Rhode Island Solar Incentives (2024) - MarketWatch

Rhode Island Solar Incentives (2024)

Get a quote on a solar installation from the top providers in your area and learn what incentives in Rhode Island can help you save money

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Get a quote on a solar installation from the top providers in your area and learn what incentives in Rhode Island can help you save money

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Rhode Island ranks 32nd in the country for solar power, with enough solar installed to power 120,280 homes. See how high electricity bills and attractive solar incentives in Rhode Island allow homeowners to save money by switching to solar energy.

Rhode Island’s incentive program is primarily driven by its strong Renewable Energy Standard(RES) goals. Rhode Island also recently passed a bill that aims to power the state entirely with renewable energy by 2033. Keep reading for an in-depth look at the solar incentives available in Rhode Island and how much you can save on solar panels.

Rhode Island offers an attractive set of state incentives. Homeowners who buy solar panels can benefit from a variety of programs, from cash rebates and tax credits to net metering and tax exemptions.

Incentive value: Up to $5,000 for homeowners and micro businesses or up to $75,000 for commercial projects.

Frequency: One-time rebate

The Renewable Energy Fund(REF) aims to promote clean energy sources with a one-time rebate for installing solar. Funded by the state commerce department, the REF is the most important state-based incentive in Rhode Island.

Your installer will submit an application before beginning your solar project. The program will inspect the project upon completion and release the incentive amount to the installer. Your installer will then offer you an upfront discount equivalent to the grant amount.

The commerce department recently added energy storage to the incentive under its “Energy Storage Adder” pilot program.

Incentive Value: 26.15–27.75 cents per kilowatt-hour (kWh)

Frequency: A periodic, performance-based incentive (PBI)

Rhode Island Energy’s Renewable Energy Growth (REG) program is designed to support the state’s distributed electricity generation projects. The program enables customers to sell solar generation under long-term tariffs at fixed prices. The small-scale REG program (for PV systems up to 25 kW) offers homeowners and small businesses a fixed tariff of 26.15 to 27.75 cents per kilowatt-hour of energy generated.

The program opens each year on April 1 and is available on a first-come, first-serve basis until fully subscribed. You must submit applications for the REG program through Rhode Island Energy’s website. You cannot combine the REG program with the REF program, but you can combine either program with the federal solar tax credit.

Incentive value: 7% of your system value

Frequency: One-time tax exemption

Rhode Islanders enjoy a 100% sales tax exemption on purchases related to solar panel systems or other renewable energy projects. Considering the average system costs $17,220 in Rhode Island, which has a 7% sales tax rate, you could save around $1,205. The incentive is applied automatically when you purchase a new solar energy system.

Incentive value: Savings vary

Frequency: One-time tax exemption

Rhode Island’s solar property tax exemption means you don’t have to pay additional property taxes even if the value of your property increases after installing a solar array.

Incentive value: Up to $20,000

Frequency: One-time

Rhode Island’s Department of Energy Management partners with the Office of Energy Resources (OER) to offer the RI Agricultural Energy grant program. The incentive is meant to help local farmers “green” their operations. The solar grants offer up to $20,000 for eligible renewable energy systems, including solar photovoltaic (PV) systems and solar thermal projects.

To apply for the incentive, installers must fill out an application form on behalf of the customer.

Incentive value: No direct savings

Frequency: One-time financing opportunity

Rhode Island offers a commercial PACE financing program to businesses willing to install solar power or other, eligible energy efficiency upgrades. The program offers solar loans that businesses can repay through installments added to their property taxes.

Interested solar customers can apply for a PACE loan through one of Rhode Island’s approved capital providers. Contact the program for more information.

Net metering allows you to send the excess energy your solar panels generate to the grid in exchange for billing credits. Rhode Island’s net metering program is one of the best in the country, allowing you to receive bill credits for all excess power generated up to 125% of your usage during a billing period.

Currently, all the utility companies in Rhode Island offer net metering, including National Grid and Rhode Island Energy.

Rhode Island residents typically do not need to do anything to apply for net metering — your solar installer will take care of the required interconnection application. After your solar panel installation, your utility provider will provide a bidirectional meter to measure incoming and outgoing power for net metering credits.

