Rhode Island Solar Incentives Lower Cost of Solar Panels in Rhode Island

The program is called the Affordable Solar Access Pathways initiative, and it aims to tackle the problem at the source that low-income households have when it comes to purchasing solar panels.

These Rhode Island solar incentives make it possible to lower the cost of solar panels in Rhode Island, ad this guide explains how they work for residents in the state.

How Much Are Solar Panels in Rhode Island? (Solar Panel Cost Calculator Rhode Island)

How much are solar panels in Rhode Island is always the first question someone asks when it comes to installing a home PV system.

The answer really depends on how much you want to pay and what appliances you want to run from your system.

A typical household is characterized as having 3 bedrooms with 2 adults and 2.4 children with a square footage of 2,014 feet.

Your homestead may have 4 active kids, 5 bedrooms, and larger square footage.

The more people who live in the house, the more electricity is used. But that’s not the only determining factor that will affect the price of solar panels.

The cost of solar panels in Rhode Island will be affected not only by the number of people living in the house or even the appliances but how often they are used.

Between 17-21 solar panels is the national average of panels required for home installation, and in Rhode Island the prices range from $10,740 to $35,800, with the average price of $17,900 being the norm.

But let’s have a look at the difference between “average” households and see how appliances and how long they are used for will have an impact on how many solar panels you’ll need to keep them spinning, blowing, and heating in the small state of RI.¹

Appliances	3-Bed House Usage per Month	kWh Use per Month	5-Bed House Usage per Month	kWh Use per Month
Air Conditioner	200 hours	300 kWh	400 hours	600 kWh
Blender	2 hours	1 kWh	3 hours	1.5 kWh
Coffee Maker	4 hours	5 kWh	6 hours	7.5 kWh
Clothes Dryer	17 hours	85 kWh	35 hours	170 kWh
Trash Compactor	10 hours	4 kWh	30 hours	12 kWh

Appliances	3-Bed House Usage per Month	kWh Use per Month	5-Bed House Usage per Month	kWh Use per Month
Computers	75 hours	27 kWh	150 hours	55 kWh
Oven	8 hours	12 kWh	12 hours	20 kWh
Dishwasher	25 hours	30 kWh	50 hours	60 kWh
Freezer	720 hours	300 kWh	720 hours	400 kWh
Microwave	11 hours	15 kWh	30 hours	45 kWh

Appliances	3-Bed House Usage per Month	kWh Use per Month	5-Bed House Usage per Month	kWh Use per Month
Refrigerator	720 hours	250 kWh	720 hours	350 kWh
Televisions	200 hours	50 kWh	400 hours	100 kWh
Toaster	5 hours	5 kWh	15 hours	15 kWh
Vacuum Cleaner	10 hours	15 kWh	20 hours	30 kWh
Washing Machine	20 hours	10 kWh	40 hours	20 kWh
Total:		1,139 kWh per month		1,886 kWh per month

This chart shows an estimation of the kWh used per month, but that can fluctuate by season, location, and even the wattage of the appliances.

Some of the appliances, such as the washing machine, the freezer, and the fridge, will more than likely be larger for a bigger family so will use more kWh.

Studies across the nation have calculated that the “average” household will typically consume 900 kWh a month, 10,800 a year. Since no one family is exactly the same as another, with some occupants spending less time indoors than others, the kWh usage per month will vary.

To calculate how many solar panels would work for your household refer to your utility bill.²

The kWh you use on a monthly basis will be clearly displayed, and with the use of an online calculator, you can get an approximate quote for the quantity of panels and pricing.

Or you could use this simple formula based on a solar panel wattage of 5 kW. Divide the yearly kWh by 500 and then allow an extra 25% for weather fluctuations for the real-world onsite solar panel performances which are always less than factory readings.

• Low Usage States

670 kWh per month X 12 = 8,040 kWh per year

8,400 ÷ 500 = 16 panels

16 X 25% = 20 panels

• National Average

900 kWh per month X 12 = 10,800 kWh per year

10,800 ÷ 500 = 21 panels

21 X 25% = 26 panels

• 3-Bed House

1,139 kWh per month X 12 = 13,668 kWh per year

13,688 ÷ 500 = 27 panels

27 x 25% = 33 panels

• 5-Bed House

1,886 kWh per month X 12 = 22,632 kWh per year

22,632 ÷ 500 = 45 panels

45 x 25% = 56 panels

This formula will give you an idea but for a more accurate assessment call in the professionals. From years of experience in the industry, they can show which Rhode Island solar incentives will work better for you.

