Return on Investment

Cost analysis for a 1.72 kW off-grid solar system in Rutland, VT vs. Green Mountain Power residential rates

1. Equipment Cost Summary

Item	Qty	Unit Cost	Total	Status
EG4 6000XP Inverter	1	$1,549.00	$1,549.00	Purchased
ECO-WORTHY Cubix 100 (2-pack)	1	$1,411.00	$1,411.00	Purchased
QCells Q.TRON BLK M-G2+ 430W (x4)+ IronRidge AIRE A2 racking system	1	$1,686.69	$1,686.69	Potential
Balance of System (BOS)Wiring, breakers, conduit, disconnect, fuses, misc	1	$450.00	$450.00	Estimate

Total System Cost	$5,096.69
Federal ITC (30%)Expired Dec 31, 2025 for customer-owned systems	-$0.00
Net System Cost	$5,096.69

Vermont exempts solar equipment from 6% state sales tax, saving an estimated $305.80 vs. taxed purchase. The prices above are actual purchase/quoted prices that already reflect this exemption.

Federal ITC: No Longer Available

The residential clean energy credit (IRC Section 25D) provided a 30% tax credit for customer-owned solar systems through December 31, 2025. On July 4, 2025, the One Big Beautiful Bill (H.R. 1) was signed into law, formally ending the residential ITC. Systems installed in 2026 and beyond receive no federal tax credit.Third-party-owned systems (leases/PPAs) under Section 48E may still qualify for credits through 2027 if construction begins by July 4, 2026, but this does not apply to our self-installed, customer-owned system.Had this system been installed before the deadline, the ITC would have saved $1,529.01, reducing net cost to $3,567.68.

2. Utility Rate Analysis

Green Mountain Power — Rate 1 (Residential)

Effective Oct 1, 2025

Energy charge	$0.21457/kWh
Customer charge	$0.626/day ($19.06/month)
Demand charges	None (residential Rate 1)
Rate structure	Flat rate — uniform $/kWh, no time-of-use tiers
All-in effective rate	~$0.24–0.25/kWh for typical usage (energy + customer charge amortized). We use the $0.21457/kWh energy charge only for savings calculations, as the off-grid system avoids the energy charge but the customer charge is a fixed fee regardless of consumption.

Rate Escalation Assumption

Assumed annual increase	3.5%/year
Rationale	VT PSD projects ~4.6%/year through 2030VEC actual: 1.96% (2022), 8.19% (2023), 8.33% (2024)Hardwick Electric avg: 1.79%/year since 20093.5% is a moderate long-term estimate
Projected rate in Year 25	$0.4899/kWh

3. Year 1 Savings Calculation

Savings formula:

Annual Savings = Annual Production (kWh) x Electricity Rate ($/kWh)

Year 1:
  Production  = 2,380 kWh
  Rate        = $0.21457/kWh (GMP Rate 1)
  Savings     = 2,380 x $0.21457
              = $510.68

Note: This represents the energy cost avoided. An off-grid system
eliminates the utility connection entirely (no customer charge),
but also receives no net metering credits for excess production.
For this analysis, we value all produced kWh at the energy rate.

4. 25-Year Cash Flow Projection

Assumptions: 2,380 kWh Year 1 production (includes 1.5% initial degradation), then 0.33%/year degradation. Electricity rate escalates at 3.5%/year from $0.21457/kWh base.

Year	Degradation	kWh	$/kWh	Annual $	Cumulative $
1	100.0%	2,380	$0.2146	$510.68	$510.68
2	99.7%	2,372	$0.2221	$526.81	$1,037.48
3	99.3%	2,364	$0.2299	$543.44	$1,580.93
4	99.0%	2,357	$0.2379	$560.61	$2,141.54
5	98.7%	2,349	$0.2462	$578.32	$2,719.85
6	98.4%	2,341	$0.2548	$596.58	$3,316.43
7	98.0%	2,333	$0.2638	$615.42	$3,931.86
8	97.7%	2,326	$0.2730	$634.86	$4,566.72
9Payback	97.4%	2,318	$0.2825	$654.91	$5,221.64
10	97.1%	2,310	$0.2924	$675.60	$5,897.24
11	96.7%	2,303	$0.3027	$696.94	$6,594.17
12	96.4%	2,295	$0.3133	$718.95	$7,313.12
13	96.1%	2,287	$0.3242	$741.66	$8,054.78
14	95.8%	2,280	$0.3356	$765.08	$8,819.86
15	95.5%	2,272	$0.3473	$789.25	$9,609.11
16	95.2%	2,265	$0.3595	$814.18	$10,423.29
17	94.8%	2,257	$0.3721	$839.89	$11,263.18
18	94.5%	2,250	$0.3851	$866.42	$12,129.60
19	94.2%	2,243	$0.3986	$893.78	$13,023.38
20	93.9%	2,235	$0.4125	$922.01	$13,945.39
21	93.6%	2,228	$0.4269	$951.13	$14,896.53
22	93.3%	2,220	$0.4419	$981.18	$15,877.71
23	93.0%	2,213	$0.4574	$1,012.17	$16,889.87
24	92.7%	2,206	$0.4734	$1,044.13	$17,934.01
25	92.4%	2,198	$0.4899	$1,077.11	$19,011.12

5. Summary Metrics

Total System Cost$5,096.69before incentives

Net Cost$5,096.69after incentives (ITC expired)

Simple Payback8.8years

25-Year Savings$19,011.12cumulative energy cost avoided

25-Year ROI+273%(savings - cost) / cost

LCOE$0.089$/kWh (levelized cost of energy)

Metric Definitions

Simple Payback	Years until cumulative savings equal net system cost. Interpolated within the payback year for fractional precision.
25-Year ROI	`ROI = (Total Savings - Net Cost) / Net Cost x 100%`
LCOE	`LCOE = Net System Cost / Total Lifetime kWh`= $5,096.69 / 57,202 kWh = $0.089/kWhThis is a simplified LCOE (no discount rate, no O&M costs). Real LCOE would be slightly higher with a discount rate applied.

