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 purchases in Rhode Island.

The exemption applies to a comprehensive list of renewable energy equipment including solar photovoltaic panels, solar thermal collectors, DC to AC inverters, manufactured mounting racks, monitoring equipment (if specified by manufacturers), geothermal heat pumps, wind turbines and their mounting towers, and solar storage tanks for hot water systems. The savings amount depends on your system size – for example, on a $20,000 solar installation, you would save $1,400 in sales tax. There are no income requirements, deadlines, or application processes since the exemption is automatically applied at the point of purchase by qualifying retailers. However, it’s important to note that this exemption only covers the specific equipment listed in the law, and some components like standard plumbing fixtures or electrical materials that could be fabricated into mounting systems are not included.

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. There’s no dollar limit on the exemption – it covers the full added value of your solar installation. The benefit continues for as long as you own the solar system and your home. To qualify, you simply need to be a Rhode Island homeowner with a residential solar energy system installed on your property. There are no income requirements, application deadlines, or time limitations – the exemption automatically applies once your solar system is in place and will show up in your annual 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 panels through the net metering program. This grant is designed to help reduce the upfront cost of going solar by providing direct financial assistance that goes to your solar installer after your system is installed and passes a quality inspection.

The program offers $0.65 per watt of solar capacity installed, with a maximum grant of $5,000 per customer. If you’re adding battery storage to your solar system, you can receive an additional flat $2,000 energy storage bonus. Your solar installer will handle the grant application process on your behalf, and the grant money goes directly to them after your system is complete, which should reduce your overall project cost.

To qualify, you must be a Rhode Island homeowner choosing the net metering option for your solar system (you cannot combine this grant with the REG program). The grant is only available for net-metered systems, and there’s a limit of $190,000 per installer annually. This is a popular program with limited annual funding, so it can fill up quickly during application rounds.

Important considerations include making sure your solar contract clearly shows the grant amount and includes a cancellation option if the program becomes fully subscribed before your application is processed. The program operates in funding rounds throughout the year, so timing your solar installation with available funding periods is essential for securing this incentive.

The Renewable Energy Growth (REG) Program is Rhode Island’s alternative solar incentive that allows 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 through a Production-Based Incentive (PBI).

Under this program, you sign a 20-year agreement that locks in both your electricity rate and your PBI payment rate, providing long-term financial predictability. Any solar energy you produce first goes toward reducing your monthly electric bill through credits, and any excess generation beyond what you owe is paid to you via direct deposit. This program can be combined with the 30% Federal Investment Tax Credit and energy storage incentives through the Connected Solutions program.

To be eligible, you must be a Rhode Island Energy customer and cannot participate in both REG and net metering – you must choose one or the other for the lifetime of your system. The REG program accepts various renewable technologies including solar, wind, small-scale hydropower, and anaerobic digestion. Importantly, if you choose REG, you cannot receive grants from the Renewable Energy Fund (REF) that are available to net metering customers.

The Affordable Solar Access Pathways (ASAP) Program is a Rhode Island state initiative that helps qualifying homeowners in environmental justice areas access rooftop solar through an innovative solar lease program. Administered by the Renewable Energy Fund and Rhode Island Office of Energy Resources, this program partners with PosiGen to provide solar installations with no minimum credit score or income requirements.

The program offers discounted solar lease pricing that guarantees first-year savings on energy costs, with expected savings continuing throughout the 25-year lease term. Participants receive additional benefits including a free home energy audit, energy efficiency upgrades at no extra charge, and comprehensive 25-year performance guarantee, maintenance, and warranty support. PosiGen handles all system repairs, warranty claims, and insurance during the lease period.

To qualify, homeowners 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 Program, have household income at or below 80% of state median income, and have a roof in good condition that can meet performance requirements. Interested homeowners can visit PosiGen’s website for a free, no-obligation solar assessment to determine eligibility.

Rhode Island’s Net Metering program allows solar homeowners to receive credit for the excess electricity their solar panels produce and send back to the grid. Under this 1:1 net metering system, each kilowatt-hour (kWh) of solar energy you export to the grid offsets one kWh of electricity you consume from the grid at nearly the full retail rate. This means your solar production can directly reduce your monthly electric bill on a dollar-for-dollar basis.

The financial benefit is substantial – you receive credit at almost the full retail electricity rate (minus small renewable energy and efficiency charges of about 2.2-2.5 cents per kWh). Any excess credits you don’t use in a given month automatically roll over to future months as dollar credits with no expiration date. As of February 2024, you also have the flexibility to cash out excess credits at a lower rate or transfer them to another account you own. This program is available to Rhode Island Energy customers (formerly National Grid customers) who install qualifying solar systems, making it an excellent way to maximize the value of your solar investment.