How to Save Money on Solar Panels In Rhode Island

Key Points

• Rhode Island has aggressive renewable standards and offers a wide range of financial incentives for homeowners to install solar panels, aiming to produce 100% of its electricity through renewable technology.
• Homeowners in Rhode Island can save nearly $5,000 through the federal solar tax credit, which offers a 30% return on installation costs.
• The Rhode Island Renewable Energy Fund provides a grant of up to $7,000 per kWh installed, saving homeowners up to 66% of installation costs.
• Rhode Islanders can earn up to $2,500 per year for 15 years through the Renewable Energy Growth program, based on the amount of solar energy produced.

Despite being the smallest state, Rhode Island has some of the largest goals for solar energy in the next decade. This results in incredible benefits, such as net metering, state rebates, and community options. Applying for these incentives can save homeowners thousands with solar panels in Rhode Island.

However, with so many programs, you may not know where to start. In this article, we break them down one by one. From federal returns to government regulations, they’re worth reading about. So let’s get into it.

How to Save Money on Solar Panels in Rhode Island: Overview

At first glance, the price of solar panels in Rhode Island might dissuade you. However, homeowners in the Ocean State pay some of the highest rates for electricity in the country. That paired with a decent amount of sunlight makes purchasing an array an excellent decision.

But the earning potential of a solar panel system isn’t the only positive. Legislatures in Rhode Island have fought for some of the most aggressive renewable standards in the United States. Because of this, homeowners have access to a wide range of financial incentives. 

From rebates to tax exemptions, Rhode Islanders can practically cover the cost of an installation. Some can even earn a paycheck for energy production. Let’s take a close look at the available opportunities.

Solar Panels in Rhode Island: Federal Incentive

Even before looking for solar panel benefits in Rhode Island, homeowners should consider taking advantage of the federal solar tax credit. This nationwide program offers a 30% return on all purchases made toward an installation. This includes equipment, labor, and sales tax. Those installing a 6kW system in the Ocean State could save nearly $5,000 right off the bat.

However, in order to qualify for the program, you must purchase your system outright. Additionally, you must live at the residence where the system is installed, and all solar equipment must be new. 

The federal credit is one of the most substantial incentives in the country, but it won’t last forever. The return drops to 26% in 2033 and 22% in 2034. And unless it’s extended, the program terminates in 2035.

Rhode Island’s State Credits and Rebates

In some states, homeowners have access to statewide tax credits and rebates. These typically provide the most substantial assistance for paying off a system. Fortunately, Rhode Island is one of these states, offering a pretty hefty grant.

Rhode Island Renewable Energy Fund

The benefit comes from the Rhode Island Renewable Energy Fund, a budget established to help the Ocean State build renewable infrastructure for its lofty goals. Rhode Islanders can receive $850 per kWh installed, for a max of $7,000. 

This program works in conjunction with the federal solar tax credit, and when combined, it can save nearly 66% of installation costs.

Net Metering

Further, homeowners can interconnect their system to the local power grid and save money on utilities with net metering. This program requires investor-owned power companies to pay customers for excess solar energy. 

In Rhode Island, utility companies offer a renewable energy credit that applies to the next month’s bill. However, customers can opt for a payout if they would prefer a check. The renewable energy credit is only worth the avoided cost rate (nearly 25% the going rate for power), but when combined with the state’s performance payment, it balances out nicely.

Renewable Energy Growth Program

Rhode Islanders can sign up for the Renewable Energy Growth program, which pays out for the amount of solar energy produced by residential systems. It offers $0.25 per kWh, which splits between your electric bill and a cash payment. Those with a 6kW system could earn as much as $2,500 each year for 15 years (that’s a $37,500 deal).

While this is a huge benefit, it’s essential to know that you can’t utilize it if you receive the Rhode Island Renewable Energy Fund grant. Therefore, you should decide which program offers more benefit to you.

Solar Panels in Rhode Island: Government Regulations

All of Rhode Island’s incentives come from its incredibly aggressive renewable portfolio standards (RPS). We use a state’s RPS to determine its intention to invest in future clean energy. The better they are, the more residents can expect to receive for their solar array.

The Ocean State had a menial set of standards; 38.5% by 2035. But just last year, the RPS was updated to one of the most aggressive in the country. Now, Rhode Island plans to produce 100% of its electricity through renewable technology.

To do that, the state has a continually increasing annual goal. Their totals will go up by 4% in 2023, 5% in 2024, 6% in 2025, and onward until it reaches 100%. So not only do residents have good incentives currently, they can expect even more in the coming years.

Alongside these regulations, Rhode Island offers property tax exemptions. When installing solar panels, your home’s value can increase by thousands. And because homeowners shouldn’t be penalized for switching to clean energy, the Ocean State won’t increase property tax on that higher value. Go Rhode Island!

Additionally, residents benefit from a sales and use tax exemption on all purchases. While it’ll decrease the overall federal return, it’s a larger saving overall. That’s about 7% off the cost of your array.

Should Rhode Islanders Lease Solar?

In some states, residents can opt into a solar lease if they can’t afford to pay for an installation. While this disqualifies the system from incentives, including the federal solar tax credit, it’s a good alternative that results in electricity savings while also improving carbon footprints. 

Rhode Island is one state that allows solar leasing. And by offsetting high utility payments, homeowners can still save a considerable amount, even after lease payments. 

However, if you don’t have the ability to install panels on your home (maybe you’re renting), you can still go solar. Rhode Island has a community solar program, which allows multiple residents in an area to connect to a solar garden. 

It requires more than 5 customers to participate, but once the panels are installed, membership dues are only a fraction of traditional utility payments. So check into community solar options in your area and talk to your neighbors about getting started.

Solar Panels in Rhode Island: Incentive Summary

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