Vermont Laws and Incentives

Listed below are the summaries of all current Vermont laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Plug-In Electric Vehicle (PEV) Incentive

The Vermont Agency of Transportation provides financial incentives to low- and moderate-income residents for the purchase or lease of a new PEV with a base manufacturer’s suggested retail price of $40,000 or less, on a first-come, first-served basis. Incentives are offered in the following amounts:

Tax Filing Status

Adjusted Gross Income (AGI) Limits for Enhanced and Standard Incentives

State Incentive Amount

Plug-in Hybrid Electric Vehicle

All-Electric Vehicle

Individual filing as single or head of household; or Married filing separately

$50,000 or less

$3,000

$4,000

$50,001 up to $100,000

$1,500

$2,500

Married filing jointly; or Individual filing as qualifying widower

$75,000 or less

$3,000

$4,000

$75,001 up to $125,000

$1,500

$2,500

Incentives are limited to one per individual or married couple. Additional terms and conditions apply. For more information, including application and eligibility requirements, visit the Drive Electric Vermont website.

(Reference House Bill 529, 2019, House Bill 969, 2020, and House Bill 433, 2021)

Fuel-Efficient Vehicle and Emission Reduction Incentives

The Vermont Agency of Transportation (VTrans) administers the High Fuel Efficiency Used-Vehicle Program,MileageSmart, which provides incentives of up to $5,000 to replace eligible vehicles with a used vehicle that has a U.S. Environmental Protection Agency (EPA) combined city/highway fuel economy of at least 40 miles per gallon (mpg).

VTrans also offers vouchers of up to $2,500 for the repair of vehicles that failed the on-board diagnostic (OBD) systems inspection. Eligible vehicles for replacement include those that have failed the OBD systems inspection or those that are more than 15 years old and have an EPA combined city/highway fuel economy of less than 25 mpg. Eligible vehicles for a repair voucher are those that have failed the OBD systems inspection, require repairs that are not under warranty, and will be able to pass the inspection once the repairs are made. For more information on the emissions repair program, visit the VTrans Statewide Vehicle Incentives Programs website. The emissions repair program must be operational by January 1, 2023.

(Reference House Bill 529, 2019 and House Bill 433, 2021)

Heavy-Duty Vehicle Emissions Reduction Grants

Through the Vermont Diesel Emissions Reduction Grants Program, the Vermont Department of Environmental Conservation (DEC) provides funding to local, state and regional agencies or departments, businesses, institutions, and nonprofit organizations for projects focused on reducing emissions from diesel engines and vehicles. Qualifying heavy-duty vehicles include buses and Class 5-8 trucks. Projects eligible for funding are as follows:

  • Verified emission control technologies;
  • Verified idle reduction technologies;
  • Verified aerodynamic technologies and low rolling resistance tires;
  • Certified engine replacements;
  • Alternative fuel conversions; and
  • Certified vehicle or equipment replacements.
All technologies and engines must be certified by the U.S. Environmental Protection Agency. Alternative fuels include, but are not limited to, natural gas, propane, and electricity. Cost share requirements vary by project. For more information, including application details, see the DEC Vermont Diesel Emissions Reduction Grants website.

Alternative Fueling Infrastructure Incentive

The Vermont State Infrastructure Bank (SIB) offers loan assistance to municipalities, regional development corporations, political subdivisions of the state, and private companies working for the state to finance public electric vehicle charging and natural gas fueling stations. 1% fixed loans up to $100,000 are available to municipalities, non-profits, and private sector borrowers. Other terms and conditions may apply. See the Vermont Economic Development Authority's SIB website for more information, including how to apply.

Utility/Private Incentives

Plug-In Electric Vehicle (PEV) Incentives - Burlington Electric Department (BED)

BED provides low- or no-interest loans for the purchase of a new PEV. Eligible customers can also apply for a rebate of $1,800 towards the purchase of a new all-electric vehicle (EV) or $1,500 towards the purchase of a plug-in hybrid electric vehicle (PHEV). An additional $600 is available for moderate income customers buying an EV or $300 for a PHEV. Vehicles must have a manufacturer's suggested retail price that is less than or equal to $50,000. Additional terms and conditions apply. For more information, including income eligibility, see the BED Electric Vehicles website.