Related Reading: Size of Standard Solar Panel: Solar Sizing Calculator Finds How Many

Cost of Solar Panels in Rhode Island: Federal Solar Tax Credit and the Solar Panel Installation Cost Rhode Island

After the shock of discovering how much your solar project is going to cost you from your own calculations, the installer pays you a visit to properly survey your property for the installation.

After clambering up and down your roof, calculating angles and peak sun hours, and informing you about the additional hardware that’s going to be needed, as well as the extra soft costs for paperwork, the price jumps up by another $12,000.

So, instead of costing $30,000, your solar project now has a price tag of $42,000.

Your first question is why are solar panels so expensive, and after briefly explaining the lengthy manufacturing process over a cup of coffee, you are then made aware that there are solar rebates from the government in the form of federal energy credits.

Climate change has propelled governments around the world to look closely at their methods of energy generation and the impact it was having on the planet.

In an effort to escape from the burning of fossil fuels to keep the lights on, non-polluting alternative clean energy resources were examined and supported globally.³

How the Solar Investment Tax Credit (ITC) Works

The United States federal government decided decades ago to provide a massive federal solar tax credit to any tax-paying homeowner interested in purchasing a photovoltaic system and funded the program to the tune of billions of dollars called the Solar Investment Tax Credit.

It recently had a name change in 2022 to the Residential Clean Energy Credit, but many people still refer to it as the ITC (Investment Tax Credit).

The benefit of this program is that it delivers a 30% credit against the taxes owed to the government when a renewable energy source such as a solar system is installed on a property.

In real terms that would deliver a 30% discount from your solar quote of $42,000. So instead of the installation costing that amount, it would look like this:

$42,000 X 30% = $12,600

$42,000 – $12,600 = $29,400

There are restrictions and eligibility criteria that must be met but if you are the homeowner, even if it’s a houseboat, condo, or even a mobile home, and working and paying taxes, then qualifying is as straightforward as filling in Form 5695 when filing your taxes.¹⁴

The PV system cannot be rented or leased, however, and must be purchased either upfront or through a loan agreement in which you will be the owner at the conclusion of the financing term.

The credits can only be claimed once but don’t have to be claimed all at once. Not everyone has a tax bill of $12,600 a year.

For this reason, you are allowed to claim the solar tax credit over a 5-year period, deducting the taxes you owe every year from that amount until the books are balanced and it has all been claimed.

If, at the end of the 5 years, your taxes are still not enough to eliminate the last of the solar credit allowance, it will be lost to you.

In 2033, the Residential Clean Energy Credit will drop down to 26%.⁴ The following year it will be further reduced to 22%, and then it will stop in 2035.

Solar Programs in Rhode Island: Solar Incentives and Renewable Energy Consumption

The 30% saving under the Residential Clean Energy Credit bites a large chunk from the overall cost of a PV system across the United States.

Individual states are also contributing towards renewable energy projects, and Rhode Island has a few incentives which are extremely helpful to its residents.

The Rhode Island Renewable Energy Fund (REF) Grant and The Renewable Energy Growth Program (REG) are two of them, and it is an either/or situation with these two programs as both cannot be used for the same project.

Run by the Rhode Island Commerce Corporation, the remit of REF is to award grants to renewable energy projects that have the ability to produce power in a cleaner, more sustainable way. And that includes your house.

This program can help you to reduce the expense of your new PV system even further, with the actual size of the grant based on the scale of your installation.

The money awarded can range from $5,000 to $75,000 but will not directly end up in your bank account if you are eligible. This is how it works.

• Contracting an installer to complete the project is the first step.
• With all the details of your property and the PV system, the installer will present all the paperwork to the Rhode Island Commerce Corporation.
• This stage is a little time-consuming with a bit of back and forth between the department and the installer. The application is carefully reviewed before an Award Letter is sent back to the installer to fill in and return.
• Upon receipt, the grant amount is allocated to your job and a further document, the Grant Agreement, is signed by your installer.
• With this legally binding document, the installer is confident that the funds will be available after installation and re-adjusts the quote by discounting this amount from your contract.

If you assume that the grant awarded is for the minimum amount of $5,000, that would further drop the price from $29,400 to $24,400, giving a total saving of $17,600.

The Renewable Energy Growth Program may be more beneficial for you depending on your circumstances as it functions differently from the REF.⁵

It is run by Rhode Island Energy and works through an enrollment structure rather than an application process.

All participants do not receive any form of payment upfront like with the REF program, but instead, would be connected to the electrical grid and sell whatever energy is produced from their PV system back to the utility company.

