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Rhode Island Solar Incentives, Tax Credits & Rebates (2024 Guide)

Default Author Icon Written by Tamara Jude Updated 04/17/2024

Rhode Island provides robust solar incentives, including attractive rebates and tax credits to help you reduce your solar installation costs. The Ocean State has also invested more than $1 billion in solar energy, and over 11% of the state’s electricity comes from solar power.

We’ve spent more than 300 hours researching the best solar companies and the industry at large to learn which states offer the best financial incentives for going solar. Read on to discover which programs are available to Rhode Islanders.

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Rhode Island residents benefit from local, state, and federal solar incentives. Here are its top solar programs:

Rhode Island Energy Renewable Energy Growth (REG) Program

One of the state’s most lucrative incentives is Rhode Island Energy’s Renewable Energy Growth (REG) program. Residential homeowners in this program receive 28.75 cents for each kilowatt-hour (kWh) of energy their solar panel system produces for the first 15 years. That’s far better than the state retail rate of 19 cents per kWh.

Rhode Island Energy will pay participating customers by crediting your electric bill. The company pays any remaining earnings in cash. Participating in this feed-in tariff program disqualifies you from other net metering programs. 

More resources:

Small-Scale Solar Grants

CommerceRI’s Renewable Energy Fund provides grants to those interested in going solar for the first time. New solar owners can get a per-watt grant through their installation company. Funds are awarded annually but are limited, so you’ll need to enroll as early as possible. You can confirm when a grant program begins accepting applications for the year on the CommerceRI website. 

More resources:

Tax Exemptions

Going solar is a big investment, and taxes only increase that burden. Fortunately, Rhode Island waives taxes associated with solar equipment and installation. That means you won’t have to pay the 7% state sales tax on your solar energy system. 

You’ll also be exempt from paying any extra property tax, even though solar panels increase your home value.

More resources:


What Is the Federal Solar Tax Credit?

The federal government’s solar investment tax credit (ITC) is available to all homeowners in Rhode Island. You can apply for this credit during tax season to lower or eliminate your federal taxes. The rate is currently set at 30% of your installation costs. Any remaining amount can roll over to the next tax period. 

You must own your system to qualify for this incentive. Those who enter into a solar lease or power purchase agreement (PPA) aren’t eligible.


Does Rhode Island Offer Net Metering?

Net metering enables solar users to send the surplus energy their systems generate back to the electrical grid. In return, they receive credits from their utility company that they can use to pay future electricity bills. Check with your local utility company to see if it offers a net metering program.


How Much Do Solar Panels Cost in Rhode Island?

The average cost of a solar panel system in Rhode Island is $15,215–$20,585, with the typical cost of $17,900 for a 5-kilowatt (kW) system.* These figures are before factoring in any solar incentives. The federal tax credit can cut nearly a third of this cost for those who qualify. 

*Prices according to EnergySage.


Is Going Solar in Rhode Island Worth It?

Yes, going solar in Rhode Island is worth it because of its many solar incentive programs. Electricity rates are rising nationally, so it’s an ideal time to switch to clean energy and lower your electric bills. EnergySage estimates that Rhode Islanders can save an average of $44,000 in electricity costs over 20 years with a solar system. Going solar also decreases your power grid dependency and helps the environment.


Our Conclusion

Rhode Island’s solar incentives can make your solar project more affordable and help you save on energy costs long-term. We recommend SunPower, Sunrun, or Palmetto Solar if you’re ready to make the switch. Each solar company has years of experience, high-efficiency solar panels, and positive customer reviews. You can read our guide to the best solar companies in Rhode Island for more information.

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FAQ About Solar Tax Incentives in Rhode Island

Does Rhode Island have a solar tax credit?

Yes, property owners in Rhode Island who own their solar power system qualify for the federal solar tax credit. This credit allows you to claim 30% of your system cost on your federal income taxes the year you install. 

Are solar panels free in Rhode Island?

No, solar panels aren’t free in Rhode Island. However, you can lower your investment by taking advantage of the state’s solar incentives. 

How much do solar panels cost in Rhode Island?

The average cost of a home solar panel system in Rhode Island ranges from $15,215–$20,585, with the typical cost of a 5-kilowatt system being around $17,900.

What are the best solar incentives in Rhode Island?

The most lucrative state-level Rhode Island solar incentives are its tax exemptions. Rhode Islanders don’t have to pay sales or property tax on solar panels. At the federal level, the solar investment tax credit allows you to claim 30% of your system cost on your federal income taxes the year you install. 


Our Rating Methodology

We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

  • Solar equipment, installation, and services (25%)
  • Warranty and performance guarantees (25%)
  • Brand reputation and certifications (15%)
  • Financing options (15%)
  • Experience (10%)
  • Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.

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