Plug-In Electric Vehicle (PEV) Rebates - Green Mountain Power (GMP)

GMP provides residential and business customers rebates of $1,500 for the purchase of a new all-electric vehicle, $1,000 for the purchase of a new plug-in hybrid electric vehicle, $750 for the purchase of used PEVs, and $500 for the purchase of an electric motorcycle. Customers with qualifying low and moderate household incomes are eligible for an additional $1,000 rebate. PEVs must have a manufacturer's suggested retail price that is less than or equal to $60,000. For more information, see the GMP Electric Vehicles website.

Plug-in Electric Vehicle (PEV) Rebate - Stowe Electric

Stowe Electric offers customers rebates for the purchase or lease of PEVs. New plug-in hybrid electric vehicles (PHEVs) are eligible for a $750 rebate, new all-electric vehicles (EVs) are eligible for a $1,000 rebate, and income-qualifying customers are eligible for an additional $250 rebate for either vehicle. Stowe Electric also offers a $400 rebate for the purchase of used EVs and a $300 rebate for the purchase of used PHEVs. For more information, including how to apply, see the Stowe Electric Rebate Programs website.

Plug-In Electric Vehicle Credit - Vermont Electric Co-op (VEC)

VEC offers a $250 bill credit to members who purchase a new or used plug-in hybrid electric vehicle (PHEV) and a $500 bill credit to members who purchase a new or used all-electric vehicle (EV). Members who lease a PHEV are eligible for an annual bill credit of $50 for each year of the lease, and members who lease an EV are eligible for an annual bill credit of $100 for each year of the lease. For more information, including how to apply, see the VEC Energy Transformation Program website.

Plug-in Electric Vehicle and Off-Road Equipment Rebates - VPPSA

Vermont Public Power Supply Authority (VPPSA) member customers are eligible for rebates of up to $1,000 on the purchase of a new all-electric vehicle (EV), and up to $500 on the purchase of a new plug-in hybrid electric vehicle (PHEV). VPPSA also offers rebates of $500 for the purchase of a pre-owned EV and $250 for the purchase of a pre-owned PHEV. Low-income customers may receive an additional $400 rebate for a new EV or PHEV.

Additional rebates are available for the purchase of an electric forklift, residential or commercial lawnmower, and other yard care equipment.

For more information visit the VPPSA Electric Vehicle Rebate website.

Plug-In Electric Vehicle (PEV) Charging Rate Reduction and EVSE Rebate - BED

Burlington Electric Department (BED) offers a per kilowatt-hour discount for residential customers to charge PEVs during off-peak times. To qualify, customers must install a WiFi enabled electric vehicle supply equipment (EVSE).

BED also offers a rebate of $400 for the purchase and installation of a qualifying Wifi enabled EVSE for customers that have enrolled in BED’s Residential EV Rate. Eligible applicants must have purchased EVSE within 60 days of the acquisition of the EV.

For more information, see the BED EV Rate website.

Residential Electric Vehicle Supply Equipment (EVSE) Incentive - Green Mountain Power (GMP)

GMP residential customers are eligible for a free Level 2 EVSE when they purchase a new or used plug-in electric vehicle. For more information about these incentives, see the GMP In-Home Level 2 EV Charger website.

Commercial Electric Vehicle Supply Equipment (EVSE) Incentive - Green Mountain Power (GMP)

GMP offers business customers a $750 incentive for the purchase of a Level 2 EVSE. For more information about these incentives, see the GMP Electric Vehicles website.

Electric Vehicle Supply Equipment (EVSE) Credits - Vermont Electric Co-op (VEC)

VEC offers a bill credit of $500 per connector, up to $2,000, to VEC member businesses and public entities that install Level 2 or direct current (DC) fast EVSE after July 2, 2017. To qualify, the EVSE must be available for public use.

VEC also offers residential customers a $250 bill credit for the purchase of a Level 2 EVSE. Members with eligible chargers may receive an additional $50 incentive for participating. For more information, including additional restrictions and how to apply, see the VEC Energy Transformation Program website.

Electric Vehicle Supply Equipment (EVSE) Incentive - Vermont Public Power Supply Authority (VPPSA)

VPPSA offers member customers a $500 rebate for the purchase of a Level 2 EVSE. To qualify, the EVSE must be installed for workplace or public use. For more information about these incentives, see the VPPSA Electric Vehicle Charging Station website.

