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 equipment, 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), 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 system, you would save $1,400 in sales tax.

To qualify, the equipment must be on the state’s approved list and meet specific requirements. Some items like monitoring equipment must be specified or supplied by the manufacturer, and certain components like standard hot water tanks don’t qualify unless they’re part of a complete solar system. There are no application deadlines since this is an automatic exemption applied at the point of purchase, and it remains in effect indefinitely unless changed by state legislation. Homeowners should ensure their installer or retailer applies this exemption correctly at purchase, as it represents immediate savings that reduce your upfront solar investment costs.

Rhode Island’s Residential Solar Property Tax Exemption is a state tax benefit that 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 exemption ensures you won’t pay higher property taxes because of that increase.

While the provided legal text doesn’t contain specific details about the solar exemption amount or eligibility requirements, this type of exemption typically applies to residential solar installations and covers the full added value of the solar system. To qualify, homeowners generally need to have solar equipment installed on their primary residence and may need to apply for the exemption with their local tax assessor. Since property tax exemption rules can vary by municipality and change over time, it’s important to check with your local tax assessor’s office for current requirements, application procedures, and any deadlines for claiming this benefit.

The Renewable Energy Fund (REF) Small-Scale Solar Grants program is a state-funded incentive that provides direct 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 money that goes directly 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 application process on your behalf, and the grant money is paid directly to them after your system is complete and inspected.

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 installed on your property. Since this is a popular program with limited annual funding, it’s important to work with your installer early and ensure your contract includes a cancellation clause in case the program becomes fully subscribed before your application is processed.

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 long-term contract. Instead of traditional net metering, participants sign a 20-year agreement with fixed electricity prices and receive Production-Based Incentive (PBI) payments for the energy their solar system generates. You receive bill credits up to your monthly electricity charges, and any excess generation is paid to you through direct deposit.

This program is mutually exclusive with net metering – you must choose one or the other for the lifetime of your solar system. To be eligible, you must be a Rhode Island Energy customer, and the program covers solar, wind, small-scale hydropower, and anaerobic digestion systems. The REG program cannot be combined with grants from the Renewable Energy Fund (REF), but it can be paired with the 30% Federal Investment Tax Credit. The program is administered by Rhode Island Energy, and specific pricing details vary based on current program rates and system size.

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 provides complete system maintenance, warranty support, and performance guarantees for the full 25 years, meaning homeowners don’t have to worry about repairs or system performance issues.

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 programs, with household income at or below 80% of the state median income. Your roof must be in good condition to meet performance requirements. The program is available to homeowners on both standard residential utility rates and low-income utility rates, making solar accessible regardless of your current electricity plan.

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 amount to approximately 2.2 to 2.5 cents per kWh. These credits roll over from month to month indefinitely as dollar credits on your utility bill. As of February 2024, customers also have the option to cash out their excess credits at a lower rate or transfer them to another account they own with the same utility company.