Energy Incentive Programs, Vermont
Updated November 2009
Below you will find questions and answers regarding Vermont's utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.
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 efficiency programs in the state. The energy efficiency 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 $36 million in 2008. Revenues are collected through a statewide charge on consumer utility bills (approximately 5 mills/kWh in 2008).
Efficiency Vermont offers commercial and industrial customers extensive rebates covering equipment ranging from air-conditioners to vending machines. Other programs that may be of interest to Federal customers include:
Customized design and construction incentives that promote energy-efficient and integrated design for new construction and major renovation projects and cover up to 50% of the incremental costs of efficiency upgrades.
Technical assistance and incentives for HVAC equipment (including gas efficiency products such as high-efficiency furnace and boiler retrofits) and energy-efficient lighting.
What utility energy efficiency programs are available to me?
Burlington Electric Department (BED) partners with Efficiency Vermont to offer a variety of rebates for energy-efficient products like HVAC, lighting, and refrigeration.
Vermont Gas's WorkPlace programs provide technical assistance and 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 (ISO-NE) offers demand response programs that 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.
The ISO-NE 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 dispatchable (such as a back-up generator or demand management actions) – into a forward capacity auction that pits demand-side resources against supply-side resources. 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 must begin on June 1, 2010), took place in February 2008. Future auctions are announced at the FCM Web site. However, in the "transition period," in effect before the first commitment period begins in June 2010, so-called Other Demand Resources (such as energy-efficiency, load management, or distributed generation) of at least 100 kW installed after June 2006 are eligible for fixed "installed capacity" payments from ISO-NE. To qualify for these payments, demand resources must participate in either the Real-Time Demand Response Program or the Real-Time Profiled Response Program. The rate of remuneration is $4.05/kW per month in 2009 through 2010. Applications must include a measurement and verification plan to assure ISO-NE of the ability to perform.
What distributed energy resource options are available to me?
The Database of State Incentives for Renewable Energy (DSIRE) 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:
Rebates of up to $20,000 (up to 50% of project cost) for wind and up to $8,750 for solar water heating and photovoltaic installations are available through the Vermont Solar and Small Wind Incentive Program.
The Vermont Clean Energy Development Fund Grant Program awards grants of $60,000 to $250,000 in four project categories: Pre-Project Financing, Small-Scale Systems, Large-Scale Systems (15 kW or larger), and Special Demonstration Projects. Projects must be cost-sharing and consist of grid-connected renewable or combined heat and power generation.
The Vermont Clean Energy Development Fund Loan Program provides low-interest loans of $50,000 to $1,000,000 for a variety of clean electric energy projects. The loan can be used for purchasing land or equipment or for working capital.
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 system.
In May 2009, Vermont passed a renewable 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 12 to 30 cents/kWh depending on the technology. This program went into effect September 2009.
Are there energy efficiency programs sponsored by the state government?
Refer to Vermont's public-purpose programs (above) for information on energy efficiency programs sponsored by the state. 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 areawide contracts with the General Services Administration (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.