Solar photovoltaic plants in Vermont are potentially subject to a tax on plant capacity and municipal property tax. Depending on several factors, a plant can be subject to both taxes, one of the taxes, or be exempt from both taxes.
Vermont imposes a Solar Energy Capacity Tax on operating solar plants with a plant capacity of 50 kW or more. The tax is imposed at a rate of $4.00 per kW of plant capacity. Plant capacity is determined by the rated nameplate capacity stated on the plant’s Certificate of Public Good (CPG) unless a taxpayer can demonstrate that another method is more accurate.
Solar plants subject to the Solar Energy Capacity Tax are exempt from the education property tax. Solar plants with a plant capacity of less than 50 kW and are (1) on a net-metered system, or (2) off grid and only provide power to one property, are exempt from both municipal and education property taxes. Municipalities may also vote to exempt some solar plants from municipal property tax.
Solar plants that are not exempt from municipal property tax must be valued. Vermont law requires a solar plant to be valued using the discounted cash flow method as described in 32 V.S.A. § 3481(1)(D) and designated by the Department’s Division of Property Valuation and Review.
Form PV-604, Vermont Photovoltaic (PV) System Inventory Form is a document used by municipalities to record property information. See Taxation of Solar Plants for more information.