VERMONT RESIDENTS - PACE LOAN FUND

The PACE (Property Assessed Clean Energy) program allows for Vermont residents to finance your system via a low-interest loan. Your town must have established a PACE district through popular vote to be eligible. This program is administered through Efficiency Vermont. Click here to view current PACE districts by town and program details.

BURLINGTON, VT. RESIDENTS:

Burlington Electric administers the PACE program within City limits. You can finance the cost of your PV (and other selected energy projects) system through the City's PACE program. it offers attractive interest rates and terms, and the payment appears as a monthly charge on your Burlington Electric Department (BED) bill. Click here to download full details of how the program works.

If you have been considering a solar electric (PV) system for any length of time, you may have come across several companies offering lease-to-own packaged systems (or perhaps in-house financing, more about that later). While little or no money down on the surface seems attractive, all is not what it seems.

It's no secret that you will pay more with any financed product, as opposed to buying up front. And in the case of lease to own solar systems, there are several factors which work against the lessee, some obvious, some hidden in the typical lease agreement.

Unfortunately the Vermont Small Scale Renewable Energy Incentive Program no longer exists, as of 12/31/2014.

AND AS ALWAYS, LOOK BEFORE YOU LEASE!!(or finance through a special "in house" rate)

VERMONT Businesses

For Commercial Systems (including industrial and agricultural there is a State Investment Tax Credit of 7.2% of the system cost – for systems installed no later than 12/31/2016. All equipment must meet the same requirements as the Federal Investment Tax Credit. This credit may be carried over for 5 years.

Commercial renewable energy systems may also be depreciated according to the accelerated 5-year MACRS depreciation schedule which, depending on your business’s tax bracket, can help reduce your system payback rate even faster. In all cases, we recommend that you work closely with your accountant who will be more familiar with how the potential benefits of these incentives relate to the unique circumstances of your tax situation.

federal tax credit

The I.R.S. allows for a tax credit of 30% of the installed cost of the system. This is not a deduction, it is flat 30% reduction in Federal tax liability. Both residential and commercial systems are eligible. The credit can be carried over for an additional year, if not used entirely in the year of installation. Recently, the tax credit has been extended at 30% until December 31, 2019, with reductions beyond that point.

• Because the system is leased, not owned, the customer cannot take advantage of the 30% Federal tax credit or the Vermont incentive. These monetary benefits are what makes the leasing companies business model work. A pretty sweet deal for the leasing company. The 30% tax credit, when used by the homeowner directly, makes the up-front purchase much more affordable.
  
• The leasing company may promote up to a 20 year or more warranty on the system. What may not be clearly evident is that all major components (panels, inverters, etc.) are factory-warranted for at least 20 years (most brands longer). The leasing company is not offering any value-added advantage as a result. It is pure and simple a marketing gimmick.
  
• And with a leasing company dependent upon tax credit and incentive capture to make their business model work, what happens to your lessor provider when these benefits sunset (and they are bound to someday - maybe sooner than later)? Will they be in business ten years down the road to provide the hyped warranty support? After all, they are only in this business to profit from tax credits and incentives.
  
• Some companies may offer low-interest loans through a "special" in-house buy down rate with a bank or credit union. But they also overcharge by 20% on the installed cost. So the "special" buy-down is useless. Your payment is no less than if you went to the bank directly and financed at a higher rate, with a reasonable installed cost. Again, more smoke-and-mirror marketing. If you need to borrow the money to purchase in full, you will be much better off applying for a solar loan or home equity line of credit through a local bank or credit union (or an entity such as Vermont's PACE program), and most likely at a lower or equal monthly payment.You don't need a middle-man to finance your system.
  
• Is a long-term lease really peace-of-mind? Just like a home mortgage, your lease agreement is an asset to the lessor, and could be bundled and sold to a larger finance company. And what do you do with a lease if you want to sell your house before it expires? Leasing could adversely affect the ability to sell your home.