There’s no way around it: Installing solar panels is expensive. The 30% federal solar tax credit has expired, but Rhode Island residents can still take advantage of state tax breaks, grant programs and performance-based solar incentives.
A statewide performance-based incentive lets homeowners and small-scale businesses sell their generated electricity under long-term tariffs at fixed prices.
Jump to insightSolar equipment is exempt from sales and property taxes in Rhode Island.
Jump to insightNet metering lets homeowners with solar panels send their extra power back to the grid in exchange for credits on future utility bills.
Jump to insightA typical residential solar panel installation costs $19,200 in Rhode Island.
Jump to insightAre there any solar panel incentives in Rhode Island?
Rhode Island has several solar panel incentives. In addition to grants and tax breaks, you can opt into performance-based programs (which pay a fixed rate for your energy) and net metering.
Renewable Energy Fund (REF) Program
Rhode Island’s Renewable Energy Fund (REF) is a program that gives grants (basically discounts) to help pay for renewable energy projects like solar. It helps homeowners, businesses and communities lower the upfront cost of installing clean energy systems.
REF is funded by the system benefit charge on electric bills and alternative compliance payments from retail electricity providers.
Unlike other programs, this one gives you money upfront (or as a discount), rather than paying you over time.
Renewable Energy (RE) Growth Program
Rhode Island’s Renewable Energy Growth Program lets approved participants sell electricity under long-term tariffs at fixed prices. If you’re approved, you can sell the electricity you produce to the utility at a fixed price for years.
Smaller projects (like home solar) are easier to join, while larger projects have to apply during specific enrollment periods. Some projects can earn extra incentives, like bonuses for building on certain types of land. Overall, the program makes renewables more affordable and predictable financially.
Solar tax breaks in Rhode Island
- Sales tax exemption: Solar panels and other renewable energy equipment are exempt from Rhode Island’s 7% sales and use tax.
- Property tax exemption: Rhode Island’s solar property tax exemption means that, for tax purposes, adding a solar energy system won’t increase your property’s assessed value. It doesn’t make going solar cheaper upfront.
What to know about net metering in Rhode Island
Net metering lets Rhode Island homeowners earn credits for extra electricity their solar panels send to the grid. These net metering credits (NMCs) lower your future electric bills.
Most of the time, credits roll over month to month. But now, you can choose to cash out any leftover credits once a year. Just know that payouts are at a lower (wholesale) rate, so keeping credits on your bill usually gives you more value.
Solar systems are typically sized to cover your energy needs — up to about 125% of your yearly usage.
Here’s how it works:
- Your meter tracks the energy you use and the energy your panels send to the grid.
- If you produce more than you use, you earn credits.
- If you use more than you produce, you pay the difference.
What to know about storage batteries
You’ll still rely on the grid when your panels aren’t producing (like at night), unless you add a solar storage battery. Solar batteries cost about $7,000 to $18,000, but programs like ConnectedSolutions can help offset that cost.
Solar panel costs in Rhode Island
Average solar panel costs in Rhode Island generally range from $14,997 to $29,994.
System size is a major factor in the cost of going solar. A typical Rhode Island household needs about a 6.4 kW system, which costs $19,200 on average. Depending on your energy needs, you might need a smaller or larger system.
Your total price also depends on whether you add battery storage to your system. Adding a solar storage battery can nearly double the total system price.
Average solar panel costs by system size in Rhode Island
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Statewide average | $14,997 | $17,996 | $20,996 | $23,995 | $26,995 | $29,994 |
How can I pay for solar panels?
Going solar is like buying a car. You could pay cash, but a lot of people finance or lease with minimal upfront costs.
- Solar loans work like any other home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.
- Leasing solar panels lets you set up a system without high upfront costs. A solar company installs and maintains the panels on your property, and you pay a monthly fee to use them.
» SOLAR PANELS: Lease vs. buy
Federal mortgage financing options
Energy Efficient Mortgages allow homeowners to finance energy-saving upgrades, including solar systems, as part of their mortgage, often with support from federal programs like FHA or VA.
- FHA Energy Efficient Mortgages are available to many homebuyers. This lets you add money to your mortgage for energy upgrades. The upgrade cost must be less than the expected energy savings, and a home energy assessment is required first.
- VA Energy Efficient Mortgages are available to military members, veterans and reservists. This lets you add up to $6,000 if energy savings justify the cost.
- Conventional Energy Efficient Mortgages are offered by private lenders (not government-backed). You can borrow up to 15% of a home’s value for energy upgrades. This may help borrowers qualify by adjusting debt-to-income rules.
Compare solar companies in Rhode Island
Working with a solar company in Rhode Island makes it easier to understand local incentives.
| Company | Customer rating | Pro install | Max. panel efficiency | Panel warranty | Payment options | Year founded | |
|---|---|---|---|---|---|---|---|
 Sunrun | Get Started | 4.3 |  | 22% | 20 years | Cash, loan, lease | 2007 |
 Project Solar | Learn More | 4.3 | | 20.9% | 25 years | Cash, loan | 2016 |
 ShopSolar | Learn More | 4.7 |  | Varies | Varies | Cash, loan | 2018 |
» RELATED: Top solar companies in Providence
FAQ
What happened to the federal solar tax credit?
The federal solar investment tax credit (ITC) previously let homeowners claim 30% of installation costs from their federal taxes. The ITC is not available for property placed in service after Dec. 31, 2025. It was phased out with the “One Big Beautiful Bill Act” (OBBBA) last year.
Homeowners with eligible property placed in service by Dec. 31, 2025, may still claim it on the appropriate tax return.
Are solar panels worth it in Rhode Island?
Going solar is often worth it in Rhode Island for the long-term savings on utility bills. Over 25 years, residents with solar panels avoid $106,356 in utility costs on average.
Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Your average energy consumption tells you what size solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
» COMPARE: Best solar companies
How do I know if my house is a good candidate for solar panels?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels again. This will cost around $5,000 for a 19-panel setup.
Solar photovoltaic (PV) technologies, more commonly known as solar panels, absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
Are there any commercial solar incentives in Rhode Island?
Yes, Rhode Island has commercial solar grants and C-PACE available. Commercial Property Assessed Clean Energy (C-PACE) is a financing program that helps businesses pay for building upgrades like energy efficiency, solar or water improvements. It covers up to 100% of project costs with long-term, fixed payments. So, there’s little to no upfront cost.
Additionally, the Regional Greenhouse Gas Initiative is a funding source that helps agricultural businesses improve their energy efficiency.
» EXPLORE: Solar incentives by state
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:
- Rhode Island Energy, “Rhode Island’s Renewable Energy Growth Program.” Accessed April 16, 2026.
- State of Rhode Island General Assembly, “Title 44 Taxation, Chapter 18, Sales and Use Taxes — Liability and Computation.” Accessed April 16, 2026.
- DSIRE, “Programs.” Accessed April 16, 2026.
- Rhode Island Commerce, “Renewable Energy Fund.” Accessed April 16, 2026.
- National Grid, “Net Metering in Rhode Island.” Accessed April 16, 2026.
- State of Rhode Island Office of Energy Resources, “Net Metering And Virtual Net Metering Overview.” Accessed April 16, 2026.
- U.S. Department of Energy, “Energy-Related Federal Financial Assistance Programs.” Accessed April 16, 2026.
