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), geothermal heat pumps, wind turbines and their mounting towers, and solar storage tanks for hot water systems. The savings amount depends on your total equipment costs – for example, on a $20,000 solar system, you would save $1,400 in sales tax.

To qualify, the equipment must be specifically listed in the state law and meet certain specifications. Some items like monitoring equipment must be specified or supplied by the renewable energy system manufacturer to be eligible. The exemption is automatically applied at the point of sale when purchasing from Rhode Island retailers, so there’s no application process or paperwork required from homeowners. This incentive has no expiration date and can be combined with other available solar incentives to maximize your savings on renewable energy investments.

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.

The exemption provides 100% protection from property tax increases related to your solar installation, with no dollar limit specified in the law. This means regardless of how much value your solar system adds to your home, that added value remains exempt from property taxation. The exemption appears to be ongoing as long as the solar system remains on your property, with no expiration date mentioned in the statute. Rhode Island homeowners should verify with their local tax assessor that this exemption is being properly applied to their solar installation, as property tax assessment and exemption administration occurs at the local level.

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 funds are paid directly to the installer once your system is complete and verified.

To qualify, 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 of $190,000 per installer, making it quite competitive. It’s important to ensure your contract with your installer clearly shows the grant amount and 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 the amount you owe on your electricity bill, 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, and the decision is binding for the contract’s lifetime. 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 can be combined with the 30% Federal Investment Tax Credit, but participants are not eligible for grants from the Renewable Energy Fund (REF). The program is administered by Rhode Island Energy, and specific pricing details are updated annually in program flyers.

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 for the full lease duration.

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, with household income at or below 80% of the state median income. The roof must be in good condition and able to meet certain performance requirements, which PosiGen will assess during their thorough review process. Interested homeowners can visit PosiGen’s website for a no-cost, no-obligation solar assessment to determine eligibility.

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 deduction is for renewable energy and energy efficiency charges, which amount to approximately 2.2 to 2.5 cents per kilowatt-hour. 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 electrical grid, while also reducing your monthly electricity bills when your system produces less than you consume.