VERMONT COMMERCIAL & INDUSTRIAL INCENTIVES
STATE TAX CREDIT
Vermont offers a 7.2% investment tax credit for installations of renewable energy systems on business properties placed in service on or before 12/31/2019. This credit steps down to 6.24% for systems placed in service by 12/31/2020 and 5.28% for systems in service by 12/31/2021. After that, solar technologies are eligible for a 2.4% credit. Any unused tax credit may be carried forward for five years.
Businesses can also take advantage of Vermont’s generous net metering laws, which allow customers to generate and use their own power. If a net metered customer uses more electricity than is generated, the customer pays the utility only for the difference.
If the system generates more electricity than the customer used in a month, the utility records a credit for the excess kilowatt hours towards the customer’s next bill. Unused credits revert to the utility after 12 months.
Any electrical utility customer or group of customers of the same utility in Vermont can net meter once they have obtained a Certificate of Public Good (CPG) from the Public Service Board. CPGs are expedited for Photovoltaic systems (PV) 15kW or less (10 days) and rooftop PV systems larger than 15kW (30 days).
ADDITIONAL ENERGY GENERATION CREDITS
For net metering customers using solar energy, they receive an additional credit, or “solar adder,” that is calculated by subtracting the utility’s highest residential rate from twenty cents. Currently, commercial electricity rates in Vermont average 14.32¢ per kWh, netting an average 5.68¢ credit per kWh produced.
For example, Green Mountain Power offers a credit to their customers with net-metered photovoltaic (PV) systems. In addition to the benefits of net metering, Green Mountain Power customers with a PV system of less than 15 kilowatts receive a credit of $0.053 per kilowatt-hour of electricity generated. PV installations larger than 15 kW receive a credit of $0.043 per kWh.
Check with your local utility on their Solar Adder programs. Vermont’s net metering law caps the size of net metering generators at 500 kilowatts of generation.
COMMERCIAL ENERGY LOAN PROGRAM
The Commercial Energy Loan Program (CELP) provides low-interest loans to businesses for larger renewable energy and energy efficiency projects. (The current interest rate is 3%.)
The maximum loan amount is $2,000,000, and may fund up to 60% of the project. Loans are provided at variable rates, adjusted on a quarterly basis; current rates can be found here. Loan terms determined on a case-by-case basis, with a maximum loan term of 20 years.
Fees include (1) a 1% commitment fee ($1,000 minimum and $3,500 maximum), (2) an Independent Engineer Review fee, (3) a $50 credit report fee, (4) an $18 flood insurance certification (if required), (5) an appraisal reimbursement (if applicable), and (6) document recording and discharge fees. There is no application fee.
SALES TAX EXEMPTION
All equipment purchased to construct and install a net metered renewable energy system is exempt from Vermont’s 6% sales tax (Sec. 27. 32 V.S.A. § 9741(46)). Your Municipality may offer additional tax credits or incentives.
Please consult your financial advisor before making any decisions regarding renewable energy adoption. This is not an offer or guarantee of financing, which is dependent on bank acceptance and other factors. Click here for a full list of Renewable Energy Programs in Vermont.
Norwich Solar Technologies provides turnkey services for commercial solar electric customers including: Development, Design, Engineering, Procurement, and Construction, Power Purchase Agreements, Structured Financial Solutions and Long-Term Operations and Maintenance.