2014 Legislative Lowdown on Clean Energy and Climate Action

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The 2014 legislative session drew to a close late Saturday evening, May 10. There was some important progress made to advance distributed, renewable energy generation and also a real disappointment, in particular a failure to find the money needed to maintain the state’s successful low-income weatherization program.

Below is a summary of and links to more info about:

  • The expansion of net metering — a success for clean, distributed renewables!
  • The low-income weatherization letdown…
  • A bill that moves Vermont’s energy efficiency work towards an overall “total energy” by expanding heat pump opportunities.
  • Changes to solar property taxes.

Net Metering:
On this important program, there was a lot to celebrate this year. On a brilliantly sunny April 1, 2014, Governor Shumlin signed H.702 — an expansion of the state’s successful net metering program — into law. That action once again opened the doors for Vermont homeowners, businesses, communities and farmers to go solar and be part of the state’s clean energy future. Read far more about the changes to net metering here.

Low Income Weatherization:
Despite significant momentum and your useful calls and connections with lawmakers, the Legislature failed to take needed action to keep the low-income weatherization program adequately funded. Without the $2 million need for FY 2015 — from an appropriation or a ½ percent increase to the existing Gross Receipts Tax — it’s unclear what the ramifications will be for the successful (and backlogged) program. It could mean job cuts and layoffs. It’s likely the state will be much harder pressed — without a real commitment to funding the program soon — to meet its goal of retrofitting 20,000 low income homes by 2020. And the waiting list for those folks who want and need to stop wasting heat and money will only grow. Not to mention, since tightening up our homes and buildings is one of Vermont’s most powerful greenhouse gas reduction strategies, the costs to our climate increase as we put these investments off… again.

There were some real legislative champions on this issue who deserve thanks, however, including Senators Lyons, Pollina and Ayer. As well, many House members — all members of the Climate Caucus — also pushed hard on this issue. Among them were Representatives Hooper, Sharpe, Pearson, O’Brien and McCormack. If you have a minute and can say a quick “thank you” for their hard work, that’s always much appreciated. Find their contact info here>> 

As well, despite the Governor’s oft-noted commitment to weatherization and efficiency, the Administration made it clear in last-minute, surprising testimony that they wouldn’t support an increase in the Gross Receipts Tax. That testimony played a powerful role in changing the positive direction this effort was headed. So… please write or call Governor Shumlin and ask for his future commitment to and investment in weatherization, efficiency and the kinds of clean energy solutions needed to stem the climate crisis and build a robust 21st century economy. Reach him here>>

Heat Pump Expansion*
S.202 moves Vermont’s energy efficiency work towards an overall “total energy” focus. Specifically, it authorizes Efficiency Vermont and Burlington Electric Department to provide incentives for new, super-efficient electric heating technologies such as air source heat pumps. In the past, the focus has largely been on reducing the use of electricity. What S.202 recognizes is that in some cases, it may make sense to use more electricity, if that is going to offset the use of less-efficient, more-polluting energy sources such as heating oil or propane. After S.202 is signed into law, which is expected in the coming weeks, there will be a Public Service Board proceeding to ensure that this shift in focus will benefit Vermont energy users and the environment. Assuming approval by the Public Service Board, the new program would likely go into effect in early 2015. In the meantime, you can still learn a lot about this exciting new way to reduce energy costs and greenhouse gas emissions here.

Solar Property Tax*
The Legislature also made some important changes to the solar property tax, in an effort to create more consistency and continue to incent solar.

State Education Fund Tax (currently $4/kW on 10kW+):

  • Now exempts systems 50kW (AC) and under from state tax (up from 10kW).
  • Removes the sunset provision in 2023 that would have caused the 50kW exemption to automatically expire without legislative action.
  • Systems over 50kW will continue to be taxed at the $4/kW rate.

Municipal Tax (currently Fair Market Value determined by Sandia model and tax based on town tax rate):

  • New methodology that averages the value of a system over 25 years, with $0 value in year 26.
    ◦ Use of 70% of the value from Sandia PV Value tool and then apply that each year for 25 years x town tax rate
    ◦ Net-metered systems with an adder will have no electric rate escalator as an input in the PV Value Tool.
  • Systems pay tax on 25 years or until project is removed, whichever is lesser (meaning no tax post 25 years).
  • The firsIMG_4649t 50kW (AC) of net-metered systems will be exempt from all municipal taxes.
  • Preexisting municipal agreements will not be affected. All projects retain the option to enter into agreements or seek exemptions for systems (utilizing either Title 24 and 32) and can now use this methodology as a ceiling to seek agreements.
  • Removal of Title 32’s inclusion of “1/2 acre” for exemption, which was a barrier for towns to exempt solar from muni tax.

While there are indeed some important successes to celebrate, considering the challenges and opportunities before us, we have far, far more work to do. That will require real need to work more closely with policy makers to ensure bold, substantive and swift action.

For more information about any of these bills or to explore ideas and opportunities to shape future policy directions, please contact Johanna Miller at jmiller@vnrc.org or 802-223-2328 ext. 112.

* Many thanks to Vermont Energy Investment Corporation’s George Twigg and All Earth Renewables Andrew Savage for their help in providing these updates — and all they do.