In Vermont, a typical residential solar panel system costs $10,319 to $27,666, depending on the size of your system and what financial incentives you qualify for.
Jump to insightThe 30% federal solar investment tax credit (ITC) is the most significant solar incentive for most homeowners in Vermont.
Jump to insightLeasing or entering a power purchase agreement (PPA) is often cheaper upfront, but you won’t be eligible for the federal solar tax credit and other financial incentives.
Jump to insightResidential solar panel incentives in Vermont
The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Vermont. If you install a residential solar panel system by the end of 2032, you can deduct 30% of the system's total cost — including equipment, labor and permits — from your federal taxes. The credit drops to 26% in 2033 and 22% in 2034.
For example, for a $20,000 system, you can get a $6,000 tax credit. The solar tax credit is not a rebate or refund — you must claim it when you file federal taxes in the year that your solar panel system becomes operational. To do this, you have to complete Form 5695.
In addition to ITC, residents can benefit from local financial incentives, including grants, rebates and loan programs.
- 100% sales tax exemption: Vermont’s renewable energy system sales tax exemption originally applied only to net-metered systems, but it now applies to any renewable energy systems of up to 500 kilowatts (kW), small combined heat and power systems of up to 20 kW and all solar water-heating systems. It applies to both grid-tied and off-grid systems.
- Local property tax exemption: Your city might let you off the hook for property taxes on renewable power systems like solar panels. The details are up to each town to decide, so you'll want to contact your local city hall to see what kind of deal they're offering.
- Uniform capacity tax and exemption: If your solar setup is under 50 kW of power and 600 kWh of storage, you're off the hook for uniform capacity tax. If your system is under 50 kW, there's a catch — it either needs to be net-metered (sharing that clean energy with the grid) or completely off-grid. If you meet that requirement, you also get a break on municipal property taxes.
Federal solar tax credit expires at the end of 2025
The ITC is now set to expire at the end of the year, much earlier than previously scheduled. The credit was expected to drop gradually, then fully expire in 2035 — but those future step-downs have been eliminated under the “One Big Beautiful Bill,” signed in July of 2025. This means you have until Dec. 31, 2025, to install and pay for a system to qualify for the 30% credit.
Additional solar incentives in Vermont
Check DSIRE for the most comprehensive source of information about solar incentives and policies in Vermont.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Investment Tax Credit | Personal tax credit | Varies | Solar water heat, solar space heat, solar thermal electric, solar thermal process heat, solar photovoltaics, fuel cells using renewable fuels | Commercial, industrial, agricultural | Vermont Department of Taxes |
| Commercial Energy Loan Program | Loan program | Up to $2,000,000 | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Commercial, local government, nonprofit | Vermont Economic Development Authority (VEDA) |
| Agricultural Energy Loan Program | Loan program | Up to $5,000,000 | Solar thermal electric, solar photovoltaics, fuel cells using renewable fuels | Agricultural | Vermont Agricultural Credit Corporation (VACC) |
What to know about net metering in Vermont
Installing renewable energy systems and selling excess power back to the grid is simple and beneficial in Vermont. This process, called net metering, is regulated by the Public Utility Commission.
It's a streamlined, efficient process that expedites applications for systems that are 15 kW or smaller. Simply secure the certificate, meet the utility company's connection rules and — as long as no issues arise within 10 days — you're good to go. The process is similar for larger solar installations, but the utility company's review period extends to 30 days.
Grid-connected systems can still tap into the local power grid when needed. The alternative is to store it in a battery. That way, you can still turn your lights on when panels aren’t generating electricity, like at night or on especially cloudy days. The biggest downside is that solar storage battery costs can be almost as high as the panels — $7,000 to $18,000.
How much are solar panels in Vermont?
Before considering the federal solar tax credit, solar panel costs in Vermont typically range from $13,833 to $27,666. Your system size greatly affects how much you pay overall. The typical system size for solar systems in Vermont is 11.2 kW (kilowatts).
