Vermont’s state name comes from the French name for the Green Mountains, which rise between the Connecticut River on the New Hampshire border and the Hudson River Valley on the New York border and run the length of Vermont, from Canada south to the Berkshire Hills of Massachusetts. Vermont is the second smallest state by population, after Wyoming, and the fifth smallest state by area. Nearly one-third of the state’s residents live in the Burlington metropolitan region, which is in the northwest around Lake Champlain. Most other Vermont residents live in small towns and on farms.

Three-fourths of Vermont is forested, providing renewable wood products for electricity and heating.

Three-fourths of the state is forested, supporting both the traditional wood products industry and biomass generation. One in six Vermont households uses wood products, such as wood pellets, as their primary heating source. Some areas have reforested as traditional farming has declined. Vermont’s industrial sector is led by real estate, health care, electronics manufacturing, and tourism. The state has mild summers and snowy winters. The Green Mountains draw visitors year-round, and about one in seven homes is occupied only seasonally.

Energy use is dominated by transportation and by heating requirements in the frigid winters. As fuel costs to meet those needs rose, Vermont established long-term policies designed to increase both residential and business energy efficiency, reduce energy use, and shift energy consumption to renewable sources. The state’s goals for 2050 include obtaining 90% of all energy from renewable sources and reducing energy use by one-third. Vermont’s total energy consumption is already the lowest of any state in the nation, and it is among the lowest one-fifth of states in energy consumed per capita.

Renewable Energy

Quick Facts

  • With the permanent closure of the Vermont Yankee Nuclear Plant at the end of 2014, Vermont is producing less than 40% of the electricity it consumes and depends on power from the New England grid and Canada.
  • In 2015, nearly all of Vermont’s in-state net electricity generation was produced by renewable energy, including hydroelectric, biomass, wind, and solar resources.
  • Vermont has enacted the nation’s first integrated renewable energy standard (RES), which makes utilities responsible both for supplying renewable electricity and for supporting reductions in customers’ fossil fuel use.
  • Vermont has set energy goals of obtaining 67% of electricity, 30% of building energy consumption, and 10% of transportation energy from renewable sources by 2025.
  • One in six Vermont households uses wood products, such as wood pellets, as their primary heating source.

Nearly one-fifth of all energy consumed in Vermont comes from renewable sources, and the state is expanding the use of renewable energy for both heating and electricity. More than one-third of school children attend facilities heated by wood products, such as wood pellets, or other biomass. Nearly all the electricity generated in Vermont and about 45% of the electricity consumed in the state now come from renewable resources. The largest share of renewable electricity consumed comes from Canadian hydroelectricity generators. Vermont has several dozen small hydroelectric dams, which typically produce about one-tenth of state consumption. Several utility-scale generators using wood and wood waste products produce more than 5% of electricity consumed. The state also obtains renewable electricity from solar photovoltaic (PV), wind, landfill methane, and methane digester facilities.

Vermont’s integrated renewable energy standard requires electric utilities to help customers reduce fossil fuel use.

Vermont has been the only New England state without a mandatory renewable portfolio standard, but, in 2015, the state replaced its package of economic incentives for renewables with the nation’s first integrated renewable energy standard (RES). The Vermont RES makes electric utilities responsible not only for supplying renewably sourced power but also for helping consumers reduce their total fossil fuel use. The RES requires that 55% of electricity sold in Vermont in 2017 be obtained from renewables, rising 4% every 3 years to reach 75% in 2032. Of that power, by 2032, 10% must come from new, in-state, renewable generation facilities smaller than 5 megawatts. The RES also created a separate energy transformation requirement, equaling another 12% of sales in 2032, which may be met with additional distributed generation or projects that reduce customers’ fossil fuel use. Those projects may include home weatherization and heating efficiency measures as well as infrastructure to support adoption of EVs. Vermont’s state goals for 2025 are to obtain 67% of electricity, 30% of building energy consumption, and 10% of transportation energy from renewable sources.

