Solar Guide

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 systems, wind turbines, geothermal heat pumps, and other approved renewable energy products, you won’t pay the standard Rhode Island sales tax on these items.

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 for solar installations, monitoring and control equipment (when specified by manufacturers), and solar storage tanks for hot water or space heating systems. The law specifically requires that certain components like monitoring equipment must be specified or supplied by the renewable energy system manufacturer to qualify for the exemption.

This tax exemption is available immediately when you make qualifying purchases – there’s no application process or waiting period. However, you should keep detailed records of your purchases and ensure the equipment you’re buying is specifically listed in the state law. The exemption applies only to the equipment itself and doesn’t cover general construction materials that could be fabricated into mounting systems or standard plumbing and electrical fixtures unless they’re shipped as an integral part of qualifying equipment.

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 added value.

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. There are no dollar limits or caps on this benefit – whether your solar installation adds $10,000 or $30,000 to your home’s value, you’re protected from the corresponding property tax increase. The exemption continues for as long as you own the solar system and remains at your property, making it a long-term benefit that can save you hundreds or thousands of dollars annually depending on your local tax rates and system value.

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 inspected.

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 application process on your behalf and receive the grant payment directly after completing the installation and passing a quality assurance evaluation.

To be eligible, you must be a Rhode Island homeowner installing a net-metered solar system (you cannot combine this grant with the REG program). The program has limited annual funding and is popular, so it can become fully subscribed. Make sure your solar contract clearly shows the grant amount and includes a cancellation option in case funding runs out. Each installer is also limited to $190,000 in total grants per year, so timing and installer selection can be important factors in securing your grant.

The Renewable Energy Growth (REG) Program is Rhode Island’s state-administered solar incentive that allows homeowners to sell their solar energy production directly to Rhode Island Energy under a long-term contract. Instead of just getting credits on your electric bill like traditional net metering, REG participants receive both bill credits and direct cash payments for the electricity their solar system produces. This program is administered by Rhode Island Energy and is designed to support distributed solar development across the state.

Under the REG program, participants sign a 20-year contract with fixed electricity prices and receive Production-Based Incentive (PBI) payments for every kilowatt-hour their system generates. You’ll receive bill credits on your electricity bill up to the amount you owe, and any excess generation beyond your bill amount is paid to you through direct deposit. The exact payment rates are set by Rhode Island Energy and vary based on system size and installation date. This program can be combined with the 30% Federal Investment Tax Credit for additional savings.

To be eligible for the REG program, you must be a Rhode Island Energy customer and your system must use eligible technologies including solar, wind, small-scale hydropower, or anaerobic digestion. Important to note: you must choose between REG or traditional net metering – you cannot participate in both programs, and this decision is binding for the lifetime of your contract. Additionally, REG participants are not eligible for grants from the Renewable Energy Fund (REF), though they can still participate in the Connected Solutions battery storage program for additional compensation during peak demand periods.

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 also receive free home energy audits and efficiency upgrades at no extra charge. PosiGen handles all system maintenance, repairs, warranty claims, and insurance for the full 25 years, plus provides a performance guarantee with compensation if the system underperforms.

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 Program, with household income at or below 80% of state median income. Your roof must be in good condition and able to meet performance requirements. The program website does not specify application deadlines, suggesting it may be ongoing based on funding availability.

Rhode Island’s Net Metering program allows homeowners with solar panels to receive credit for the excess electricity they generate and send back to the grid. Under this program, your solar system’s monthly production is netted against your monthly electricity consumption on a 1:1 basis, meaning you receive full retail rate credit for most of the solar energy you export to the grid.

The financial benefit works like this: when your solar panels produce more electricity than you use in a month, the excess energy is credited to your account at nearly the full retail electricity rate. The only small reduction is for renewable energy and energy efficiency charges, which amounts to approximately 2.2 to 2.5 cents per kWh. These credits roll over from month to month indefinitely as dollar credits, giving you flexibility to use them when needed. 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.

This program is available to Rhode Island Energy customers (formerly National Grid customers) who install qualifying solar energy systems. The net metering arrangement provides long-term value by ensuring you’re compensated fairly for the clean energy your solar system contributes to the grid, while also reducing your monthly electricity bills when your system produces less than you consume.