Rhode Island Solar Incentives, Tax Credits and Rebates

Are 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 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 performance-based programs, REF reduces your upfront cost through a discount from your installer. After the system is completed and approved, REF reimburses the installer for that discount.

REF can’t be combined with the Renewable Energy Growth Program on the same system, so you need to choose one or the other.

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.

Community solar

If you rent or your roof isn’t a good fit for solar, Rhode Island’s Community Solar Marketplace connects residents with shared solar farms elsewhere in the state. Subscribers get a discount on the electricity the farm generates without installing anything on their own property.

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: Residential solar systems and associated equipment are exempt from Rhode Island property tax, so homeowners generally aren’t taxed on the value added by the system.

What to know about net metering in Rhode Island

Net metering lets Rhode Island homeowners earn bill credits for excess electricity their solar panels send to the grid. Those credits can offset electricity you use at other times, lowering your utility bill.

For residential-size systems of 25 kilowatts (kW) or less, Rhode Island no longer limits system size based on your previous electricity use. Larger systems are generally limited based on the customer’s average annual electricity consumption over the previous three years.

For qualifying systems that began participating after April 15, 2023, net metering credits for electricity generated up to your annual usage are worth about 20% less than the credits available to earlier projects, subject to the state’s program capacity limits.

If your system generates more electricity than you use over the applicable period, excess generation may be compensated at a lower wholesale-based rate rather than the standard net metering credit rate. The rules differ depending on system size, so homeowners should check Rhode Island Energy’s current net metering tariff before choosing a system size.

Here’s how net metering generally works:

1. Your meter tracks the electricity you take from the grid and the excess solar electricity you send back.
2. When your panels send excess electricity to the grid, you earn credits on your electric bill.
3. When you use more electricity than your panels produce, those credits can help offset what you owe.

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

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 options for solar panels

Some mortgage programs allow eligible borrowers to include the cost of energy-saving improvements in a home purchase or refinance loan. Solar eligibility, borrowing limits and other requirements vary by program and lender.

• FHA Energy Efficient Mortgages: FHA EEMS let eligible borrowers finance cost-effective energy improvements as part of an FHA-insured purchase or refinance mortgage. A home energy assessment is required, and the improvements must be expected to save at least as much as they cost. FHA also has separate provisions for financing eligible solar and wind systems.
• VA Energy Efficient Mortgages: VA EEMs generally allow up to $6,000 in energy improvements based on documented costs and expected savings; larger amounts may be possible when supported by the property’s value.

Compare solar companies in Rhode Island

Working with a solar company in Rhode Island makes it easier to understand local incentives.

» RELATED: Top solar companies in Providence

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