Standard Offer Program

February 21, 2023

Summary

*According to the VEPP program, the 2022 RFP was the final solicitation year for the Standard Offer program, until further notice from the Vermont Public Utility Commission.

Background

In May 2009, Vermont enacted legislation requiring all Vermont retail electricity providers to purchase electricity generated by eligible renewable energy facilities through the Sustainably Priced Energy Enterprise Development (SPEED) Program via long-term contracts with fixed standard offer rates. This policy, commonly known as a "feed-in tariff", is intended to provide a reasonable return on investment to renewable energy facility developers, thereby spurring deployment of renewable energy. In June 2015, Vermont enacted legislation changing the name of the program from the SPEED program to the Standard Offer Program.

Eligibility

Eligible renewable energy facilities include solar, wind, biomass, landfill gas, farm methane derived from agricultural operations and energy crops, and hydroelectric facilities up to 2.2 megawatts (MW) in capacity that are commissioned on or after September 30, 2009. Standard Offer projects must apply for and be granted a "Certificate of Public Good." Projects 150 kW and less may fill out a simplified application. Eligible wood biomass resources may only receive the standard offer if the plant's system efficiency is 50% or greater.

Procurement

In 2013, the Vermont Public Service Board (PSB) established a new market-based pricing mechanism per S.B. 214 (Act 170). Beginning in 2013, contracts are awarded though a Request for Proposals (RFP) process, with RFPs released annually on April 1st. The PSB sets avoided cost rates to be used as annual per-kWh cost caps for contracts. Contracts are selected competitively based on the proposed $/kWh structure. The full avoided cost schedule is available in the RFP. 

Contract Terms

The long-term contracts are 10 to 25 years for solar and 10 to 20 years for all other technologies. As a condition of the standard offer, the renewable energy credits (RECs) generated are transferred to the retail electric provider that purchases the power from the renewable energy facility, except in the case of a facility using methane from agricultural operations. In that case, the plant owner retains ownership of the RECs and may sell them if desired. Retail electric providers and owners of renewable energy facilities may enter into voluntary contracts with different terms than the standard offer contract terms at their discretion. 

The PSB issues annual reports on the Standard Offer Program to the legislature every January. 

Program Capacity

Legislation enacted in May 2012 (S.B. 214 / Act 170) increased the Standard Offer Program to 127.5 MW. Starting April 1, 2013, there are annual increases to the program cap, until the 127.50 MW cumulative capacity is reached. From 2016-2018, annual program capacity will be 7.5 MW, and beginning in 2019, annual program capacity will be 10 MW. The schedule for annual increases is as follows, and may be adjusted to account for greenhouse gas reduction credits, as provided for in the law:

April 1, 2013: 55 MW

April 1, 2014: 60 MW

April 1, 2015: 65 MW

April 1, 2016: 72.5 MW

April 1, 2017: 80 MW

April 1, 2018: 87.5 MW

April 1, 2019: 97.5 MW

April 1, 2020: 107.5 MW

April 1, 2021: 117.5 MW

April 1, 2022: 127.5 MW

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Vermont
Incentive Type: Feed-in Tariff
Web Site: https://vermontstandardoffer.com/
Administrator: Vermont Electric Power Producers (VEPP) Inc.
Start Date:
Eligible Renewable/Other Technologies:
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Hydroelectric
  • Municipal Solid Waste
  • Landfill Gas
  • Hydroelectric (Small)
  • Anaerobic Digestion
Incentive Amount: Determined through RFP process
Maximum Incentive: 2022 Price Caps by Technology:
Biomass: $0.125/kWh (levelized)
Landfill Gas: $0.09/kWh (levelized)
Wind over 100 kW: $0.116/kWh (levelized)
Wind 100 kW or less: $0.258/kWh (levelized)
New Hydroelectric: $0.13/kWh
Food Waste Anaerobic Digestion: $0.208/kWh
Solar: $0.0982/kWh
Eligible System Size: Maximum system capacity is 2.2 MW; overall cap of the standard offer program is 127.5 MW
Duration: Solar: 25 years
Landfill Gas: 15 years
All other technologies: 20 years
Ownership of Renewable Energy Credits: RECs are transferred to the utility, except in the case of farm methane generators (who maintain RECs)

Authorities

Name: 30 V.S.A. § 8001 et seq.
Date Enacted: 06/15/2004
Name: CVR 30 000 054. 4.300
Date Enacted: 09/10/2006
Name: Order to Establish Prices and Programmatic Changes
Date Enacted: 03/01/2013

Contact

Name: Carolyn Alderman
Organization: VEPP Inc.
Address: P.O. Box 1938
Manchester Center VT 05255
Phone: (802) 362-0748
Email: calderman@veppi.org

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.