Vermont Feed-in Tariff

On May 27, 2009, “The Vermont Energy Act of 2009” (H. 446) became law, establishing a statewide feed-in tariff to incentivize in-state renewable energy facilities.  Feed-in tariffs require utilities to purchase electricity generated by renewable sources at a premium. The Vermont law establishes  long-term contracts--25 years for solar and 20 years for all other included renewables--for generating facilities that use wind, solar, hydropower, biomass, or methane derived from agricultural or landfill processes to sell electricity into the grid at a premium. Incentives will be offered to every participating renewable generator with a nameplate capacity of 2.2 MW or less. The law sets a program cap of 50 MW, after which new generators will no longer be offered the incentives.

Feed-in tariffs have been a popular policy mechanism in Europe, particularly in Germany where they have contributed to immense growth in renewable generation.  Feed-in tariffs have recently gained some interest in the United States, with the California Public Utilities Commission approving a tariff in January of 2008 and the City of Gainesville, Florida implementing one in February of this year. 

The law also allows for the siting of wind energy installations on state land, establishes a clean energy development fund to promote renewable energy and efficiency projects, passes through the Vermont-property portion of the federal business solar energy investment tax credit to taxpayers, revises commercial and residential building energy standards, and calls for a pilot project on “green growth zones” that utilize combined heat and power and renewable energy technologies.

Press Release