Rhode Island solar rebates and incentives: 2024 guide

The average Rhode Island solar shopper will save $4,922 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Casey McDevitt

    Solar panel systems in Rhode Island are expensive, but incentives from the state and federal governments can help you reduce the upfront cost. Between the federal tax credit and other state-specific incentives, you can save thousands on solar panels, making them well worth the investment. Here's how you can lower the cost of solar if you live in Rhode Island.

    See how much solar costs in Rhode Island

    As a Rhode Island homeowner, you have access to some great incentives that can substantially improve your return on investing in solar panels. The programs below are some of the most impactful ways to bring down your solar costs.

    Average savings in Rhode Island

    Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)


    Lowers your solar panel system's cost by 30%

    Renewable Energy Growth (REG) Program


    Compensates you for your solar generation for the first 15 years of generation

    Renewable Energy Fund (REF) Small Scale Solar Grants


    Grant offered to new solar installations

    Residential Clean Energy Credit

    The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax. 

    The average cost for a 5 kW solar panel system is around $16,408 in Rhode Island. Once you factor in the 30% credit, the cost comes down to $11,486.

    When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

    You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

    Renewable Energy Growth (REG) Program 

    The Renewable Energy Growth (REG) Program is a performance-based incentive or feed-in-tariff program that compensates solar owners for their system’s generation. Under the Small Scale REG Program, residential systems can earn 26.15 to 27.75 cents for each kilowatt-hour (kWh) their solar panel system generates for the first 15 to 20 years. As a feed-in-tariff program, solar panel system owners who participate do not have net metering and are paid primarily via bill credits. This is a first come, first serve incentive that tends to fill up quickly after the April 1 open date every year. 

    REF Small Scale Solar Grants 

    The Renewable Energy Fund (REF) of Rhode Island gives new solar owners a per-watt grant through their installation company. You can earn $0.65 per watt, up to $5,000, but the program's funds are limited and enrollment traditionally fills up quickly. You can check the next enrollment date on the CommerceRI website

    REG program participants are not eligible for a small scale solar grant.

    In addition to the great rebates and incentives above, Rhode Island also offers tax exemptions for solar panel systems. The solar sales tax exemption ensures that you won't have to pay a sales tax on your system, while the solar property tax exemption means you don't need to pay a higher property tax for adding solar panels to your house.

    Tax Exemption
    Rhode Island solar sales tax exemptionYou don't need to pay any sales tax on new solar panel systems in Rhode Island, saving at least 7% of your system costs.
    Rhode Island solar property tax exemptionIf you use solar energy as a source of power, you won't need to pay more for the value your solar panels add to your property.

    If you connect your solar panel system to the grid, you can benefit from net metering, one of the best solar panel incentives available in Rhode Island. With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

    Under Rhode Island’s net metering program, you’ll earn credits at the retail rate of electricity for each kWh of electricity your system produces up to 100% of your monthly utility electricity demand. If you send more electricity to the grid than you demand, you’ll be credited based on the avoided cost rate for your excess generation. Net excess generation credits are limited to 125% of your utility usage. 

    Learn more about these net metering programs:

    Rhode Island Energy Pascoag Utility District Block Island Power Company

    In addition to solar incentives, Rhode Island also offers some great battery incentive programs to bring down the price of energy storage. The Connected Solutions Program is a demand response program that compensates you for allowing RI Energy to access your battery during times of peak energy demand. From June through September, your battery may be called between 3:00 PM and 8:00 PM, but no more than 60 times per summer and for no longer than 3 hours per event. In exchange for your stored electricity, you’ll earn $400 per kW performed. 

    Rhode Island’s Small Scale Solar Grant program includes an energy storage adder, which is an additional credit you can earn for installing an energy storage system with your solar panels. The Energy Storage Adder can increase your credit amount by $2,000. Additionally, all batteries above 3 kWh are eligible for the 30% federal tax credit.

    Learn more about Rhode Island's battery incentives and rebates

    If you're looking for solar installers in Rhode Island, here are some popular suggestions:

    See the complete list of solar companies in Rhode Island

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