Residential solar panels are eligible for a 30% tax credit

As we draw near the end of 2024, we are approaching the end of what will most likely be the hottest year on record since record keeping began in 1880, according to the National Oceanic and Atmospheric Administration (NOAA). As temperatures rise, the federal government and state of Vermont have created incentives to fight climate change. Unfortunately, the election of Donald Trump puts many federal incentives in limbo. Trump has vowed to repeal the Inflation Reduction Act (IRA), which authorized over $300 billion in spending toward clean energy and climate action. The IRA includes tax credits and rebates for homeowners who make clean energy upgrades to their homes, such as installing solar panels and heat pumps. With the incoming change in federal leadership, these credits and rebates are under threat.

SOLAR

The federal Investment Tax Credit (ITC) is the most well-known financial incentive for homeowners to install solar. Thanks to the Inflation Reduction Act, passed in 2022, the ITC is 30%, meaning that 30% of the cost of a solar photovoltaic (PV) system, home batteries, or a geothermal system can be claimed on federal income taxes. This is a dollar-for-dollar reduction on your income tax. Experts believe that the solar ITC likely won’t be completely cut immediately under a Trump administration, but we can’t know for certain. It may be phased out sooner than 2033, which is the current timeline.

ELECTRIC VEHICLES

There are available federal incentives for electric vehicles (EVs), but it is vital to act now if you want to receive them. According to various sources including the New York Times, President-elect Donald Trump’s transition team is looking into eliminating tax credits for EVs. This may be surprising, as the CEO of electric car manufacturer Tesla, Elon Musk, has been appointed by Trump to lead the new “Department of Government Efficiency.” However, Musk stands to benefit from a reduction in the tax credit, as it would hurt Tesla’s competitors.

The current federal EV tax credit is for 30% of the cost of the vehicle up to $7,500 for new EVs, but be sure to read the requirements to receive the full credit. There is also a federal tax credit for used EVs–if you buy a qualified used EV for $25,000 or less, you may be eligible for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. The state of Vermont recommends that you make your EV purchase before mid-January to secure this funding.

Many of the State of Vermont’s EV incentives have expired, as the program’s funding is now fully reserved, so programs are currently closed to new applications. Electric utilities are still offering incentives, including Green Mountain Power (GMP), which offers Up to $3,200 for the purchase or lease of new or used all-electric or plug-in hybrid electric vehicles. GMP also offers a free Level 2 charger with EV purchase, and discounted off-peak EV charging rates.

WEATHERIZATION

Weatherization is on many people’s minds as temperatures dip down to the single digits. Vermont’s Weatherization Assistance Program (WAP) provides free home weatherization if you meet household income limits. On average, this program makes about $10,000 worth of improvements per home and reduces drafts by about 40%. Visit https://dcf.vermont.gov/benefits/weatherization for more information and to see income guidelines.

The Home Performance with Energy Star (HPwES) program connects homeowners and certified contractors to assess home energy use and perform energy improvements. Currently homeowners can receive 75% of project cost back, up to $4,000. If your household income falls below moderate-income guidelines, you can receive up to $9,500 back. Low-income households are eligible for 90% of project costs back.

NEW VERMONT INCENTIVES

New this year, income-eligible households can get up to $15,000 cash back for home repairs that address barriers to weatherization, including ductwork, electrical, plumbing, remediation (asbestos, mold, vermiculite), ventilation, and repairs to the foundation, roof, siding, and windows. Efficiency Vermont is also offering an incentive to upgrade your home electrical system. Upgrading your electrical panel may be necessary before you install heat pumps or an electric vehicle charger. Customers are eligible to receive up to $10,000 cash back for this work if they are low-income, and moderate-income customers are eligible to receive 90% of eligible project costs up to a maximum incentive of $10,000.

There are a myriad of incentives, rebates, and tax credits available for upgrading your energy use in 2025, but federal incentives are less reliable. The sooner you act on purchasing an EV or installing solar, the better. Visit efficiencyvermont.com to learn more about state incentives for technology such as heat pumps, lighting, air conditioners, thermostats, furnaces, boilers and more. On average, each Vermonter is responsible for over 15 tons (30,000 pounds) of greenhouse gas emissions of air pollution per year. Make 2025 the year you reduce your carbon footprint.

Resource list:

• Join Sustainable Woodstock for a virtual event on Thursday, Jan 30th, 5:30-6:30 PM to
learn about Efficiency Vermont’s Home Performance with Energy Star home
weatherization program and home repair program. Register at:
Green Drinks: Home Weatherization with Efficiency Vermont•Visit this link to learn about solar tax credits
•Contact Drive Electric Vermont to learn about Electric Vehicle incentives
•For information on saving energy, rebates, weatherization, energy audits, and to find a
list of approved contractors, call Efficiency Vermont
•If you think you may qualify for free weatherization for low-income residents, contact
SEVCA