annual output per kW | 1,269 kWh | Follows from the 4.54 peak sun hours |
Typical system | 5.43 kW, $15,687 | About 0.3% below the US average per watt |
A Vermont roof produces less per kilowatt than a roof in a sunnier state. It is also displacing electricity priced about 31% above the US average. The second effect is far larger than the first.
Enter your ZIP code to confirm which Vermont utility sets your compensation.
See which Vermont utility sets your compensation
What Vermont Pays for Net-Metered Output
Vermont’s Public Utility Commission sets net-metering compensation under Rule 5.100 and revisits it every two years under Rule 5.128. Its May 29, 2026 order in Case 26-0291-INV set a statewide blended residential rate of 20.71¢ per kilowatt-hour effective August 1, 2026, with a siting adjustor of negative 5¢ for rooftop systems up to 15 kW whose complete application is filed on or after August 1, 2026; applications complete by July 31, 2026 keep the previous negative 4¢ adjustor.
On Green Mountain Power that puts excess output at about 15.7¢ and self-consumed output at the 21.457¢ residential energy rate less the adjustor. Ask your utility in writing which adjustor vintage your application falls under.
Compensation basis | Annual value of a 5.43 kW system | Simple payback |
|---|---|---|
Ceiling: every unit valued at the 23.52¢ statewide average (no Vermont utility pays this) | $1,621 | 9.7 years |
Green Mountain Power, terms for applications filed on or after August 1, 2026, half self-consumed and half excess | $1,108 | 14.2 years |
Green Mountain Power, same terms, all output credited as excess | $1,083 | 14.5 years |
EcoGen America calculation from the Vermont output, rate and system figures in the EcoGen Solar Cost Index, $2.89 per watt as of March 1, 2026; simple payback before financing, rate escalation and degradation; compensation figures from the Commission’s May 29, 2026 order and Green Mountain Power’s tariff effective August 1, 2026.
Across the realistic range the answer barely moves. Whether the house uses half its output or almost none of it, payback lands between 14 and 15 years on Green Mountain Power’s current terms. The 9.7-year row is the ceiling, and no Vermont utility credits at the statewide average. What sets your own share is daytime occupancy, electric heat and whether you add a battery.
Green Mountain Power serves about 81% of Vermont households by customer count. Vermont Electric Co-op (about 13%) and Burlington Electric (about 6%) customers are on their own figures, and Burlington’s are materially lower.
Why the Rate Rise Compounds Here
Every payback figure above is static: it assumes the 23.52¢ never moves. It has been moving, at about 4.34% a year over the past five years.
Rate growth matters more in Vermont than in most of the country for a simple reason of scale. A 4.34% rise on 23.52¢ adds about a penny a year to what each unit of your own generation is worth. The same percentage rise on a 13¢ rate adds a little over half that. A high starting price gains the most from every subsequent increase, and Vermont’s prices have also been climbing quickly.
That is the strongest argument for solar in Vermont. You are fixing part of your electricity cost at a moment when the alternative is expensive and rising.
What Vermont Gives, and What It No Longer Does
- A property tax exemption under 32 V.S.A. section 3802 for net-metered or off-grid residential systems under 50 kW serving only the property they sit on. Structural, and it does not expire.
- Adjustor values fixed in your permit at enrollment under Rule 5.100. The zero-or-positive siting and renewable energy certificate adjustors pay for 10 years from commissioning; a negative certificate adjustor, which applies if you retain your certificates rather than transferring them, runs for the life of the system. The blended base rate underneath is reset every two years for everyone, so your total credit moves with it.
- No state income tax credit for residential solar. The 6% sales tax exemption on solar equipment under 32 V.S.A. section 9741(15) carried a June 30, 2026 expiry; ask the Department of Taxes whether it was extended before you price a system.
- No federal residential credit. Section 25D is $0 for homeowner-purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21. A lease or PPA company that owns the system may qualify for the separate Section 48E business credit under current deadlines, and whether any of that value reaches your payment depends on the contract, so ask for both in writing.
When Vermont Solar Still Does Not Make Sense
The case here is strong, which makes it more important to name the situations where it fails.
- Heavy shading, or a roof facing away from south. At 4.54 peak sun hours Vermont has no margin to give away. A 20% shading loss that a sunnier state would absorb pushes a Vermont system from good to marginal.
