Vermont gets little sun, yet solar can still pay here, because the power it replaces is expensive. In our example a typical home system on Green Mountain Power pays for itself in about 16 years when the RECs go to the utility, and about 23 if you keep them. Your credit rate, not your sunshine, sets the answer.
Typical payback, RECs to the utilityAbout 16 years
Give or keep the RECsAbout 16 to 23 years
Typical owned 11.29 kW system at $32,854 cash (EcoGen Solar Cost Index, September 2026) on Green Mountain Power, with the siting charge of 5 cents per kWh; about 23 years if you keep the RECs. Our assumptions: 40% of the power used at home as it is made, $339 a year in owner costs before the siting charge. See the math.
- Credit rate: up to 20.71 cents per kWh for extra power, less a siting charge of 5 cents per kWh made.
- REC choice: keeping the RECs costs another 4 cents per kWh made.
- Utility: Burlington Electric credits less than Green Mountain Power and the co-ops.
2026 rules: home systems finished after December 31, 2025 get no federal homeowner credit (IRS). For complete net-metering applications filed on or after August 1, 2026, the PUC’s new numbers apply: extra power earns up to 20.71 cents per kWh, and a new system pays a siting charge of 5 cents per kWh it makes.
How we checked this guide
Credits and charges come from the Vermont Public Utility Commission’s 2026 order and utility tariffs, tax rules from the Department of Taxes, and the electricity price from the EIA. The example is the EcoGen Solar Cost Index typical Vermont home. Where we assume a number, the page says so.
The writer and checker shown above are EcoGen staff. EcoGen is paid when homeowners request quotes, which is explained beside the quote form. Read our editorial standards.
Weak sun, costly power: how Vermont credits solar
Each kW of panels in Vermont makes about 1,269 kWh a year, so the typical 11.29 kW system makes about 14,327 kWh. A kWh (kilowatt-hour) is the unit your bill counts. That is modest, but Vermont homes paid an average of 23.80¢ per kWh (EIA, 12 months to July 2026). The high price does more for payback than the weak sun takes away.
Every Vermont utility offers net metering. Power used at home replaces power you would buy; power beyond your monthly use becomes a bill credit, your export credit, at your utility’s residential rate or 20.71 cents per kWh, whichever is lower. Unused credits expire after 12 months.
Two charges, which the PUC calls adjustors, come off. The siting charge is 5 cents per kWh that a new system up to 15 kW makes, home use included: about $716 a year on the typical system. The REC charge is your choice. A renewable energy credit (REC) is the right to call the power renewable. Give the RECs to your utility and it is zero; keep them and it is 4 cents per kWh (about $573 a year). An exported kWh then nets about 15.71 cents per kWh, or about 11.71 cents per kWh with the RECs kept. The PUC set these in its May 29, 2026 order; applications from August 1, 2024 to July 31, 2026 kept a siting charge of 4 cents per kWh.
Utility | Credit for extra power | After the siting charge | Ask before you sign |
|---|---|---|---|
Green Mountain Power (about 7 in 10 homes) | 20.71 cents | about 15.71 cents per kWh | The tariff date and your REC choice. |
Vermont Electric Cooperative | 20.71 cents | about 15.71 cents per kWh | The date on your application. |
Washington Electric Cooperative | 20.71 cents | about 15.71 cents per kWh | The credit in the current tariff. |
Burlington Electric | about 16.59 cents | about 11.59 cents | A payback worked out at this lower credit. |
The “after” column assumes the RECs go to the utility. Town utilities set their own rates. Green Mountain Power’s share is from EIA-861 2024 data.
Where Vermont solar holds up, and where it slips
With a long payback, small things add up. Read each row across.
REC choice
Worth a closer look
The RECs go to your utility, so no REC charge comes off your credits.
Pause and check
You keep the RECs, which costs 4 cents per kWh made (about $573 a year).
Check next: the REC choice the quote assumed. You can switch once within 120 days after start-up.
Your utility
Worth a closer look
Green Mountain Power or a co-op crediting 20.71 cents per kWh.
Pause and check
Burlington Electric, which credits about 16.59 cents, or about 11.59 cents after the siting charge.
Check next: the credit rate your quote used, with your utility named.
System size
Worth a closer look
Sized to your own 12 months of bills, and at or under 15 kW.
Pause and check
Sized well past what you use, so credits pile up and expire after 12 months.
Check next: your yearly use next to the system’s estimated yearly output.