Your installer will relieve you of the burden of filling in forms, marking diagrams, and signing document after document. The company will also ensure that your property is registered for the Distributed Generation (DG) system.

Once connected and the 20-year contract signed by you, you will receive regular payments for every kWh of energy transferred from your system into the grid.

Rhode Island Solar Tax Credit and Solar Rebates

Protecting the rise in taxes on a property that has been increased due to the installation of a PV system is a shrewd move by any state in the country.

If an exemption is not applied, it is in a sense penalizing the occupant for adopting an alternative energy source to fossil fuels that is aiding in the fight against climate damage.

Rhode Island’s property tax exclusion protects you from paying a higher rate of tax when your property is assessed after doing a home improvement job.

A new rooftop PV system increases a property’s value by about 4% nationally, a figure which can add thousands to the retail price of your home.

If that additional value were taxed every year, it could cost you $200 plus every year, easily over $5,000 over the lifetime of your solar system.

Although not saving you from initially being out of pocket, money not spent is money saved, so it should be calculated against your cost of solar panels in Rhode Island.

Rhode Island Solar: Lowers Cost of Solar Panels in Rhode Island

A Rhode Island solar incentive program that stops you from having to pay out more than you have to is the sales tax exclusion initiative.

It exempts you from having to pay an additional 7% on taxes when you purchase a new solar system.

It applies to the entire solar photovoltaic equipment including panels, inverters, solar batteries for energy storage,⁶ and the racking equipment, as well as the labor for the installation.

It would be based and applied for on your behalf for the entire quoted price of $42,000 and would save you from having to dip nearly $3,000 more into your savings.

Rhode Island Solar Rebate Through Net Metering (Rhode Island Solar Incentives)

Net metering, or simply NEM, is a regulation that permits power to flow back and forth via connections between a smart meter in your home and the electric grid. It credits you for the excess electricity you transfer that is generated by your solar array back to the grid.

This occurs when your panels absorb more than enough solar irradiation during the day that is not utilized by your household when it is converted into electricity.

Rather than store that extra energy within an expensive battery bank, you are given credits that you can draw on when needed from the national grid, solar Rhode Island credits then flow into the plus and minus columns.

This occurs constantly during the week, and every kWh is calculated by your smart meter and displayed on your monthly utility bill, where you can see how many kWh have been consumed and rolled over from the previous month.

This rollover continues up to 125% of the household usage then it becomes capped, and no more credits will be allocated.

The thing is, when you reach 100% you’ll be cruising on free energy anyway so it won’t really make a difference.

Again, your solar installer will submit all the documents required to enroll you in the NEM scheme.

But this Rhode Island solar incentive has even more, to offer in the form of virtual net metering.

Traditionally in most states, NEM is directly connected from one physical property where the solar array has been installed to the local grid, and all the kWh movements are recorded on a bidirectional meter.

The virtual NEM scheme in Rhode Island presents an opportunity for a lot of organizations such as state agencies, entire municipalities, public housing authorities, public and private schools, non-profit organizations, and even hospitals that cannot install a PV on or around their building for lack of roof space, lack of land, or lack of funds.

The advantage of this VNEM scheme is that it affords organizations in these scenarios to have access to the benefits of net metering without having an on-site solar installation.⁷

If you are interested in this method of net metering or just having access to solar power, subscribing to a community farm is the first step.

Commercial Solar Rhode Island: Solar Farms

Residential properties and commercial premises that either don’t qualify to have solar installed on their roofs or would prefer not to have their own solar panels, community solar is an appealing alternative to rooftop solar.

Also known as solar farms, they are generally tracts of open land that have hundreds if not thousands of arrays arranged in rows upon rows of solar panels angled to capture the maximum amount of sunlight throughout the day.

Sometimes they are located close to communities but can also be in incredibly remote locations which is not a hindrance to accessibility as long as connecting to the electricity grid is possible.

Any group of investors, entrepreneurs, or any type of organization or cooperative can form a community farm as long as all the licenses and permits have been granted by the local authority where it will be located.

Methods of participation in the program vary across states, from simple enrollment to purchasing a set amount of kWh a month, a pay-as-you-use system, or even a monthly subscription.

In either scenario, net metering is the method of distribution to homeowners and commercial premises alike and is a tactic some people follow in how to get solar panels for free, sort of.

Just like with on-site net metering, this off-site method connects a property to the solar array through the grid by the use of a smart meter to record all the kWh movements.

Where the Rhode Island system differs from other solar farms is the virtual element of the agreement.

VNEM is available to any person who owns a portion of a Rhode Island community solar array and the credits are allocated on the percentage share you hold in the enterprise.