6. Vermont Incentives & Considerations

Incentive	Status	Applicability
Federal ITC (30%)	Expired	Ended Dec 31, 2025 for customer-owned systems
VT Sales Tax Exemption (6%)	Active	Applies to solar equipment up to 500 kW. Already reflected in purchase prices.
VT Property Tax Exemption	Active	Municipality-dependent. If adopted, solar adds no property tax burden.
GMP Net Metering	N/A	Not applicable — this is an off-grid system with no utility connection.
GMP BYOD Battery Program	N/A	Requires grid-tied system. Up to $10,500 for qualifying batteries.
VT Business Energy Tax Credit	N/A	Commercial only (24% of federal ITC, ~7.2% credit).

7. Sensitivity & Uncertainties

Key Uncertainties

Rate escalation: The 3.5%/year assumption is a projection, not a guarantee. Recent Vermont increases have ranged from 1.8%/year (long-term average) to 8.3%/year (2024 VEC). If rates increase faster, payback shortens; slower increases extend it.Production variance: PVWatts uses TMY (Typical Meteorological Year) data. Actual production varies year-to-year. Snow, shading, and equipment downtime can reduce output by 10-20% in a given year. Vermont winters are particularly variable.Equipment lifetime: We assume 25 years matching the panel warranty. Inverters typically last 10-15 years (EG4 warranty: 5 years), so a replacement (~$1,500-$2,000) may be needed. LiFePO4 batteries are rated for 4,000-6,000 cycles but capacity degrades over time.BOS estimate: The $450 balance-of-system cost is an estimate. Actual costs depend on wire run lengths, conduit requirements, and local permit fees. Rutland permit costs should be verified with the town office.Off-grid vs. grid-tied: This analysis values production at the grid energy rate. An off-grid system provides energy independence but also means no utility backup and no net metering credits. If consumption exceeds production, load must be managed or supplemented (generator, grid reconnection).Opportunity cost: The ROI calculation does not account for opportunity cost of the invested capital. At a 4% annual return, $5,096.69 invested elsewhere would grow to ~$13,586.94 over 25 years.

Sensitivity: Rate Escalation Impact on Payback

Rate Escalation	Payback (years)	25-Year Savings	25-Year ROI
2.0%/year	9.3	$15,672.21	+207%
2.5%/year	9.1	$16,699.31	+228%
3.0%/year	9.0	$17,809.88	+249%
3.5%/year (base case)	8.8	$19,011.12	+273%
4.0%/year	8.7	$20,310.84	+299%
5.0%/year	8.4	$23,240.47	+356%

8. Methodology & Sources

Calculation Method

Annual Savings(y) = Production(y) x Rate(y)

Production(y) = Base_kWh x Degradation_Factor(y)
  where Base_kWh = 2,380 kWh (PVWatts, includes yr-1 LID)
  Degradation_Factor(1) = 1.0
  Degradation_Factor(y) = (1 - 0.0033)^(y-1)  for y >= 2

Rate(y) = $0.21457 x (1 + 3.5%)^(y-1)

Simple Payback = year where Cumulative_Savings >= Net_Cost
LCOE = Net_Cost / Sum(Production over 25 years)
ROI = (Total_Savings - Net_Cost) / Net_Cost x 100%

Data Sources

1. GMP Rate 1 Residential — GMP Rate Schedule, Company Designation 1 (effective Oct 1, 2025). $0.21457/kWh energy + $0.626/day customer charge.2. GMP rates overview — greenmountainpower.com/rates3. Federal ITC expiration — IRS Residential Clean Energy Credit and Solar.com ITC Analysis. Section 25D expired Dec 31, 2025 per H.R. 1 (One Big Beautiful Bill).4. Vermont solar incentives — EnergySage Vermont Solar Incentives, Efficiency Vermont PV Rebates5. Vermont rate trends — VEC 2025 Rate Request (VEC actual increases: 1.96%/8.19%/8.33% for 2022-2024); Hardwick Electric Rate History (1.79%/year avg since 2009); EIA Vermont Electricity Profile6. Solar production — NREL PVWatts v8 (1.72 kW, Rutland VT, 26.57° tilt, 180° azimuth). See Power page for detailed methodology.7. Equipment pricing — Signature Solar (EG4 6000XP) $1,549 (Feb 2026); eBay (Cubix 100 2-pack) $1,411; Greentech Renewables Bow NH (panels + racking) $1,686.69.8. Panel degradation — QCells Q.TRON BLK M-G2+ datasheet: 1.5% year 1 (LID), then 0.33%/year linear.

Last updated March 2026. This analysis is for informational purposes only. Actual costs, production, and savings will vary. Rate projections are estimates based on historical trends and published forecasts. Equipment prices reflect point-in-time retail/online pricing.