Solar Incentives in Rhode Island
What are the Incentives for Going Solar in Rhode Island?
- The state of Rhode Island has a couple of the most attractive incentives of any state in the union when it comes to going solar. Probably the biggest and best is the state’s REF or “Renewable Energy Fund” rebate program. This rebate, based on the size of the system installed, provides a maximum award of up to $75,000 for installation of a solar power system through the Commerce RI grant foundation, designed to help fund renewable energy projects of all kinds. The size of the rebate is determined by total contract price. More money is available with the addition of solar carports to your project.
US Solarworks handles rebate applications for the REF program. The customer receives their rebate once construction of their solar project is complete. Taking advantage of the REF state rebate program also makes you eligible to receive state net metering rebates for an even greater advantage in your solar power system.
- The “Renewable Energy Growth Program” on the other hand, is run through National Grid and offers a 20 year contract for the purchase of excess electricity produced by your system. The energy is purchased at a “premium price” which may be more than what you would get paid for it by your normal utility- which can add up nicely over the course of 20 years. The catch here is that if you contract with the REG program, you are not eligible to receive the REF rebate. For 2021, the PBI (performance based incentive) payment was between $.25 and $.29 cents per kilowatt hour (KwH). The PBI is split between a cash payment and a credit on your electric bill. Though that doesn’t sound like a lot, you have to understand that a regular 6 kw system will create about 10,000 KwH of electricity on an annual basis, which would equate to around a $2,500 worth of payments and credits every year for the term of your 20 year contract. Some quick math will show you how valuable this incentive really is. Naturally, Uncle Sam sees this as taxable income because of course. But either way, it’s free money.
- Rhode Island guarantees net metering for 100% of the power you generate and use on site. Net metering is the process by which a utility company measures the energy produced, used and fed back into the grid by any energy producing system, such as solar panels. Obviously, a big bonus to solar panels is the ability to “sell” energy back to your utility company, so strong net metering is a huge bonus for anyone producing energy with solar panels, as it ensures that your panels will not only cover your electric bill but possibly also give you credits that will carry over into future electric bills.
- Renewable Energy Certificates or RECs are a system by which anyone in Rhode Island who installs a solar energy system can accumulate credits based on how much energy your system generates. RECs are credits that count as the equivalent of one megawatt hour (MwH) of energy generated by your renewable energy system, such as solar panels. Solar production is monitored automatically through net metering equipment and reported to an REC broker who packages these megawatt hours into consolidated blocks to be sold. Then you will received quarterly cash payments for RECs produced by your system and fed back into the grid.
- The “Federal Solar Investment Tax Credit” offers a writeoff to your federal tax liability equivalent to 26% of the total price of your system and installation. Depending on how big of a system you install, this could equate to a saving of thousands of dollars in and of itself.
- The Rhode Island “Residential Solar Energy Property Tax Exemption” guarantees by law that your property tax liability cannot be reassessed based on the addition of solar panels to your home. In other words, your property taxes will not go up due to your solar panels, and they cannot by state law.
- Thanks to the “Renewable Energy Products, Sales and Use Tax Exemption”, Rhode Island residents do not have to pay any taxes on the purchase or installation of their solar energy system- Once again, a savings of possibly thousands of dollars, depending on the size of your system.
- Rhode Island’s weather lends itself quite well to solar power as well. They are right at the national average in terms of sunny days per calendar year (Rhode Island averages around 202 days of sun per year while the U.S. average is 205). Combined with that, Rhode Island’s monthly average temperatures rarely reach above 80 degrees, which is great for solar panels, as their ideal operating temperature is 78 degrees fahrenheit and below. For every degree temperatures rise above 78, solar panels are estimated to lose 1% efficiency, but in Rhode Island this will rarely if ever become a major issue.
- Solar Panels will, on average, increase a home’s value between $10,000 and $20,000. There are a lot of different metrics people use to estimate exactly how much you can expect a home’s value to increase due to the addition of solar panels, but ultimately the value of solar panels are in the eye of the potential home buyer- some will be willing to pay more for a home with them while some wont. One indisputable fact however is that homes with solar panels do tend to sell faster on average than homes without, however.
- Lifetime energy savings with a full solar power system can be as high as $50,000 or more, depending on your home energy consumption. So just ignore all the rebates, all the tax incentives, everything else, and ultimately your solar panels will more than pay for themselves over the course of their lifetime simply due to savings in electric bills- realistically, they’ll pay for themselves many times over.
So, as you can see, there are few states more ready for you to install solar panels than sunny little Rhode Island. It’s not the first state that pops into most people’s minds when they think of solar power, but the incentives and bonuses the state has in place for you are better than virtually any other. So by all means, if you’re a Rhode Island residence with the ability to take on a long term project like a solar panel installation, don’t hesitate to make it happen.