Remember that a solar farm doesn’t have to be enormous, it can be a simple set-up on local land with just 200 panels, for example, generating just enough power for 40 homes.

If you own 10% of a Rhode Island solar farm then 10% of the electricity produced will be allocated to your property, where your smart meter will work its magic.⁸

Whatever kWh that you have been allocated remains unused will then be sent back to the grid, and you will be credited for them.

All of the movements can be tracked on your utility bills so you will know exactly how much kWh your premises are consuming, whether you are residential or commercial, and how much you are saving from your investment in the community solar farm.

Some of the larger utility-scale solar farms also have local shareholders, and if you have stock in one of the enormous installations, VNEM will be very beneficial to the bottom line of your electricity bill where the amount to be paid normally is.

There are companies that are dedicated to mounting Rhode Island solar farms for those who are looking for a sustainable method of energy that will not leave them out of pocket and start generating not only electricity from day one but a renewable income from VNEM.

Many farmers across the state who have unused acres of land are turning to this method of supplementing their income, some leasing their land to a third party, others funding the project themselves with the assistance of some of the Rhode Island solar incentives.

The advantages to either partnering, investing, or even owning an off-site community solar farm are numerous. Supplying electricity for an entire town or neighborhood is one of them; having lower energy bills is another.

Cost of Solar Panels in Rhode Island: Affordable Solar Access Pathways (ASAP)

On December 29, 2022, the Rhode Island Office of Energy Resources and the Rhode Island Commerce Corporation’s Renewable Energy Fund issued a Request for Proposals to find a private sector partner who will install solar arrays on low-medium-income single-family houses.

A new initiative called the Affordable Solar Access Pathways (ASAP) program was launched at the beginning of 2023 to lower electricity bills through rooftop PV systems for LMIs.

In Rhode Island, a low-income household is categorized as one where the median income is approximately $65,460 for a couple with two children or $44,512 for a property with two residents.

The cost of solar panels in Rhode Island still remains a barrier to entry for many households despite the slew of Rhode Island solar incentives available to apply for or subscribe to.

The formation of ASAP, which is run by the Commerce Corporation, is designed to tilt the face of solar panels in your favor, collaborating with solar companies so they can purchase the PV systems and either lease or sign Power Purchase Agreement (PPA) with qualifying applicants.

ASAP opens the door to solar and it does so with no deposit requirements and no out-of-pocket expenses. If you’ve ever wanted to have a clean solar energy source attached to your roof and feed carbon-free electricity into your house, then this is the program for you.⁹

Your property must be located in what is described as an environmental justice area, and the program will function under the net-metering system.

What makes this program achievable for you now are recent adjustments to the Inflation Reduction Act. This amendment approved a higher tax credit for the solar companies chosen to work with an organization like ASAP to help disadvantaged communities.

Essentially, the solar company that is selected as the state’s partner will receive upfront incentives and marketing support from REF and OER, with the added benefit of establishing itself as a dependable partner of the government in Rhode Island.

All of this is a major boost to the image of any company and acts as an endorsement of their quality and dependability.

Under this new mechanism, the participating solar installer will get a higher tax break to make it worth their while to purchase a complete PV system with the intention of leasing it to a low-income household.

This is a no-downpayment third-party ownership program solely targeted at helping LMI households, and it will be the first state solar RFP released in the country under the new tax system created by the Inflation Reduction Act (IRA).

As a qualifying applicant, you will benefit through the net-metering system automatically set up in your home. All the paperwork will be completed, and all smart meters fitted, so nothing has to be done from your side for you to start receiving cheaper electricity bills from day one.

The solar company will also be over the moon, first for having the sale of a PV system and then benefiting from a passive income through the NEM program. Win-win.

Rhode Island Daily Peak Sun Hours

After laying on thousands of rooftops across Rhode Island, those thousands of solar panels have passed their best days of soaking up the maximum amount of sunlight the sun is radiating on a daily basis.

They are, to put it mildly, a pale imitation of what they once were, and many of them are ready to be put out to pasture, to degrade in a shady corner where they are shrouded in energy-blocking dark clouds all day.¹⁰

Where they were once hailed as a clean energy solution they are now becoming a problem, one that has been ignored for far too long time.

In turning a blind eye towards shiny new replacements and in not anticipating and instigating an infrastructure to deal with this potential problem, an environmental catastrophe is looming large in landfills in every dark corner in every state.

Carbon Footprint Solar Panels

The danger lies in the leakage of metals such as lead which can seep into the soil from broken modules and slowly spread out of sight underground, causing unseen damage to the local ecosystem.