Laws and Regulations

Voluntary Vehicle Retirement and Replacement Grant

The Vermont Agency of Transportation, in consultation with other state agencies, will administer the Replace Your Ride Program (Program) to reduce greenhouse gas (GHG) emissions and benefit low-income residents. The Program will provide up to $3,000 to qualified individuals, determined by income limits, for the retirement and replacement of internal combustion engine vehicles. Incentives will be offered on a first-come, first-served basis and limited to one per individual. For more information, see the Replace Your Ride - Network Action Team website. (Reference House Bill 433, 2021)

Electric Vehicle Supply Equipment (EVSE) Multi-Unit Dwelling (MUD) Pilot Program

The Vermont Agency of Transportation must establish and administer, through a memorandum of understanding with the Department of Housing and Community Development (DHCD), a pilot program to support the installation of EVSE at MUDs and affordable housing units. The DHCD must consult with other state agencies regarding the design, award of funding, and administration of this pilot program. The DHCD must submit a written report on the outcomes of the pilot program to the legislature by January 15, 2022. Additional terms and conditions apply. (Reference House Bill 433, 2021)

Electric Vehicle Supply Equipment (EVSE) Deployment Goal

To the extent possible, Vermont must adopt the goal to have at least one direct current (DC) fast EVSE charging port available to the public within five miles of every interstate exit within the state; and 50 miles of another DC fast EVSE charging port available to the public along a state highway. The Vermont Agency of Transportation must submit an updated Vermont map showing the locations of all public DC fast EVSE to the legislature by January 15 each year until this goal is met. Additional terms and conditions apply. (Reference House Bill 433, 2021)

Utility Company Plug-In Electric Vehicle (PEV) Rates

Utility companies must offer PEV rates for public and private electric vehicle supply equipment by June 30, 2024. The PEV rates must be approved by the Public Utility Commission (PUC). The PUC must submit a written report to the legislature on the progress towards this goal by January 15 of each year through 2025. (Reference House Bill 433, 2021)

Plug-In Electric Vehicle (PEV) Definition

A PEV is defined as a vehicle that can be powered by an electric motor that draws electricity from a battery and is capable of being charged from an external source. A PEV includes both a vehicle that can only be powered by an electric motor that draws electricity from a battery (all-electric vehicle) and a vehicle that can be powered by an electric motor that draws electricity from a battery and by an internal combustion engine (plug-in hybrid electric vehicle). (Reference House Bill 433, 2021)

Public Utility Definition

An entity that supplies electricity to the public exclusively to charge plug-in electric vehicles is not defined as a public utility and may charge for this electricity by the kilowatt-hour. (Reference Vermont Statutes Title 30, Chapter 5, Section 203)

Electric Vehicle Supply Equipment (EVSE) Fee Authorization

Any Vermont agency or department that owns or controls EVSE may establish and set user fees. The agency or department may establish fees that are less than or equal to the cost of charging or the retail rate charged for the use of EVSE available to the public. Fees collected must be deposited into the same fund or account from which the EVSE expenses originated. This authorization expires on July 1, 2022. (Reference Vermont Statutes Title 32, Chapter 7, Section 604)

Fuel-Efficient Vehicle Incentive Analysis

The Vermont Agency of Transportation (VTrans) must complete a study and submit a to the legislature determining whether to implement a rebate program for individuals to purchase or lease fuel-efficient vehicles that is funded by fees collected from individuals that purchase or lease inefficient vehicles. The report must also assess how this incentive program could function with other Vermont incentive programs to reach the plug-in electric vehicle goal in the Vermont Comprehensive Energy Plan. VTrans published a report on October 15, 2019. (Reference House Bill 529, 2019)

Public Transportation Electrification Plan

The Vermont Agency of Transportation (VTrans), in consultation with public transit providers, must prepare a long-range plan that outlines the costs, timeline, training, maintenance, and operational actions required to move to a fully electrified public transportation fleet. VTrans must file the long-range plan with the legislature by January 31, 2022. (Reference House Bill 433, 2021)

Zero Emission Vehicle (ZEV) Sales Requirements and Low Emission Vehicle Standards

