Vermont Lawmakers Eye New Incentives For Electric Vehicle Purchases

Dec 20, 2017

Financial incentives for people who buy electric vehicles will be among several clean energy proposals up for debate in Montpelier next year.

The cars and trucks traveling Vermont’s roads are far and away the biggest contributors to greenhouse gas emissions in the state. And climate-minded policy makers are eying the transportation sector as they look to reduce Vermont’s carbon footprint.

Addison County Sen. Chris Bray says one way to accomplish that goal is to replace gas-fueled vehicles with electric cars. And the Democratic chairman of the Senate Committee on Natural Resources will be offering up a proposal next year that he says could hasten the transition, by waiving the purchase and use tax on electric vehicles.

“By taking that purchase and use tax off, it makes it a more affordable purchase,” Bray says.

It’s a pretty significant financial sweetener for people thinking about purchasing an electric car. Bray says the break would apply to the first $30,000 of the purchase price, and save buyers up to $1,800 in purchase and use taxes.  

Bray says some states have used government-funded cash rebates to spur electric vehicle purchases. He says budget constraints in Montpelier will likely dissuade lawmakers from making that kind of financial outlay.

“But we could I think forego revenues on that side in order to help people make the transition,” Bray says.

Bray's bill would also assess a new annual fee — about $100 — on electric vehicle owners. Bray says when motorists drive cars that don't use gasoline, they aren't paying the gas taxes that fund the state's transportation fund.  

In order to prevent erosion of transportation revenues, Bray says, the state needs mechanisms in place to ensure that owners of electric vehicles are paying into the fund.

It won’t be the only clean energy bill up for debate in Bray’s committee next year. Another piece of legislation would considerably expand the state’s net metering program.

That program has been around for nearly two decades, and it’s made things such as rooftop solar panels, for instance, financially viable for thousands of Vermont homeowners. Bray though says the existing net metering program has left some people out.

“They don’t have a roof that’s pointing the right way, or they have trees that are shading, or they’re a tenant in a building and they’re in a building and their landlord isn’t putting up any clean energy for them,” Bray says.

Bray says he’ll be proposing a community-scale net metering program, where numerous people can buy into one, larger renewable energy project. He says the new net metering class would also let large businesses and other institutions to make the conversion to renewable energy.

“Municipalities would like to have more clean energy, school systems, hospitals, nonprofits, as well as folks on the commercial side of things,” Bray says.

Bray’s bill would allow for up to 250 megawatts of new generation. He says the bill would try to drive renewable energy generation to where it’s needed most, by including “adjustors” based on location.

Some Vermont utilities have raised concerns about the impact of net metering on overall electricity rates - the program functions by requiring utilities to pay a premium for energy produced by net-metering projects.

Bray says his proposal would mitigate that impact, by tying the price that utilities pay for electricity from the new net-metering category to the wholesale cost of energy on the open market.