What happens to solar in Vermont after the One Big Beautiful Bill Act?

For the last few decades, the federal government has offered homeowners tax credits for installing rooftop solar arrays. Those credits are set to go away at the end of this year, thanks to President Donald Trump’s One Big Beautiful Bill Act.

It also sunsets incentives for commercial projects and scales back incentives for battery storage.

It’s a move local solar developers and regulators say will throw Vermont’s industry into turmoil, put upward pressure on electric rates and hurt burgeoning programs to help low-income households own solar.

Impacts on Vermont’s residential solar industry

A typical residential rooftop solar array costs between $20,000 and $30,000, said Peter Sterling, with the trade group Renewable Energy Vermont.

The federal tax credit for residential rooftop solar projects has been around in some form since the early 1990s, but was expanded under the Biden administration so that homeowners could recoup 30% of the cost of a project in tax breaks, and more if they also installed batteries.

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Under the new law, those credits will go away altogether at the end of this year, repealing decades of incentives that previously enjoyed bipartisan support. (The commercial solar tax credit is set to sunset in 2027, and the One Big Beautiful Bill Act also restricts tax incentives for batteries starting next year.)

Vermont Department of Public Service

Graphs showing the growth of solar installations in Vermont, from a 2023 Vermont Department of Public Service report. Net metering allows utility customers to generate their own power from solar, and sell excess power to utility companies. Behind-the-meter solar refers to projects that aren't controlled by the utility company, and where power is typically consumed on the same site as the panels.

Alexander Mintz owns Power Guru, a Bennington-based company that installs solar arrays and battery systems in Southern Vermont. He expects many small and medium-sized solar developers in Vermont will go out of business or have to turn away rooftop solar customers.

Power Guru is anticipating a pretty serious blow to their business in 2026, Mintz said, and will face tough choices that could affect their 10 employees.

“They are not limited to downsizing,” Mintz said. “We’re going to try to avoid that by training quickly on other technologies that we might be able to offer, but there is a lot of uncertainty about whether or not those transitions will amount to sustainable revenue.”

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He said the company could pivot to installing heat pumps and doing HVAC work — though federal incentives for those efficiency technologies are also targeted by the new law.

The removal of tax credits could also have broader implications for the state’s economy: The renewable energy sector employs about 18,000 people in the state, or about 6% of Vermont’s workforce. That’s the highest per capita share of any state in the country.