Is solar worth it in Vermont?

7 factors to consider before getting solar panels in Vermont

Several factors determine if solar panels are worth it for you, including your installation costs, the orientation and shading of your roof and how long you plan to stay in your home. Here’s what to consider before making the switch.

1. Solar panel installation costs
2. Your energy consumption
3. Vermont solar incentives
4. Net metering buyback rates
5. How long you live in your house
6. How you pay
7. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Vermont are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $14,550 to $29,100. That price drops to $10,185 to $20,370 after considering the full 30% tax credit.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Vermont, the average cost per watt is only $2.91.

Average solar panel installation cost by system size in Vermont

2. Your current energy consumption

Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself. In Vermont, solar panels usually pay for themselves within 7.5 years.

Look at your most recent utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be. A typical Vermont household needs a system with a capacity of 8.72 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

3. Vermont solar incentives: tax credits and exemptions

The federal solar investment tax credit (ITC) is a major incentive that reduces the upfront cost of going solar in Vermont. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.

Don’t get confused: The ITC is a credit, meaning it directly decreases the amount of taxes you owe. This is different from a deduction, which reduces your taxable income. It isn’t a rebate or a refund. It only offsets your tax liability; you can't take advantage of the ITC if you don’t owe taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount.

Residents may take advantage of additional solar incentives in Vermont, including sales and local property tax exemptions.

4. Net metering rates in Vermont: retail rates

Net metering is a system of give-and-take between you and your utility company. It lets you access power from the grid when your panels don’t generate enough electricity. This program is administered by the Vermont Public Utility Commission and is offered by all public utility service providers operating within the state.

Net metering also lets you earn credits for sending any excess solar energy to the grid. These credits can offset the cost of electricity consumed at other times. In Vermont, you're credited at the full retail rate for energy you send to your local grid.

It’s working out well for C. in West Windsor, Vermont. Their system generates more power than used. “I'm net negative, so grid connected, but exclusively using solar power in the aggregate,” they told us. “My project is in Vermont where it's not sunny all the time, but if I look at it over the course of the year, it generated more power than I use.”

5. How long you plan to stay in your house

Solar panel installations are expensive, and it takes years for electric bill savings to make up for the initial cost. Solar panels typically pay for themselves within 7.5 years in Vermont. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

Solar panels last 25 to 30 years.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow, but you miss out on some of that $70,243 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

6. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits; plus, you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

• Solar loan: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay your loan off, you own your system outright.
• Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
• Power purchase agreement: Similar to leasing, a power purchase agreement (PPA) lets homeowners install solar panels without the upfront costs. You sign a long-term contract with a solar services provider to purchase the electricity generated by the panels at a predetermined rate. The provider owns and maintains the panels throughout the agreement, which usually lasts 10 to 25 years.
• Home equity loans or lines of credit (HELOC): Eligible homeowners can borrow against equity in their house to finance a solar panel system. These often have variable interest rates, meaning monthly payments can increase over time.

7. The solar company you hire

People have had mixed experiences with solar companies. In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery. 

Monthly costs: solar payments vs. savings

Think of going solar in terms of your monthly costs. Given rising energy costs in Vermont and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

• How old are my appliances? The first step is to ensure that your electrical loads are as small as possible. If you have an older refrigerator or air conditioning unit, for instance, it’s smart to upgrade those before investing in solar panels. That way, you can get a smaller system, which will be cheaper overall.
• What is the size and angle of my roof? Vermont (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
• What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels.
• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Vermont averages three to five peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.

Pros and cons of solar panels in Vermont

It’s a common misconception that solar panels will completely eliminate your monthly power bill — this is not always the case. Still, you’ll likely be paying much less than you would for traditional utility bills.

Benefits of solar panels in Vermont

• Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
• Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
• Cheaper energy bills: The average homeowner in Vermont uses a lot of power, which adds up to a lot of savings when you switch to solar. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). Solar panels also protect you from future energy cost increases.

Drawbacks of solar panels in Vermont

• Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Vermont. That way, you can store energy at home instead of tapping into the local grid when you need to.
• Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.
• Energy production varies: Vermont has long, cold winters and receives less sun than states located farther south. Solar panels still can work on cloudy days and actually perform more efficiently in cooler temperatures. However, the overall energy production might be lower than in sunnier climates. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

One resident, John in Mount Holly, Vermont, said his panels don't make power when covered in snow: “If I had a steeper pitch, the snow probably would slide off on its own. But because of a low pitch on my roof, the snow tends to stick. So, every winter, I'm used to going up on my roof, shoveling snow off. That's fine. But it's when my entire roof is covered in solar panels and I have to be gingerly pulling it off, then it becomes kind of an issue. And it's more time-consuming,” he told us. 

» MORE: Solar energy pros and cons

Find solar companies in Vermont

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Vermont to learn more.

Bottom line: Is going solar in Vermont worth it for you?

Going solar in Vermont might be easier than you think. The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. For a lot of homeowners, it ends up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone.

Solar costs vs. savings: Vermont and nearby states