How do you know if the average size system is enough for your home or if you need a bigger one? Check the amount of electricity you used last year in kilowatt-hours (kWh). You’ll find this information in your electric company account dashboard online. Then, divide your annual kWh by 1,200 to find the system size you need. For example, if your home used 15,000 kWh last year, you would need a 13-kW system.
Average solar cost by system size in Vermont
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,833 | $16,600 | $19,366 | $22,133 | $24,899 | $27,666 |
| After federal tax credit | $10,319 | $12,383 | $14,447 | $16,511 | $18,575 | $20,639 |
Solar resources in Vermont
Here are some additional resources that can guide you through transitioning to solar in Vermont.
- A Vermonter's Guide to Residential Solar
- Vermont Energy & Climate Action Network
- Renewable Energy Vermont
- Efficiency Vermont
- Vermont Solar Rights Laws
- Community Renewable Energy Program
- Expedited Permitting Process for Solar PV Systems
Find solar companies in Vermont
Good solar companies help you navigate local incentives, permitting and net metering policies. Compare our picks for Vermont’s top solar companies to learn more.
| Company | Customer rating | Pro install | Payment options | Year founded | |
|---|---|---|---|---|---|
 Sunrun | Get Started | 4.3 |  | Cash, loan, lease | 2007 |
 ShopSolar | Learn More | 4.7 |  | Cash, loan | 2018 |
FAQ
Can I get free solar panels in Vermont?
No, but you can lease solar equipment or enter a power purchase agreement (PPA) with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.
» FREE SOLAR PANELS: Are they really free?
How can I pay for solar panels?
You can pay cash, but most people finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You also have the option of getting a lease or power purchase agreement.
» SOLAR PANELS: Lease vs. buy
How much can I save with solar panels in Vermont?
On average, Vermont homeowners with solar panels avoid $41,197 in utility costs over 25 years. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
Is my HOA allowed to restrict solar panels?
No. Vermont solar rights laws protect the use of renewable energy devices like solar panels and forbid any agreements that would prevent their use. There may be some rules about where on a roof solar collectors can be placed, but these can't interfere with the device's effectiveness. Municipal laws also can’t regulate the installation or operation of solar devices on flat roofs.
What has Vermont’s investment in solar been so far?
Total solar investments in the state amount to $851 million, according to the Solar Energy Industries Association.
Bottom line
Despite its small size, Vermont is a national leader in renewable energy adoption, especially in the area of solar power. Solar installations have increased quickly across the state, bolstered by supportive state policies.
The ConsumerAffairs research team also conducted an in-depth analysis to determine how much it costs to go solar in Vermont and solar costs in other states. Turns out, it’s worth it for many homeowners, particularly in Vermont.
Solar costs and savings: Vermont and nearby states
| 6-kW system cost (before incentives) | 10-kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Massachusetts | $18,536 | $30,893 | 7.3 kW | $3.09 | $155,464 |
| New Hampshire | $19,181 | $31,968 | 6 kW | $3.20 | $48,186 |
| New York | $16,641 | $27,734 | 6.9 kW | $2.77 | $57,678 |
| Vermont | $16,600 | $27,666 | 11.2 kW | $2.77 | $41,197 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:- DSIRE, "Vermont Programs." Accessed March 29, 2024.
- EnergySage, “The cost of solar panels in Vermont.” Accessed March 29, 2024.
- Solar Energy Industries Association, "Vermont Solar." Accessed March 29, 2024.
- SolarReviews, “How much do solar panels cost in Vermont, 2024?” Accessed March 29, 2024.
- Vermont General Assembly, “ Title 30: Public Service, Chapter 089: Renewable Energy Programs.” Accessed July 17, 2023.
- State of Vermont Public Utility Commission, “Net-Metering.” Accessed July 17, 2023.
- Vermont Department of Taxes, “Solar Plants Subject to the Uniform Capacity Tax.” Accessed July 17, 2023.