- A roof needing replacement inside ten years. Removal and refitting is a real cost that arrives before the system has paid for itself.
- Snow load and access problems on a steep or difficult roof, which raise installation cost above the $2.89 per watt this analysis assumes and lengthen every figure on the page.
- Moving before the system has paid for itself, which on Green Mountain Power’s current terms means inside about 14 years. Any resale premium is not something to count on without a local appraisal.
- Any proposal built on a compensation figure the installer cannot source. Given that the May 29 order is recent, ask to see where the number came from.
Get the current compensation rate for your utility in writing, then rerun the table with that figure in place. Our Vermont incentives guide covers the tariff structure, and the Vermont installer list covers who works in the state.
Vermont Solar FAQs
Are solar panels worth it in Vermont?
For most Green Mountain Power households the arithmetic works, with simple payback of roughly 14 to 15 years on the current net-metering terms and faster if rates keep rising near 4.34% a year. It depends on your utility, on the compensation rate that applies to an application filed today, on how much of the output the house uses, and on staying in the home past the payback date.
Does weak sunshine make Vermont a bad place for solar?
No, and the arithmetic shows why. Vermont has among the weakest sunshine in the country at 4.54 peak sun hours, but it displaces electricity priced about 31% above the US average. The rate effect is much larger than the sun effect, which is why payback here runs roughly 14 to 15 years on Green Mountain Power’s current terms. Sunshine sets how much a panel makes; your electricity rate sets what that output is worth, and the rate matters more.
What is Vermont’s net metering rate right now?
For complete applications filed on or after August 1, 2026, the blended rate is 20.71¢ less a 5¢ rooftop siting adjustor, about 15.7¢ on Green Mountain Power for excess output; applications complete by July 31, 2026 carry the previous 4¢ adjustor. The figures come from the Commission’s May 29, 2026 order in Case 26-0291-INV. Confirm in writing which vintage your application lands under, and be cautious with any installer proposal that states a rate without a source.
Does my Vermont compensation rate change after I install?
Partly. Your adjustor values are fixed at enrollment, with the positive ones paying for 10 years from commissioning, but the blended base rate they modify is recalculated every two years for existing systems as well as new ones. Get the enrollment date and the adjustor values confirmed in writing by your utility.
What Vermont solar incentives still exist?
A property tax exemption under 32 V.S.A. section 3802 for net-metered or off-grid residential systems under 50 kW serving only their own property, which is structural and does not expire. There is no state income tax credit for residential solar. The 6% sales tax exemption on solar equipment under 32 V.S.A. section 9741(15) carried a June 30, 2026 expiry; ask the Department of Taxes whether it was extended before you price a system. The federal residential credit is $0 for homeowner-purchased systems whose installation is completed after December 31, 2025.
Enter your ZIP code and we will confirm which Vermont utility sets your compensation.
Confirm the utility that sets your rate
References & Research Sources
EcoGen America reviewed the Vermont Public Utility Commission notice of the 2026 biennial update, confirming that on May 29, 2026 the Commission issued an order in Case 26-0291-INV adjusting net-metering compensation under Commission Rule 5.128; Commission Rule 5.100 for the statewide structure, the blended residential rate, the renewable energy certificate and siting adjustors, and adjustor values fixed at enrollment (zero-or-positive adjustors paying for 10 years from commissioning, negative certificate adjustors in perpetuity, over a blended base that resets biennially); the order’s blended residential rate of 20.71¢ effective August 1, 2026, its negative 5¢ Category I siting adjustor for complete applications filed on or after that date and the previous negative 4¢ adjustor for applications complete by July 31, 2026; Green Mountain Power’s net metering tariff effective August 1, 2026 and its 21.457¢ Residential Rate 1 energy rate; 32 V.S.A. section 3802 for the property tax exemption and 32 V.S.A. section 9741(15) for the sales tax exemption and its June 30, 2026 expiry; EIA Electric Power Monthly for the 23.52¢ residential price and the five-year growth rate of roughly 4.34% a year; and IRS guidance on the Public Law 119-21 termination of Section 25D. Output of 1,269 kWh per kilowatt per year, 4.54 peak sun hours, the 5.43 kW system size, the $15,687 installed cost and the $2.89 per watt figure are EcoGen America figures at the state benchmark as of March 1, 2026. The payback figures are our own calculation and are simple payback before financing, rate escalation and degradation. Sources accessed between June 10 and August 17, 2026.
