Investment Tax Credit

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Eligibility: 
Commercial
Industrial
Agricultural
Savings Category: 
Solar Water Heat
Solar Space Heat
Geothermal Electric
Solar Thermal Electric
Solar Thermal Process Heat
Solar Photovoltaics
Maximum Rebate: 

No maximum specified.

Program Info
Sector Name: 
State
Administrator: 
Vermont Department of Taxes
State: 
Vermont
Program Type: 
Personal Tax Credit
Rebate Amount: 

7.2% for solar in service on or before 12/31/2019.
2.4% for geothermal electric.

Summary: 
Vermont offers an investment tax credit for installations of renewable energy equipment on business properties. The credit is equal to 24% of the "Vermont-property portion" of the federal business energy tax credit. For solar, small wind, and fuel cells this constitutes a 7.2% state-level credit for systems placed in service on or before 12/31/2019. This credit will step down (according to the federal tax credit's step-down schedule) to 6.24% for systems placed in service by 12/31/2020 and 5.28% for systems placed in service by 12/31/2021. After this date, solar technologies are eligible for a 2.4% credit. The geothermal tax credit is 2.4% indefinitely.* Any unused tax credit may be carried forward for 5 years.

History

Vermont created this credit starting for Tax Year 2002 and provided an additional incentive for solar investments for Tax Year 2008 (via S.B. 209). The solar-specific tax credit was amended several times (by the Vermont Energy Act of 2009 (H.B. 313, May 2009), by H.B. 781 in June 2010 and again by H.B. 56 in May 2011). The solar credit was equal to 100% of the "Vermont-property portion" of the federal business energy tax credit for solar from 2008 through 2010. In effect, this constituted a 30% state-level credit for solar during those years. As of 2012, the solar business tax credit has expired and the investment tax credit remains.  

The federal business energy investment tax credit was extended in December 2015. See DSIRE's entry for this credit to learn more.

*The federal investment tax credit (ITC) for solar is 30% of expenditures. For geothermal electric systems, the ITC is 10% of expenditures. Vermont's investment tax credit is equal to 24% of the federal ITC for these technologies.