Roof and shade
Worth a closer look
An open roof with years of life left. Weak sun leaves no room for shade.
Pause and check
Heavy shade, a roof facing away from the sun, or a roof due for replacement.
Check next: a shade report and the roof’s age.
Price and time in home
Worth a closer look
Near the Index’s $32,854 for 11.29 kW ($2.91 per watt), and you plan to stay past payback.
Pause and check
A quote that adds sales tax, or a move within a few years.
Check next: the cash and financed prices, and your moving plans.
Two Vermont paybacks, one REC choice apart
Simple payback is the years your savings take to cover what you paid: net cost divided by yearly savings. Here is the typical Vermont system on Green Mountain Power, with the RECs going to the utility. Because the siting charge comes off every kWh, we count it as a yearly owner cost.
- Cash price
- $32,854
- Confirmed incentives
- $0
- Year-one production
- 14,327 kWh
- Used at home / exported
- 40% / 60%
- Green Mountain Power home price (Rate 1)
- $0.22639/kWh
- Export credit
- $0.2071/kWh
- Owner-cost allowance
- $1,055/yr
- Used-at-home value
14,327 × 40% × $0.22639$1,297/yr - Export value
14,327 × 60% × $0.2071$1,780/yr - Yearly savings after owner costs
$1,297 + $1,780 − $1,055$2,023/yr - Simple cash payback
$32,854 ÷ $2,023about 16.2 years
Inputs: the Cost Index typical Vermont system (11.29 kW, $32,854 cash, September 2026; 1,269 kWh per kW a year). No incentive to subtract. Exports earn Green Mountain Power’s 20.71 cents per kWh. Owner costs: $339 a year ($30 per kW, including a reserve for a new inverter) plus the siting charge (about $716 a year). Power used at home is valued at Green Mountain Power’s Rate 1 energy price, 22.639 cents per kWh since October 1, 2026, rather than the 23.80¢ state average, which includes fixed charges. Our assumption: 40% of the solar power used at home as it is made, 60% sent to the grid.
Now keep the RECs and change nothing else. The panels make the same power and earn the same credits, but the REC charge comes off every kWh, year after year.
| Scenario | Yearly owner costs | Savings before costs | Yearly savings | Simple payback |
|---|---|---|---|---|
| RECs go to the utility | $1,055 | $3,078 | $2,023 | about 16.2 years |
| You keep the RECs | $1,628 | $3,078 | $1,450 | about 22.7 years |
One box on the application adds years. A lower price per watt and rising rates shorten your number. Shade, credits that expire, or Burlington Electric’s lower credit stretch it.
Check your own Vermont quote
The tool starts with the Green Mountain Power case above. Enter your quote’s numbers and press Calculate. Nothing you enter is sent anywhere.
Example result
about 16.2 years
simple cash payback
- Used-at-home value
- $1,297/yr
- Export value
- $1,780/yr
- Owner costs
- −$1,055/yr
- Yearly savings
- $2,023/yr
- Net cost
- $32,854
The $1,055 owner costs include the siting charge; use $1,628 to test keeping the RECs. Flat first-year values.
Power you use vs power you send out
In Vermont the gap is small. A kWh used at home saves the price you pay; a kWh sent out earns the blended credit, not far below it. So your home-use share moves the answer less here than in states where exports earn a few cents.
Used at home: 5,731 kWh. Each one replaces power you would have bought, so it saves the full variable rate ($0.22639 here).
Sent to the grid: 8,596 kWh. These earn whatever your utility pays for exports ($0.2071 here). That is a little less.
The 40/60 split is a planning assumption based on home-use research, not a measured Vermont average. The siting charge comes off both parts, so our example counts it in owner costs.
Find out which credit rate your home gets
A Vermont quote should name your utility, its credit rate, the siting charge and your REC choice.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
Two taxes you will not pay, and no credit
Vermont has no cash rebate for panels and no state tax credit; the 2025 Schedule IN-119 lists none. It does offer two exemptions. No sales tax: equipment in a net-metering system is exempt from the 6% sales tax under 32 V.S.A. § 9741(46) when you give the seller Form S-3E at or before the sale. It did not expire on June 30, 2026; that date belongs to another exemption. No property tax: a net-metered solar plant under 50 kW pays none (32 V.S.A. § 3802(17)), with nothing to file. Neither is a payment, so our example subtracts nothing.
What a Vermont quote should spell out
The PUC itself says the adjustors confuse people. Check each quote for these lines.
- Your utility and its credit. The per-kWh credit from that utility’s tariff.
