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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Vermont

Updated August 2011

What public-purpose-funded energy efficiency programs are available in my state?

In 1999, Vermont's state legislature approved legislation giving the Public Service Board (PSB) the authority to establish a systems benefit charge to fund statewide energy efficiency programs via a non-utility entity (in lieu of utility-specific programs). Subsequently, the PSB approved the creation of an "energy efficiency utility" to run energy conservation programs in the state. The program administrator, Efficiency Vermont, had its budget increased by the PSB in 2006 such that funding levels moved from roughly $19 million in 2006 to over $35 million in 2010 (including low income and residential programs). Revenues are collected through a statewide charge on consumers' utility bills.

As Vermont's energy efficiency program administrator, Efficiency Vermont offers a variety of programs for commercial and industrial customers.

  • Prescriptive rebates, as well as custom rebates and technical assistance for more complex or unusual technologies, are available for a variety of projects, including HVAC equipment (including gas efficiency products such as high-efficiency furnace and boiler retrofits), energy-efficient lighting, compressed air systems, refrigeration and controls, and data centers & IT. Preapproval is required for some rebates.

  • The New Construction and Major Renovation program offers technical assistance and financial incentives for efficient design, construction and operation of commercial buildings greater than 10,000 sq ft. Those interested in this program should contact Efficiency Vermont early in the design process.

  • Technical assistance and, in some case, financial incentives are available for tuning up heating, cooling and other systems through the Commissioning Existing Buildings program.

What utility energy efficiency programs are available to me?

Burlington Electric Department (BED) offers a variety of rebates for energy-efficient products, such as HVAC, lighting, refrigeration, and compressed air systems.

Vermont Gas's WorkPlace programs provide technical assistance and financial incentives for energy efficiency measures in new and existing buildings, including design and permit assistance, financial assistance, and rebates on equipment ranging from furnaces to waste heat recovery equipment.

What load management/demand response options are available to me?

The Independent System Operator New England Inc. (ISO-NE) offers its Demand Response Programs, which provide payments to electricity users for load reductions (of as little as 100 kW), either by reducing usage or by operating on-site generation during periods of high demand. Customers may participate in the program through any participating member ("Enrolling Participant") of the New England Power Pool, such as a utility company, power marketer, competitive energy supplier, or independent curtailment service provider (CSP). The Enrolling Participant is allowed to aggregate load to reach the quantity qualification limit, so customers interested in these programs with less than 100 kW to offer may want to contact their utility or other eligible party. ISO-NE offers several options:

  • The Real-Time Demand Response Program provides an opportunity for customers to receive payments for voluntarily responding to system emergencies. Participants are paid for actual load reductions, based on the higher of the real time zonal price or a guaranteed floor price ($350/MWh for customers that can respond within 2 hours and $500/MWh for those that can respond within 30 minutes). Participants may receive additional incentives by qualifying as an installed capacity (ICAP) resource for their load reduction capacity, although response to system emergencies then becomes mandatory. In order to facilitate notification of emergency events and verification of load curtailments, customers must have an approved Internet-Based Communication System (IBCS) installed. Participating customers must also have interval metering installed at their facility.

  • The Real-Time Profile Response Program provides remuneration to customers without interval metering for voluntarily responding to system emergencies. The enrolling participant must have the physical ability to interrupt loads at the customer's facility within 30-minutes' notice of a system emergency. Payment for verified load reductions is based on the real-time zonal price, with a $100/MWh floor price. Participants may receive additional incentives by qualifying as an ICAP Resource for their load reduction capacity, although response to system emergencies then becomes mandatory.

  • The Real-Time Price Response Program provides customers with the opportunity to receive payments for voluntarily reducing load during periods when the real-time zonal price is projected to be high. ISO-NE will notify participants either the night before or day of an event if the zonal price is expected to exceed $100/MWh ($0.10/kWh). Participants can voluntarily respond to the notification and submit load data to verify their load reductions. Payment for verified load reductions is based on the real-time zonal price, with a $100/MWh floor price. Customers must have interval metering installed at their facility to participate in this program.

  • The Day-Ahead Load Response Program is a more sophisticated variant of the Real-Time Price Response Program. Customers submit offers of hourly load reductions into the day-ahead market and are then notified by their enrolling participant if the offers are accepted. If so, the customer must drop load during the cleared hours but is remunerated by the greater of its bid or the actual clearing price for those hours. Customers must have interval metering installed at their facility to participate in this program.

ISO-NE's Forward Capacity Market (FCM) allows customers to bid their load reduction capabilities – whether constant (such as an indoor lighting retrofit project), seasonal (such as a new energy-efficient chiller plant), or dispatch able (such as a back-up generator or demand management actions) – into a forward capacity auction that pits demand-side resources against supply-side ones. Bids that are accepted are paid the auction clearing price. These auctions take place periodically for commitment periods several years in the future. For instance, the first auction, for resources whose contribution to the grid began in June, 2010, took place in February, 2008. Future auctions are announced at the FCM web site.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) website provides information on programs that offer incentives for renewable distributed generation.

The Vermont Department of Public Service offers several options for financial assistance for renewable generation projects:

  • The Vermont Small Scale Renewable Energy Incentive Program has been operating since 2003, but in 2010 began being funded out of monies from the American Recovery and Reinvestment Act (ARRA). Under the Special Category Program, federal customers can qualify for a variety of renewable technology incentives for government buildings. Photovoltaic systems are eligible for a sliding scale of incentives: $2.50 per watt for the first 10 kW, and $1.50 per watt for the next 50 kW. Solar hot water systems are eligible for $3.00 per 100 Btu/day up to 1,500 kBtu.day. Wind projects may receive $4.50 per watt up to 10 kW, and $3.00 per watt for the next 70 watts.

The Vermont Clean Energy Development Fund Loan Program provides low-interest (2%) loans of $50,000 to $750,000 for a variety of clean electric energy projects. The loan can be used for purchasing land or equipment or for working capital, and can cover up to 90% of project costs. Through its SolarGMP program, Green Mountain Power pays customers who have photovoltaic systems with net metering an additional $0.06/kWh for power produced by the PV system.

In 2009, Vermont passed the Sustainably Priced Energy Development Program (SPEED), a renewables standard offer, or feed-in tariff, that allows the owners of small renewable electricity generation facilities (up to 2.2 MW) to sign long-term contracts of 10 to 20 years (25 years for solar) for sale of their power to utilities. Standard rates — which may be modified by the Vermont Public Service Board — range from 9 to 24 cents/kWh, and depend on the technology.

Are there energy efficiency programs sponsored by the state government?

For information on energy efficiency programs sponsored by the state, refer to Vermont's public-purpose programs above. For further information contact the Energy Efficiency Division of the Department of Public Service.

What additional opportunities are available to me?

No utilities in Vermont have area-wide contracts with the GSA.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.