Updated Jan 10, 2023
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Of all the great reasons to live in the state of Rhode Island, affordable electricity is not one of them. The electric costs in Rhode Island are considerably higher than in other states, making a solar power system something that many homeowners want. However, these systems can cost $15,000 or more, and finding the best incentives or a solid grant program can save you thousands of dollars. If you are looking for all of the best Rhode Island solar incentives, our guide will show you why a solar installation could make sense. We’ve also included information about tax rebates and incentives to help you save money on your solar energy system.
Rhode Island has a strong Renewable Energy Fund that helps support both business and residential solar power producers.
According to the SEIA regarding solar friendliness, Rhode Island currently ranks 31st in the nation. In 2021 Rhode Island was ranked 24th, so there has been a slight decrease in the total ranking of this state. However, some really great programs can help you with energy savings and lower electricity rates.
The main reason to go solar in Rhode Island is the high cost of electricity. Over time you will recuperate the system cost of the solar installation much quicker because of these high kilowatt-hour charges from utility companies in Rhode Island.
In addition to the money savings, many homeowners and business owners decide to go solar as it benefits the environment. The renewable energy system will allow for long-term greener energy and less reliance on the grid. These upgrades to your home can also increase the value and equity in your home.
Rhode Island solar costs will vary depending on the system size and the financial incentives you take advantage of. For most, the system costs will range from $15,000 to $20,000. With the Rhode Island Renewable Energy Fund, grand programs, C PACE financing, and federal tax incentives, you can save quite a bit of money upfront and as your system produces electricity.
The average savings from the Federal Tax savings programs for Rhode Island homeowners will be around 5,000 dollars. However, the REF fund also makes it easier to make money through the years with energy production. You will also not pay taxes on solar panel purchase and installation, which can save a few thousand dollars. Homeowners and business owners will be able to reduce the total out-of-pocket spending on their solar installation significantly.
The Federal Solar Investment Tax Credit (ITC) is the best solar incentive in Rhode Island, and it is a program offered by the federal government. However, in addition to this strong program, there are other ways to continue to earn money on your solar system as you use it and learn to live more efficiently. Many state governments have an additional tax credit that they offer homeowners, but Rhode Island does things a little differently.
|Federal Solar Tax Credit (ITC)||Rhode Island residents can take advantage of the Federal Solar Tax Credit and get a discount of 30% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for $6,000 on your next tax return.||December 31st, 2032|
|Net Metering||Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Net metering in Rhode Island is not mandated, but companies like Rhode Island power do participate in it.||None|
|Property Tax Exemption||The state of Rhode Island does not increase property taxes for those with a solar panel installation. This can save thousands in property taxes through the years.||None|
|Sales Tax Exemption||No sales tax is charged on the purchase of a solar system in Rhode Island for either commercial or residential customers.||None|
|Renewable Energy Growth||The state-mandated program from Rhode Island is known as REG. This program allows homeowners to earn credit for the renewable energy they produce and use it to their benefit for years to come.||15-20 years from the date of installation|
There is currently no state-level tax credit for those that install a solar power system in Rhode Island. The program that Rhode Island has put in place instead of the tax program pays customers for their solar photovoltaic and solar array contributions to the grid. Details of this program are seen below, and many find it more beneficial than the tax credit.
When purchasing a solar power system in Rhode Island, you will be 100% exempt from the sales tax that would typically be paid on this purchase. The Rhode Island Solar Sales Tax Exemption program works for residential, commercial, and even nonprofit businesses.
The Rhode Island Solar Property Tax Exemption helps make the cost of a solar panel system much more affordable. Solar panel installation will typically increase the value of your home and therefore raise your taxes. Luckily with the Rhode Island Solar Property Tax Exemption, this is not something that homeowners need to be concerned with.
With the property tax exemption, your property values will increase, but your taxes will remain the same. This is an excellent benefit to a homeowner, especially those looking to sell their home at some point.
Net metering is the process of banking some of the excess energy you create and having the utility company give it back to you at a reduced rate when your system is not producing enough. There are some excellent Rhode Island Net Metering programs, but unfortunately, they conflict with the Renewable Energy Growth Program.
The Renewable Energy Grown Program is a much better overall saving, and if you get in at the right time, it can save you quite a bit of money. It can’t be combined with net metering, so make sure that you carefully decide which of these routes is the best for you.
The Rhode Island Renewable Energy Growth or REG Program is the best way for homeowners to save money on their solar system at the state level. The program is very similar to net metering, but the state runs it instead of individual utility companies.