Vermont has adopted the California motor vehicle emissions standards and compliance requirements specified in Title 13 of the California Code of Regulations. These regulations apply to new vehicles with a gross vehicle weight rating of up to 14,000 pounds. Manufacturers must meet the greenhouse gas emissions standard and the ZEV production and sales requirements. (Reference Vermont Air Pollution Control Regulations 5-1101 through 5-1109)

Hybrid Electric Vehicle (HEV) and Plug-In Electric Vehicle (PEV) Acquisition Requirements

The Vermont Department of Buildings and General Services (Department) must, to the extent possible, purchase or lease HEVs or PEVs for state use. At least 50% of the vehicles purchased or leased annually must be HEVs or PEVs. Beginning July 1, 2021, at least 75% of the vehicles purchased or leased annually must be HEVs or PEVs. The Department must acquire the lowest-cost make and model that meets the State’s needs. (Reference Vermont Statutes Title 29, Chapter 49, Section 903)

Zero Emission Vehicle (ZEV) Deployment Support

Vermont joined California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, and Rhode Island in signing a memorandum of understanding (MOU) to support the deployment of ZEVs through involvement in a ZEV Program Implementation Task Force (Task Force). In May 2014, the Task Force published a ZEV Action Plan (Plan) identifying 11 priority actions to accomplish the goals of the MOU, including deploying at least 3.3 million ZEVs and adequate fueling infrastructure within the signatory states by 2025. The Plan also includes a research agenda to inform future actions. On an annual basis, each state must report on the number of registered ZEVs, the number of public electric vehicle supply equipment (EVSE) and hydrogen fueling stations, and available information regarding workplace fueling for ZEVs.

In June 2018, the Task Force published a new ZEV Action Plan for 2018-2021. Building on the 2014 Action Plan, the 2018 Action Plan makes recommendations for states and other key partners in five priority areas:

  • Raising consumer awareness and interest in electric vehicle technology;
  • Building out a reliable and convenient residential, workplace and public charging/fueling infrastructure network;
  • Continuing and improving access to consumer purchase and non-financial incentives;
  • Expanding public and private sector fleet adoption; and
  • Supporting dealership efforts to increase ZEV sales.

For more information, see the ZEVs website.

Regional Transportation and Climate Initiative (TCI)

Delaware, District of Columbia (D.C.), Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia signed a Declaration of Intent to create the TCI, a regional initiative to improve transportation, develop a clean energy economy, and reduce carbon emissions and air pollutants from the transportation sector. The signatory states and D.C. agree to explore and develop policies and programs that result in greater energy efficiency of regional transportation systems and reduce emissions. Additionally, states support the deployment of clean vehicles and fueling infrastructure, such as electric vehicle supply equipment, to maximize the economic opportunities and emissions reductions. For more information, see the TCI website.

Medium- and Heavy-Duty Zero Emission Vehicle (ZEV) Deployment Support

California, Colorado, Connecticut, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington (signatory states) signed a memorandum of understanding (MOU) to support the deployment of medium- and heavy-duty ZEVs through involvement in a Multi-State ZEV Task Force (Task Force).

The Task Force will develop a multi-state action plan to support electrification of medium- and heavy-duty vehicles. The Task Force will consider actions to accomplish the goals of the MOU, including limiting all new medium- and heavy-duty vehicles sales in the signatory states to ZEVs by 2050. The signatory states will also seek to accelerate the deployment of medium- and heavy-duty ZEVs to benefit disadvantaged communities and explore opportunities to coordinate and partner with key stakeholders.

For more information, see the Medium- and Heavy-Duty ZEVs: Action Plan Development Process website.

Automated Vehicle (AV) Testing and Operation Requirements

AVs may be operated on public highways for testing purposes if there is a licensed vehicle operator seated in the driver's seat monitoring the safe operation of the AV and capable of taking immediate manual control of the vehicle in the event that the automated driving system fails. Before an AV may be tested on public highways, the Vermont Traffic Committee (Committee) must approve a permit application that defines the scope of the test and demonstrates the ability of the AV tester to comply with testing requirements. An approved AV tester is required to submit a report to the Committee annually, including information about AV safety, traffic operations, interaction with roadway infrastructure, and any public comments, until testing is complete.

The Vermont Agency of Transportation published the Vermont AV Testing Permit guide that includes a list of municipalities that have preapproved the testing of AVs in their jurisdictions. An AV is defined as any vehicle that is equipped with a technology that has the capability to operate the vehicle without the direct control of the driver.