Vermont was the first state in the nation to institute a feed-in tariff for small renewable energy facilities. The feed-in tariff, called the Standard Offer, guarantees owners of small renewable facilities a specific price for their power for up to 25 years. Projects bid for contracts under the tariff. The state also allows net metering of small, customer-sited facilities for up to 15% of each utility’s peak load. The programs have encouraged growth primarily of solar generation, but also small hydroelectricity, wind, and agricultural digester facilities. Both programs are at or near capacity across the state.

In 2015, solar power produced 5.5% of Vermont’s net electricity generation and about 2% of all electricity sold in the state. Nearly half of that solar generation came from distributed facilities smaller than 1 megawatt. As of late 2015, Vermont had about 95 megawatts of distributed solar capacity installed at nearly 5,000 sites and another 100 megawatts in development. Commercial systems of more than 200 kilowatts’ capacity are increasing. Vermont’s potential commercial wind resources are concentrated on its mountain ridges. Four utility-scale wind farms contributed 15% of Vermont’s net electricity generation and 6% of the electricity consumed in the state in 2015. The state also hosts a number of small-scale wind facilities. The state has a Clean Energy Development Fund, created initially with tax payments from the Vermont Yankee Nuclear Plant, to assist small-scale and community projects using renewable technologies. The fund is focusing on promoting high-efficiency combustion of wood fuels from sustainable forest ecosystems.


Vermont is the only New England state that has chosen not to restructure its electricity system.

Vermont electric utilities own little generating capacity and rely on contracts with independent generators and the ISO-NE grid for power from neighboring states and Canada. With the permanent shutdown of the Vermont Yankee Nuclear Plant at the end of 2014, Vermont lost 55% of its electricity generating capacity and the source of more than 70% of its net generation in recent years. As a result, in 2015, in-state generation provided less than two-fifths of the electricity consumed in Vermont. About three-fifths of in-state generation came from hydroelectric power, with the remainder supplied by biomass, wind, and solar energy. Vermont has little in-state generation from natural gas, but more of the state’s electricity is coming from the New England grid, which is increasingly reliant on natural gas.

Vermont is the only New England state that has chosen not to restructure its electricity system. The state has 1 investor-owned distribution utility, 14 municipal utilities, and 2 cooperative utilities. The investor-owned utility, which serves about three-fourths of all customers, is a subsidiary of Canada’s Gaz Métro, which also owns Vermont’s sole natural gas utility. In 1956, Vermont’s electric utilities pooled their transmission systems to connect with hydroelectric generators in New York and Canada, so all wholesale transmission in the state is operated by a single entity, Vermont Electric Power Company.

Vermont’s per capita electricity consumption is among the lower one-fifth of states. Demand for air conditioning is minimal during the mild summers, and fewer than 1 in 20 households use electricity as their primary home heating source. In 1999, Vermont created an Energy Efficiency Utility to reduce power demand peaks and optimize electricity use for consumers statewide, the first such entity in the nation. The efficiency utility is funded by a fee on electric bills and regulated by the state. Vermont has been reducing electricity consumption annually through its efficiency programs. The state is a member of the Regional Greenhouse Gas Initiative (RGGI), established to reduce greenhouse gas emissions from power generation, and proceeds from the sale of RGGI carbon allowances help fund efficiency programs. With its small net electricity generation, nearly all of it from renewable sources, Vermont has the lowest carbon dioxide emissions of any state in the nation.

Natural Gas

There is no natural gas production within Vermont, and there are no known natural gas reserves. In 2012, the state legislature banned hydraulic fracturing, a technology used for natural gas production, on environmental grounds. The state’s single natural gas utility receives all of its natural gas by a small-capacity pipeline from Canada. The utility retails natural gas in the Burlington, Vermont, area. That region is the only area of the state with access to natural gas. Expanding access to natural gas in the rest of the state has been explored when the cost of petroleum products has risen. Limited access makes Vermont the second-smallest natural gas consumer, and the second-smallest natural gas consumer per capita, among the states. Only about one in six households uses natural gas as the primary home heating fuel.

Source: U.S. Energy Information Administration June 2016)

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