Rhode Island solar incentives, tax credits and rebates

Resources to make solar panels more affordable in 2024

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Do you own or rent?

house in rhode island with solar panels on the roof

After the full federal solar investment tax credit, the average cost to install residential solar panels is $11,928 in Rhode Island — cheaper than in many other states. The national average is $16,715. To help you save even more, the state has solar tax breaks, grants and performance-based incentives.

Key insights

  • The average federal tax credit value is $5,112 in Rhode Island.
  • Residents can also take advantage of solar tax breaks, grants and performance-based incentives.
  • Rhode Island homeowners with solar panels save an estimated $34,519 over 25 years.

Solar incentives in Rhode Island

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Rhode Island. If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of the system's total cost, which includes equipment, labor and permits.

The federal solar investment tax credit drops to 26% in 2033 and 22% in 2034.

For example, the average system costs $17,040. At that price, you can get a $5,112 credit when you file your taxes.

The solar tax credit is not a rebate or refund — you must claim it when you file federal taxes in the year that your solar panel system becomes operational. To do this, you have to complete Form 5695. The credit is also nonrefundable, so any portion that exceeds your tax liability rolls over into the next tax year.

Residential solar incentives in Rhode Island

On top of the federal ITC, Rhode Island also has some local solar incentives:

  • You’re exempt from sales tax when you purchase solar equipment.
  • Homes with solar can get property tax exemptions for the value your solar energy system adds to your home.
  • The Renewable Energy Growth Program offers a performance-based incentive to homes with solar energy systems up to 25 kilowatts (kW). You can get up to 27.75 cents per kilowatt-hour (kWh).
  • The Rhode Island Renewable Energy Fund offers grants for home solar energy systems. You can get up to $5,000 per project.

» MUST-KNOW: Tax benefits of owning a home: deductions and secrets

What to know about net metering in Rhode Island

Sometimes, your system will make more energy than your home needs. If you don’t store it in solar batteries, you can sell it to your local electric company through net metering programs.

In Rhode Island, utility companies either credit your electric account or buy your excess energy at the utility’s retail rate. In most cases, Rhode Island Energy simply reads the retail meter at the beginning and end of the billing period to determine the net energy usage and calculate the net metering credits.

If your home has exported more electricity than it imported in any given month, the excess credit is carried forward to the next billing cycle.

Solar energy systems up to 10 megawatts (MW) in capacity that are designed to generate up to 125% of your annual electricity consumption are eligible for net metering in Rhode Island.

Solar resources in Rhode Island

Below are additional resources that can guide you through transitioning to solar in Rhode Island.

» GREENEST STATES: Rhode Island ranks No. 23

Find solar companies in Rhode Island

Compare popular solar companies available in Rhode Island below. Read our guide to the best solar companies for more.

Do you own or rent?


Can I get solar panels for free in Rhode Island?

While there are no programs to receive free solar panels in Rhode Island, you can lease solar equipment or enter a power purchase agreement (PPA) with minimal upfront costs. Neither is totally free, however. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.

» FREE SOLAR PANELS: Are they really free?

How can I pay for solar panels?

You can pay cash, but most people finance solar panels. A solar loan works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). If you are considering a solar loan, lease or PPA, always ask:

  • Is there a down payment?
  • How much will I pay per month?
  • Will monthly payments increase, and by how much?

» SOLAR PANELS: Lease vs. buy

How much can I save with solar panels in Rhode Island?

In Rhode Island, the average savings is $34,519 over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money versus paying traditional utility bills.

» EXPLORE: Where your solar savings go the furthest

Are there any commercial solar incentives in Rhode Island?

Yes, Rhode Island has commercial solar property tax, sales tax, grants and loan incentives.

» MORE: Commercial solar panels

Is my HOA allowed to restrict solar panels?

There are no state laws that prohibit homeowner associations from restricting solar panels in Rhode Island.

Bottom line: How much are solar panels in Rhode Island?

Rhode Island has many solar incentives to lower the cost of going solar. Along with the federal solar investment tax credit, you can take advantage of solar tax breaks, grants, performance-based incentives and net metering. Plus, with an average savings of around $34,519, converting your home to solar just makes sense for many homeowners.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in Rhode Island and the average solar costs in other states.

Solar costs: Rhode Island vs. nearby states

*Before the federal investment tax credit (ITC); **When you pay in full upfront

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. DSIRE, “Rhode Island Solar Programs.” Accessed Nov. 17, 2023.
  2. DSIRE, “Net Metering in Rhode Island.” Accessed Nov. 17, 2023.
  3. EcoWatch, “Solar Panel Cost in Rhode Island.” Accessed Nov. 17, 2023.
  4. United States Environmental Protection Agency, “Summary of Inflation Reduction Act provisions related to renewable energy.” Accessed Nov. 17, 2023.
  5. Solar Energy Industries Association, “Rhode Island Solar.” Accessed Nov. 17, 2023.
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