Rhode Island

Rhode Island’s Renewable Energy Sales Tax Exemption eliminates the state’s 7% sales tax on specific renewable energy equipment and components. This means when you purchase qualifying solar panels, inverters, mounting equipment, wind turbines, geothermal heat pumps, and other approved renewable energy products, you won’t pay the standard sales tax that applies to most other purchases in the state.

The exemption covers a comprehensive list of renewable energy equipment including solar photovoltaic panels, solar thermal collectors, DC to AC inverters, manufactured mounting racks for solar installations, monitoring and control equipment specified by manufacturers, and solar storage tanks for hot water systems. To qualify, the equipment must be specifically listed in the state law and meet the technical requirements outlined in the statute. There are no income limits, deadlines, or application processes – the exemption automatically applies at the point of purchase when you buy qualifying equipment from Rhode Island retailers. However, the exemption doesn’t cover materials that could be fabricated into mounting systems or standard components like pumps and electrical fixtures unless they’re integral parts of exempt equipment shipped directly from the manufacturer.

Rhode Island’s Residential Solar Property Tax Exemption protects homeowners from paying additional property taxes on the increased value that solar panels add to their home. When you install a solar energy system, it typically increases your property’s assessed value, but this state tax exemption ensures you won’t pay higher property taxes because of that increase.

This exemption provides ongoing financial savings by keeping your property tax bill the same as it was before installing solar panels, regardless of how much value the solar system adds to your home. The benefit continues for as long as you own the solar system and your home. There are no specific eligibility requirements mentioned beyond having a residential solar installation, no application deadlines, and no time limitations on the exemption. Homeowners should note that this exemption only applies to the solar equipment itself and doesn’t affect other aspects of your property tax assessment.

The Renewable Energy Fund (REF) Small-Scale Solar Grants program is a state-funded incentive that provides cash grants to Rhode Island homeowners who install solar panel systems. This grant is designed to reduce the upfront cost of going solar and is only available for net-metered solar systems (not for systems enrolled in the REG program).

The program offers $0.65 per watt installed, with a maximum grant of $5,000 per customer. Additionally, homeowners who install solar paired with battery storage can receive an extra $2,000 energy storage bonus. Your solar installer will handle the grant application process on your behalf, and the grant money goes directly to the installer after your system is installed and passes a quality assurance evaluation.

This is a popular program with limited annual funding, so it can fill up quickly. Make sure your solar contract clearly shows the grant amount and includes a cancellation option if the program becomes fully subscribed before your installation. The program is currently in Round 24-1, which opened on February 23, 2024. Each installer is also limited to $190,000 in total grants per year, so timing and installer selection can be important factors.

The Renewable Energy Growth (REG) Program is a state-administered solar incentive that allows Rhode Island homeowners to sell their solar energy production directly to Rhode Island Energy under a 20-year contract with guaranteed fixed prices. Instead of traditional net metering, participants receive both bill credits for the electricity they use and direct cash payments for any excess energy their system produces beyond their home’s needs.

Under this program, homeowners sign a long-term contract that provides a fixed electricity price plus a Production-Based Incentive (PBI) payment for all energy generated by their solar system. Any solar production that exceeds what appears as credits on your monthly electric bill gets paid out as a direct deposit to your bank account. The program is available for solar, wind, small-scale hydropower, and anaerobic digestion systems, and participants can still take advantage of the 30% Federal Investment Tax Credit.

To be eligible, you must be a Rhode Island Energy customer, and you cannot participate in both REG and the traditional net metering program – you must choose one or the other for the lifetime of your system. The REG program also makes you ineligible for grants from the Renewable Energy Fund (REF). Participants can still join the Connected Solutions battery storage program if they have energy storage systems. This program offers a predictable income stream over 20 years, making it an attractive option for homeowners who want guaranteed payments for their solar production.

The Affordable Solar Access Pathways (ASAP) Program is a Rhode Island state initiative that helps qualifying households in environmental justice areas access rooftop solar through a special solar lease program. The program combines solar installation with energy efficiency services, making clean energy more accessible to communities that have historically faced barriers to solar adoption.

Important Note: This program is currently on pause and not accepting new applications. The Rhode Island Office of Energy Resources and Renewable Energy Fund are reviewing next steps, including potentially finding a new program vendor.

Financial Benefits: The program offers a discounted solar lease with guaranteed first-year savings on energy costs. Participants receive savings whether they’re on the standard residential utility rate (A-16) or low-income rate (A-60). The lease includes a 25-year performance guarantee, maintenance, and warranty support at no additional cost.

Eligibility Requirements: To qualify, you must live in a 1-4 unit home located in a designated Environmental Justice Focus Area or census tract eligible for federal solar Low-Income Communities Bonus Credit. Your household income must be at or below 80% of the state median income, your roof must be in good condition, and there are no minimum credit score requirements.

Special Considerations: Current ASAP participants with questions about their projects should contact PosiGen Customer Service at 888-939-4442. Homeowners interested in this program should monitor the Rhode Island Office of Energy Resources website for updates on when the program may resume accepting applications.

Net metering in Rhode Island allows solar homeowners to receive credit for the excess electricity their solar panels produce and send back to the grid. When your solar system generates more power than your home uses, that extra energy flows into the electrical grid and you receive credits on your utility bill. Rhode Island Energy (formerly National Grid) operates this program with a 1:1 credit system, meaning you get full retail rate credit for each kilowatt-hour of solar energy you export.

Here’s how the financial benefit works: each month, your solar production is netted against your total electricity consumption on a one-to-one basis. If you produce more than you use in a given month, those excess credits roll over to future months at nearly the full retail rate – you only lose about 2.2 to 2.5 cents per kWh in renewable energy and efficiency charges. These credits can roll over indefinitely as dollar credits on your account. As of February 2024, you also have the option to cash out excess credits at a lower rate or transfer them to another account you own, giving you more flexibility in managing your solar investment.