At the current rate of solar panels being discarded, it has been estimated that over 10 million modules will be dumped in landfills across the country by 2050 if no preventative measures are taken.

It’s a shame because nearly all the parts and components of a solar panel can be reused in some form. The barrier to repurposing all these interior, valuable, hard-to-reach components boils down to cost.

It is far easier to hurl unwanted modules onto the scrap heap than collect, transfer, and attempt to manually extract the materials that are so integrated into the units that it becomes unprofitable and impractical even to try and remove them.

In 2021, realizing that technology had improved to such a degree that the solar modules could be dismantled quickly and cheaply, a new legislation was passed by the Senate, Bill H5525, that mandated companies that make solar panels to recycle their products when they stop providing energy.

The environmental community has advocated for this idea of producer responsibility for items that are difficult to dispose of, like mattresses, paint cans, light bulbs, and solar panels.

Manufacturers, some of whom are already recycling old solar panels, are not enamored of the bill as they fear that it will affect smaller companies who cannot afford to contribute towards the program.

Drop-off stations are being constructed in each of the state’s five counties to process, dismantle, and recover at least 85% of the dangerous components from the modules to avoid further landfill build-up.

The Department of Environmental Management (DEM) is in charge of monitoring the recycling program,¹¹ ensuring that all solar panel companies are signed up. Those that are not and continue to do business as usual would be subject to fines of up to $10,000 for every infraction.

But even so, old solar arrays do not necessarily have to be broken down and dismantled down to their smallest component. There can be a second chapter for these near-end-of-life panels as they can still be useful in certain circumstances.

They can be cleaned up, revised, any defective parts replaced and tests conducted to determine to what level the output has declined to.

After 20-30 years of continuous use, the electrical output would have dropped to about 70%. Not sufficient for a household perhaps, but if overhauled and any defunct components replaced, they could still be used for houseboats, camper vans, mobile homes, and garden sheds.

There are companies in Coventry and Pawtucket that are diversifying into this secondary market, not just taking advantage of the extra profits to be made by selling repurposed solar panels but helping the environment at the same time by reducing the carbon footprint solar panels produce by keeping them out of landfills.

How Does the Solar Tax Credit Work if I Don’t Owe Taxes?

The 30% saving from the Solar Tax Credit available for installing a PV system has helped millions of Americans to support or completely change the way their homes receive electrical energy.

Yet even though it is available to everyone if you don’t pay taxes, are on a fixed income, or don’t have any tax liabilities, you will be ineligible to claim it.

The idea behind this incentive is to lower the amount of taxes that you have to pay.

The next question is how does the solar tax credit work if i don’t owe taxes? If you do not owe any taxes, then your liability is zero, and the government has zero to work with.

That is not to say that being able to take advantage of solar technology is beyond your grasp, it simply means that a different approach has to be used.

There are other Rhode Island solar incentives in the form of cheaper loan agreements, leasing options, and solar farms that are just as easy to sign up for and just as effective at knocking down the price of your utility bill.

Just because you don’t owe thousands of dollars a year on your taxes doesn’t mean you still can’t save thousands of dollars from solar power.¹²

Are Solar Panels Worth It in Rhode Island?

Rhode Island is punching above its weight in terms of solar installations in the state.

The surface area is the smallest out of all the other states and only has a population of about 1.2 million, making it the 7th least populous.

Despite its size, the small state has huge aspirations for renewable energy sources, incentivizing its inhabitants to go fully solar by 2033 to enable the state to break away from fossil fuels and use a clean energy source to generate their electricity cheaper.

The peak sun hours Rhode Island experiences each day is 4.23 which, although not spectacular compared to 8 hours in Arizona, is sufficient enough to make solar arrays energy proficient for the state.

With an average payback period of just 8 years instead of the national average of 12, money invested in a PV system in Rhode Island is recouped relatively quickly in comparison to the rest of the country.

When that happens, the electricity being fed into your home is free, and expensive utility bills that are eating into your salary will be a thing of the past.

Now who doesn’t want that?

For the state, it is an ambitious goal to reach by 2033 considering that the reliance on natural gas accounted for 87% of its energy generation in 2021; renewable sources have only made small headways into changing minds and old habits so far.

There is still a long way to go in assisting homeowners and commercial enterprises in achieving this objective, but with the right will and cooperation, the target could possibly be achieved sooner than expected.

What is making this lofty goal more attainable and attractive for the residents to fully adopt solar power as their number one energy provider are the generous Rhode Island solar incentives which lower cost of solar panels in Rhode Island.

Frequently Asked Questions About Rhode Island Solar Incentives