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. For items like monitoring equipment and mounting towers, they must be specified or supplied by the renewable energy system manufacturer. There are no income restrictions or application deadlines, as this exemption applies automatically at the point of purchase. However, homeowners should ensure their installer or retailer applies the exemption correctly, as some vendors may not be familiar with all qualifying items under this program.

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 be taxed on that added value.

The exemption provides 100% protection from property tax increases related to your solar installation, with no dollar limit specified in the statute. This means regardless of how much value your solar system adds to your home, you won’t pay extra property taxes on that increase. The exemption applies to both the solar equipment itself and any increase in your home’s overall assessed value due to the solar installation.

To qualify, you must be a Rhode Island homeowner with a residential solar energy system installed on your property. The exemption is automatic once your solar system is in place and assessed – you don’t need to file a separate application. There are no income restrictions or other eligibility requirements beyond owning residential property with solar panels.

This exemption continues for as long as you own the solar system and remains a Rhode Island resident. There are no time limits or expiration dates, making this a permanent benefit. Keep in mind that while your solar system won’t increase your property taxes, you’ll still pay normal property taxes on the rest of your home’s value, and this exemption only applies to Rhode Island state property taxes.

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 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 receive the grant payment directly after your system is completed and inspected.

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 and is popular, so it can become fully subscribed. Make sure your solar contract clearly shows the grant amount and includes a cancellation option if the program runs out of funding. 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 Rhode Island’s state-run solar incentive that allows homeowners to sell their solar energy production directly to Rhode Island Energy under a guaranteed 20-year contract. Instead of just getting credits on your electric bill like traditional net metering, REG participants receive both bill credits up to what they owe each month, plus direct cash payments (via direct deposit) for any excess energy their system produces beyond their usage.

The program offers a fixed electricity price plus a Production-Based Incentive (PBI) payment for every kilowatt-hour your system generates over the 20-year contract period. The exact rates vary by program year and are set annually by Rhode Island Energy. You must be a Rhode Island Energy customer to participate, and your system can include solar, wind, small-scale hydropower, or anaerobic digestion technologies. Importantly, if you choose REG, you cannot participate in the state’s net metering program or receive grants from the Renewable Energy Fund (REF) – it’s an either/or decision that’s binding for the life of your contract. However, you can still claim the 30% federal solar tax credit and participate in the Connected Solutions battery storage program if you add energy storage to your system.

The Affordable Solar Access Pathways (ASAP) Program is a Rhode Island state initiative that makes solar energy accessible to qualifying households in environmental justice areas 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 rooftop 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 value through free home energy audits and efficiency upgrades at no extra charge. PosiGen provides comprehensive coverage including a 25-year performance guarantee, maintenance, warranty support, and system insurance for the entire lease duration.

To qualify, you must live in a 1-4 unit home within a designated Environmental Justice Focus Area or eligible census tract, have a household income at or below 80% of the state median income, and have a roof in good condition that can meet performance requirements. The program provides guaranteed savings for residents on both standard residential and low-income utility rates, making clean energy accessible to communities that have historically faced barriers to solar adoption.

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 power you export to the grid.

The financial benefit is substantial: for every kilowatt-hour (kWh) of excess solar energy you produce, you receive nearly the full retail electricity rate as a credit on your bill. The only small reduction is about 2.2-2.5 cents per kWh for renewable energy and energy efficiency charges. Any unused credits roll over 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 systems. There are no specific deadlines mentioned, but net metering policies can change over time, so it’s worth acting while the current favorable 1:1 crediting structure remains in place. The ability to carry credits forward indefinitely makes this program particularly valuable for homeowners whose solar production varies seasonally.