As your system produces solar electricity, you will earn a Performance Based Incentive or a PBI for the energy produced. This PBI is then paid back as a bill credit and then an additional cash payment if you go over the total amount of energy used. If you have a small solar system, chances are you won’t see much of an impact. Expect a large amount of payout for large systems that create excess energy.
With a small-scale solar class which is less than 1 and 15 Kilowatts, you will earn about 28 cents per kWh for the first 15 years. With systems that produce between 15 and 25 kW, the payout is 24.35 cents/kWh for the first 20 years.
This is a very strong program that will add up quickly and save you quite a bit of money. Unfortunately, the program will expire in 2029, so it makes sense to enroll now to receive the full benefits for as long as possible.
Some local areas will provide solar grants to residential customers. These grants typically require you to apply before purchasing and installing the solar system. There are both minimum and maximum grant amounts, and your application can be denied for various reasons.
For solar domestic hot water heating, you can see up to 25% of the project contract price being given to you as a way to afford a greener, more solar-friendly home. There are also grants available for Solar PV systems.
As you saw, the residential programs for Rhode Island homeowners were quite good. Luckily there are some strong programs for commercial customers as well. These include a variety of ways to save between grants, tax incentives, and rebates.
The solar incentives for nonprofits and businesses will not be any different than they are for commercial customers. In Rhode Island, these groups are put under the same umbrella and can apply for the same programs. The biggest opportunity for solar system owners is typically the REG program put in place.
The United States Department of Agriculture offers a REAP grant or Rural Energy for America program. This is a great loan program for agricultural producers. Agricultural producers have to use a lot of electricity to keep their facilities up and running.
With the REAP Grant, agricultural producers can save money on loans for their solar system product costs and any out-of-pocket installation for the panels.
Getting a great rate and being able to qualify for a loan are the major reasons agricultural producers will take advantage of these financing options.
For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building that year. The Federal Solar Tax Credit is the best way for Rhode Island state businesses and property owners to save the most amount of money on their solar system installation, even if the REG program is the best for long-term savings. This program will continue through the end of 2032, as a part of the Inflation Reduction Act.
The net metering program in Rhode Island is not bad, but again it cannot be combined with the Renewable Energy Growth Program. For most business owners, the REG program ends up saving more money. Also, since this program only lasts a certain number of years, it makes sense to use it while you can and eventually switch to net metering when the program expires.
As we discussed with the residential Renewable Energy Growth Program, this is a way to save money on your electric bills for many years. This incentive program works as a feed-in tariff. Any extra energy your home solar projects create daily will go back to the national grid providers.
At the end of the month, any electricity you need to use will be offset by the money you have earned through the REG program. If you have produced more energy than you paid for, there will be a cash payment at the end of the month.
Depending on the size of your system, these credits can last 15 to 20 years.
Even though the Federal REAP program is in place in Rhode Island, there are additional options for agricultural businesses looking to work on renewable energy projects. Anything done to improve energy efficiency can be included as part of this program.
The total amount of these grants can be up to $20,000, considerably more than you will see with other options. The best way to qualify for the Agricultural Energy Program is to have a combination of your own financing with a bit of help from the AEP.
Rhode Island has a commercial solar sales tax exemption for those that are purchasing and installing new solar panels. These solar panels would typically be subject to the 7% state sales tax, but not so in Rhode Island.
Rhode Island has spent some time developing and implementing these impressive solar incentives and programs. Even though there is no state-level tax incentive, many homeowners and business owners would rather have the REG program to help with these savings. In the state of Rhode Island, the cost of electricity is high. Therefore, homeowners and business owners can quickly recuperate any costs put into purchasing and installing their solar panel systems. Keep this in mind as you decide to go solar.
Solar in Rhode Island is worth it because of the higher costs of electricity in Rhode Island. Overall the cost of living in Rhode Island can be greatly reduced by installing a system like this. Solar is worth it for the financial benefits and the environmental impacts in the state of Rhode Island.
Solar panels in Rhode Island are about $20,000, but this will change based on the number of incentives, rebates, or grants you qualify for. In addition, the total costs can vary based on the size of your home and how much electricity is needed.
Solar panels are not offered for free in Rhode Island. The best saving program for clean energy in Rhode Island is the Federal ITC program and the REG program.
Currently, the solar rebates in Rhode Island include federal rebates and the state-level REG program. These will help to ensure that you are saving money at the time of purchase as well as over time
Solar panels will increase the value of your home, but they will not raise your taxes in Rhode Island. Luckily taxes in Rhode Island are not impacted at the residential or commercial level for the installation of green power initiatives.
The current Federal ITC programs allow a 30% rebate on the total cost of the solar system. There is no additional tax benefit at the state level, but this program is set to provide 30% rebates through the end of 2032.
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