(Reference Vermont Statutes Title 23, Chapter 41, Sections 4201-4203)

Natural Gas Tax

Natural gas used to propel a motor vehicle is not subject to the state gasoline tax, but is subject to state sales and use tax. (Reference Vermont Statutes Title 32, Chapter 233, Section 9741, and Title 23, Chapter 28, Section 3101)

Plug-In Electric Vehicle (PEV) Analysis

The Vermont Public Utility Commission (Commission) completed a report that evaluated PEVs and PEV charging in the state. The Commission was to provide public notice, opportunity for submission of written comments, and one or more workshops on PEVs before the evaluation is conducted. In its report, the Commission was required to include analysis and recommendations on the following topics regarding electric vehicle supply equipment (EVSE) owned by electric utilities:

  • Removal of barriers to EVSE installation, including strategies to reduce operating costs for EVSE users;
  • Strategies to manage the impact of PEV charging on the electric transmission and distribution system;
  • Strategies to facilitate the services provided by PEVs to the electric transmission and distribution system;
  • Benefits and costs to the electric system of PEV charging, electric utility planning for PEV charging, and rate design for PEV charging; and
  • The role of electric utilities with respect to the deployment and operation of EVSE.
For EVSE owned or operated by non-utility entities, the Commission was also to report on its analysis and recommendations for:

  • How and when these EVSE stations will obtain electricity;
  • Safety standards for EVSE;
  • The role of the Commission and other relevant state agencies in managing these EVSE;
  • Regulations, if any, on pricing structures for EVSE, including transparency to the consumer of any rates or prices; and
  • Billing and complaint procedures for EVSE.
The Commission also was to consider:

  • Options for PEV drivers to contribute toward the cost of maintaining the State's transportation infrastructure;
  • The accuracy of electric metering and submetering technology for PEV charging;
  • Strategies to encourage PEV adoption and achieve the State's Comprehensive Energy Plan and greenhouse gas reduction goals; and
  • Any other topics that the Commission believes are relevant to fair, cost-effective, and accessible PEV charging.
The Commission published a report with its findings on June 27, 2019 and a report with supplemental findings on December 13, 2019.

Idle Reduction Requirement

A driver may not idle a motor vehicle for more than five minutes in a 60-minute period. This limit does not apply if the vehicle is operating an auxiliary power unit, generator set, or other mobile idle reduction technology. Additional exemptions apply. Additionally, all driver education courses must include instruction on the adverse environmental, health, economic, and other impacts of unnecessary idling and on the law governing idling of motor vehicles. (Reference Vermont Statutes Title 23, Chapter 13, Section 1110 and Title 16, Chapter 23, Section 1045)

School Bus Idle Reduction Requirement

School bus operators must turn off the bus engine immediately after arriving at a student loading and unloading area located on school grounds and may not start the engine until the bus is ready to leave the school grounds. In addition, operators may not idle the engine for more than five minutes in a 60-minute period on school grounds. Exceptions include periods when the engine is necessary to operate special equipment for disabled persons; to address safety, traffic, health, or emergency concerns; or to service the vehicle. (Reference Vermont State Board of Education Rules and Practices 6001-6005, and Vermont Statutes Title 23, Chapter 13, Section 1282)

Neighborhood Electric Vehicle (NEV) Access to Roadways

An NEV is defined as an electric vehicle that is designed to operate at speeds of up to 25 miles per hour (mph); carries up to four people; has at least four wheels and a gross vehicle weight rating of less than 3,000 pounds; and conforms to the minimum safety equipment requirements as adopted in Title 49 of the U.S. Code of Federal Regulations, section 571.500. An NEV may only be used on roads with a posted speed limit of up to 35 mph. The operator of an NEV may cross a highway that has a speed limit of up to 50 mph if the crossing begins and ends on a road authorized for use by NEVs and the intersection has a traffic control signal. The State Traffic Committee or the legislative body of a municipality for town highways may prohibit NEVs from crossing specific intersections in their jurisdiction if the decision is made in the interest of public safety. (Reference Vermont Statutes Title 23, Chapter 1, Section 4, and Title 23, Chapter 13, Sections 1007a and 1043)