The federal solar tax credit, formally known as the solar Investment Tax Credit (ITC), is the most important incentive in Rhode Island and nationwide. Offered by the federal government, the incentive allows homeowners to claim 30% of their total system cost as a tax credit. You can apply the credit to your federal income tax burden for the year you install solar panels.

The ITC, initially set to expire in 2023, was extended by the Inflation Reduction Act in 2022. The credit will be available as follows:

If not extended or renewed, the ITC will phase out completely in 2035.

The average cost of a solar power system in Rhode Island is $2.87 per watt or $17,220 for a 6 kilowatt (kW) system. Based on this number, the federal tax credit could offer a reduction of $5,166 toward your federal income taxes, resulting in a net system cost of $12,054.

You can apply for the ITC by completing and attaching IRS Form 5695 to your federal tax return (Form 1040 or Form 1040NR). We recommend consulting a tax expert for assistance.

Rhode Islanders can save a significant amount by taking advantage of the state’s solar rebates and incentives. The federal tax credit can slash your net system cost by 30%, resulting in savings of a few thousand dollars. State-mandated incentives like the REF and REG programs can help save you on solar with a one-time rebate or fixed tariffs in exchange for excess energy generation. The state’s sales and property tax exemptions can also add to your overall savings.

Before going solar, it is important to make sure that you pick a company that offers the right panels, financing options, price point, and additional equipment for your unique needs. It is also important to pick a reputable solar provider to avoid solar scams. To help make this process safer and easier, we have compiled a list of our top recommended providers in Rhode Island. We recommend getting a quote from at least three options before making a final decision.

| Company | Best For | Cost of a 8kW System* | BBB Rating | Visit Site |
| Our Top Pick | Our pick for aesthetic panels | N/A | B- | |

| Company | BBB Rating | Best For | Cost of a 8kW System* | Visit Site |
| Our Top Pick | B- | Our pick for aesthetic panels | N/A | |

Rhode Island may be the country’s smallest state, but it offers big reasons to go solar. For instance, the state’s high power costs allow homeowners to save money by using the energy a solar system produces.

Homeowners in Rhode Island pay electricity rates nearly double the national average, at 26.92 cents per kilowatt-hour in May 2023 compared to 16.14 cents per kilowatt-hour nationally. This is why the payback period for a 6 kW home solar system in Rhode Island is less than eight years. Considering a typical system lasts up to three decades and includes warranty coverage, you can benefit from electricity savings for over 20 years after paying off your panels.

Additionally, the state’s many financial incentives can boost your solar savings even more. Solar panel owners also enjoy other benefits such as lowered carbon emissions, energy resilience, energy independence and increased property value. Overall, we think switching to solar power is worth it in the Ocean State.

If you are thinking of going solar, start by checking out our list of the best solar companies in Rhode Island.

Rhode Island does not offer a state tax credit, but residents are eligible for the 30% federal solar tax credit. However, Rhode Island offers other tax incentives that exempt homeowners from paying sales and property taxes on their solar systems.

Reputable solar companies will not offer “free” solar panels but may market no upfront cost with a solar loan or lease. A solar lease allows homeowners to “rent” solar panels for a monthly cost, rather than owning a system outright. In such cases, companies may use the term “free solar panels” since the homeowner does not purchase the panels upfront — but you will still have to pay for the equipment monthly.

High-quality solar panels can cost over $10,000. Watch for solar scams or misleading language that may advertise free solar panels.

Yes, all utility companies in Rhode Island offer net metering. Under Rhode Island’s net metering program, you can earn credits for all excess power generated up to 125% of your usage during a billing period. The state also offers virtual net metering, which allows eligible customers to participate in net metering regardless of whether a solar system is located on their property. For example, if you participate in a community solar project.

Several factors make Rhode Island a great state to adopt solar power, including high electricity costs, availability of incentives, shortened payback period and the presence of some of the best solar companies in the state.

We closely evaluate solar installation companies with a focus on the factors most important to homeowners like you. We based our solar company methodology on input from multiple homeowner surveys, discussions with industry experts and research into the renewable energy market. Our review process involves assessing each company on the following criteria, which we then use to calculate a rating out of 5 stars.

If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.