Rhode Island’s Key Solar Incentives: A Breakdown

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As the global demand for renewable energy continues to grow, Rhode Island is emerging as a leader with its comprehensive suite of solar incentives. These incentives are designed to make solar energy more accessible and affordable for residents and businesses, promoting the state’s commitment to environmental sustainability and economic growth.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this credit on your federal income taxes, you must purchase the system with cash or a solar loan—leasing the system makes you ineligible for the ITC.

Additionally, you must have a sufficiently high tax liability, though any unused credit can be carried over from year to year until the ITC expires at the end of 2034. The only exception is for tax-exempt entities, such as nonprofit organizations, which may be eligible for a direct payment instead of a tax credit.

Net Metering

Rhode Islanders transitioning to solar power have the opportunity to engage in a net metering program. Homeowners in Rhode Island who produce power via solar panels are eligible to receive bill credits for all the power they generate, up to 125% of their on-site consumption during any billing period. This has the potential to substantially reduce or even eliminate their electric bills.

Renewable Energy Growth (REG) Program

In Rhode Island, alongside the net metering program, there exists an alternative option called the Renewable Energy Growth (REG) program, administered by Rhode Island Energy. However, participants must choose one program and cannot simultaneously opt for both. By selecting the REG program, homeowners commit to a 15 or 20-year contract, wherein they sell their energy output to Rhode Island Energy. Compensation can either be received through bill credits or direct deposit for surplus generation.

Renewable Energy Fund (REF) Small-Scale Solar Program

Rhode Island residents transitioning to solar energy might qualify for a grant under the Renewable Energy Fund (REF) Small-Scale Solar Program. This opportunity is exclusively accessible to Rhode Island homeowners who opt for net metering, rather than the REG Program. The grant is allocated to the solar system installer but is intended to be passed on to you, yielding direct savings of up to $5,000 (with an additional $2,000 available for installing solar energy storage systems). As the program receives limited annual funding, it is advisable for your installer to apply promptly.

Connected Solutions

(currently under regulatory review and pending approval)

Rhode Island Energy’s Connected Solutions program provides additional compensation for Rhode Island homeowners with solar panels. During peak demand periods on the New England electric grid, homeowners can be rewarded for using their solar power instead, reducing the strain on the grid. This program is available to Rhode Islanders participating in either the net metering program or the REG Program.

Sales Tax Exemption

The Division of Taxation has extended certain due dates to July 15, 2024, following the IRS’s April 4, 2024 announcement about federal due date extensions due to severe storms and flooding. For more information on Rhode Island due dates, refer to Advisory 2024-16 and Advisory 2024-17.

Property Tax Exemption

Similarly, Rhode Islanders need not worry about property tax increases following the installation of solar panels. Despite solar panels potentially boosting your home’s value by about 4%, Rhode Island encourages solar adoption by excluding this increase from property tax assessments.

Solar for All

• The Rhode Island coalition of applicants intends to utilize this funding to introduce and enhance a comprehensive set of seven financial assistance programs and twelve technical assistance initiatives for project deployment. These initiatives are strategically crafted to tackle barriers to solar adoption in Rhode Island’s low-income and disadvantaged communities in a fair manner. Each financial assistance program is custom-tailored to alleviate specific and longstanding financial obstacles to solar adoption while catering to the needs of low-income renters and homeowners. The proposed financial assistance programs aim to provide tangible benefits of dependable solar power directly to Rhode Island’s historically underserved communities, incorporating eligibility requirements tailored to low-income and disadvantaged communities.
• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development.

Small Scale Solar Grants (Commerce RI)

CommerceRI’s Renewable Energy Fund (REF) aims to boost renewable energy usage in Rhode Island, benefiting the state through cost-effective and diverse energy sources. REF offers grants for projects generating cleaner, sustainable electricity and promoting job growth in green technology sectors. Funded by the “system benefit charge” on electric bills and alternative compliance payments from retail electricity providers, CommerceRI supports projects in Small Scale solar, Commercial Scale, and Community Renewables. The program is suitable for commercial entities, local and state governments, nonprofits, residential areas, installers/contractors, multifamily and low-income residences, and integrators.

Rhode Island’s robust solar incentive programs underscore the state’s dedication to fostering a sustainable energy future. By taking advantage of these incentives, residents and businesses can significantly reduce their carbon footprint while benefiting from considerable economic savings. As the state continues to innovate in the renewable energy sector, staying informed about these incentives is crucial for anyone considering a transition to solar power.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.