- The siting charge. 5 cents per kWh made, for applications from August 1, 2026.
- Your REC choice. Transfer or keep, and the cost of keeping.
- Output against your use. Year-one kWh next to 12 months of bills.
- No sales tax. The installer takes your Form S-3E.
- No federal credit. It ended for systems finished after December 31, 2025.
Compare Vermont solar quotes
Ask each installer to show the credit rate, the siting charge and the REC choice behind its savings. Enter your ZIP code to request quotes from solar providers that serve your area.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us. This is not an application to net metering.
More Vermont solar guides
- Vermont solar guide: utilities, incentives and installers in one place
- Vermont solar companies: compare local installers before you request quotes
- Vermont solar incentives: bill credits and two tax exemptions
- What solar costs in Vermont
- Free solar panels in Vermont: what a zero-down offer means
- Are solar panels worth it? The national guide and payback calculator
All 51 state guides
Vermont solar questions
Are solar panels worth it in Vermont?
They can be, if you stay long enough. In our example a typical owned system on Green Mountain Power pays back in about 16 years when the RECs go to the utility and about 23 when you keep them. Your utility, REC choice, shade and price move the number most.
Does weak sunshine make Vermont a bad place for solar?
No. Each kW of panels here makes about 1,269 kWh a year, less than in sunnier states. But Vermont homes paid an average of 23.80¢ per kWh, and every kWh you make yourself avoids that price. Sunshine sets how much power you get; the rate sets what it is worth. Here the rate matters more.
What is Vermont’s net metering rate right now?
For applications filed on or after August 1, 2026, extra power earns your utility’s residential rate or 20.71 cents per kWh, whichever is lower. A new system up to 15 kW pays a siting charge of 5 cents per kWh made, leaving about 15.71 cents per kWh if the RECs go to the utility. Credits expire after 12 months.
Does my Vermont credit change after I install?
Partly. The siting and REC charges are set by the date of your complete application. The blended rate under them is updated every two years for existing and new systems alike, as the PUC’s May 29, 2026 order did. On September 9, 2026 the PUC opened a rulemaking to redesign credits; it says existing systems should get a transition.
Should I keep my RECs or give them to my utility?
For payback, giving them away wins. Keeping the RECs costs 4 cents per kWh made, about $573 a year on the typical system, and stretches our example from about 16 to about 23 years. Keep them only if claiming the power as renewable is worth that to you. You can switch once within 120 days after start-up.
What Vermont solar incentives still exist?
No cash rebate and no state tax credit: the 2025 Schedule IN-119 lists none. The help is the bill credit, no sales tax on the equipment with Form S-3E, and no property tax on a net-metered home system under 50 kW. The sales tax exemption did not expire on June 30, 2026.
Sources, method and corrections
The example uses the EcoGen Solar Cost Index typical Vermont system (September 2026), the PUC’s net-metering numbers for complete applications filed from August 1, 2026, and Green Mountain Power’s tariff. Our assumptions: 40% of the solar power used at home as it is made, 60% sent to the grid, and $339 a year ($30 per kW, including a reserve for a new inverter) in owner costs before the siting charge. Power used at home is valued at Green Mountain Power’s Rate 1 energy price, 22.639 cents per kWh from October 1, 2026. Simple payback uses flat first-year values. Green Mountain Power’s battery payment is not counted: its renewal was not decided when we checked. The calculator sends nothing.
Updated October 2026: 40% home use and 60% exports, owner costs of $30 per kW a year plus the siting charge, and Green Mountain Power’s 22.639-cent Rate 1 energy price for power used at home.
Spotted an error? Tell us through our corrections and feedback process.
- Vermont PUC: order in the 2026 biennial update of net metering, Case No. 26-0291-INV (rates and adjustors; checked October 6, 2026)
- Vermont PUC: order opening the net-metering rulemaking, Case No. 26-1786-RULE
- Vermont PUC: Net-Metering and Rule 5.100
- Green Mountain Power: Self-Generation and Net Metering tariff
- Vermont Electric Cooperative: Net Metering
- Vermont Department of Taxes: Form S-3E
- Vermont Department of Taxes: Solar plant taxation
- Vermont Department of Taxes: 2025 Schedule IN-119
- U.S. EIA: Form EIA-861, 2024 data
- U.S. EIA: average residential electricity price by state (12-month average)
- IRS: Residential Clean Energy Credit
- EcoGen Solar Cost Index, September 2026: what solar costs in Vermont
