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The federal tax credit is gone for homeowners — but Rhode Island has the best solar incentive stack in all of New England. REG payments stack with net metering, the $7K REF rebate cuts upfront cost, and net metering is guaranteed through 2039. Here is the full picture with real data.
Important: The 30% federal solar tax credit (Section 25D) expired December 31, 2025.
Many websites still advertise this credit. Homeowners who buy solar with cash or a loan in 2026 receive $0 in federal tax credits. This guide reflects accurate 2026 incentives only. Learn what happened
Rhode Island has the best solar incentive stack in New England. Even without the federal tax credit, a typical 11.03kW system pays for itself in approximately 9.4 years on bill savings alone, and saves over $100,462 over 25 years. With the REG program's above-market payments stacking on top of net metering, the effective payback can be as short as 3-4 years. Net metering is guaranteed through 2039, the $7,000 REF rebate cuts your upfront cost, and electricity rates of $0.27/kWh rise 3-5% annually — making Rhode Island arguably the single best state for solar in the entire region.
Avg. System Cost
$32,097
11.03kW system
Payback Period
9.4 years
Cash (3-4 yrs with REG)
25-Year Savings
$100,462
Best in New England
Electricity Rate
$0.27/kWh
Rising 3-5%/year
The federal credit is gone, but Rhode Island has the strongest solar incentive stack in New England. Here is every program you can use in 2026, and one you cannot.
Above-market payments for 15 years
The Renewable Energy Growth (REG) program pays solar owners a fixed above-market rate per kWh for 15 years, locked at enrollment. This stacks ON TOP of net metering credits, making RI arguably the best state for solar in all of New England. Historical rates: $0.26-0.33/kWh for small residential.
$0.35/W upfront rebate (max $7,000)
The Renewable Energy Fund (REF) provides a $0.35 per watt upfront rebate, up to $7,000, applied at installation. On an 11kW system, this saves $3,857 (capped at $7,000). Directly reduces your out-of-pocket cost.
100% retail rate credit — guaranteed through 2039
Rhode Island credits exported solar at the full retail rate with NO non-bypassable charge (better than CT). 25kW residential cap, March annual true-up. Guaranteed by RI law through 2039 — 13+ more years of certainty.
7% saved (~$2,247)
Solar panel purchases are exempt from the 7% Rhode Island sales tax. On a $32,097 system, this saves approximately $2,247 in taxes you never have to pay.
Solar value exempt from property tax
Solar panels increase your home value by an average of 4%, but the added value is exempt from property tax in Rhode Island. This saves hundreds per year in perpetuity.
$0 — Expired Dec 31, 2025
Section 25D expired under the OBBBA (signed July 4, 2025). Homeowners who purchase solar with cash or a loan receive zero federal tax credit. Third-party owned systems (lease/PPA) still qualify for 30% under Section 48/48E.
Up to $8,000 for income-qualified
Rhode Island was the FIRST state in New England to launch the HEAR low-income pathway (September 17, 2024). Up to $8,000 for income-qualified households. Moderate-income pathway is under development. Funded through 2031 or until funds are exhausted.
Revenue for battery owners
Rhode Island Energy offers demand response programs for battery owners. Block Island Power offers a $2,000 battery incentive. Battery owners can earn additional revenue by discharging during peak demand events.
Key Insight for 2026
Lease and PPA options are more attractive in 2026 than ever before. Because the third-party system owner can still claim the 30% commercial ITC (Section 48/48E), they pass savings to you through lower monthly payments — effectively giving you access to a tax credit that homeowners can no longer claim directly. Compare lease vs. buy in 2026
Real pricing data from EnergySage marketplace and NuWatt installations. No inflated numbers, no hidden costs.
RI Average (EnergySage)
$2.91/watt
Before incentives, fully installed
NuWatt Pricing
$3.00/watt
Volume discounts for larger systems
Typical 11.03kW System
$32,097
Range: $26,100-$38,100
$25,097
($32,097 - $7,000 REF = $25,097)
The $7,000 REF rebate is applied at installation, reducing your out-of-pocket cost immediately. Sales tax exemption saves an additional ~$2,247.
Based on $2.91/W average. Prices before incentives.
| System Size | Panels (~400W) | Total Cost | After REF Rebate | Annual Production | Annual Savings |
|---|---|---|---|---|---|
| 5 kW | 13 | $14,550 | $12,800 | 5,110 kWh | $1,380 |
| 7 kW | 18 | $20,370 | $17,920 | 7,154 kWh | $1,932 |
| 9 kW | 23 | $26,190 | $23,040 | 9,198 kWh | $2,483 |
| 11 kWRI Average | 28 | $32,010 | $28,160 | 11,242 kWh | $3,035 |
| 13 kW | 33 | $37,830 | $33,280 | 13,286 kWh | $3,587 |
| 15 kW | 38 | $43,650 | $38,400 | 15,330 kWh | $4,139 |
| 20 kW | 50 | $58,200 | $51,200 | 20,440 kWh | $5,519 |
Annual savings based on $0.27/kWh retail rate. Production based on 4.2 peak sun hours/day. Actual production varies by roof orientation, shading, and panel efficiency. REG payments not included in savings column — they add substantial additional income.
The Renewable Energy Growth (REG) program is what makes Rhode Island the best state for solar in New England. It pays above-market rates for your solar generation — separate from and on top of net metering savings.
Get your system installed and interconnected with Rhode Island Energy.
Apply during an enrollment window. Your above-market rate is locked for 15 years.
Your panels generate electricity. Every kWh is metered and reported to REG.
Receive REG payments ($0.26-0.33/kWh historically) ON TOP of net metering credits, every month for 15 years.
| Feature | Details | Notes |
|---|---|---|
| Contract Term | 15 years | Fixed rate locked at enrollment for the full term |
| Historical Rates (Small Residential) | $0.26-0.33/kWh | Rate varies by enrollment period and system size class |
| Stacks with Net Metering | Yes | REG (generation) + net metering (exports) = two separate income streams |
| Combined Value (Early Years) | $0.50+/kWh equivalent | REG payment + net metering credit combined |
| Enrollment | Periodic windows | Availability may be limited; check current enrollment status |
| Effective Payback with REG | 3-4 years | vs. 9.4 years on bill savings alone |
Important: REG has periodic enrollment windows and rates vary by period. Not all systems will be able to enroll immediately. Contact us to check current REG availability and lock in your rate.
Here is what makes RI unique: REG pays you for every kWh your panels generate. Net metering credits you for every kWh you export. These are two separate income streams. A system generating 11,242 kWh/year at a $0.30/kWh REG rate earns ~$3,373/year in REG payments alone, plus ~$3,035/year in net metering bill savings. That is over $6,400/year in combined value, giving you a 3-4 year effective payback on a $25,097 net system cost (after REF). No other New England state offers anything comparable.
Rhode Island's utility landscape is simpler than most states. One investor-owned utility (Rhode Island Energy) serves the vast majority of residents, with two small municipal utilities covering limited areas.
Formerly National Grid RI (rebranded 2022). Serves ~98% of RI residents.
| Retail Rate | $0.27/kWh |
| Net Metering Credit | 100% retail rate — no non-bypassable charge |
| Residential Cap | 25 kW |
| Annual True-Up | March |
| Minimum Monthly Bill | $7.00/mo |
| Annual Savings (11kW system) | $2,970/year |
| Monthly Bill with Solar | $7/mo(down from $255/mo) |
| Net Metering Guarantee | Through 2039 (by RI law) |
Serves the Burrillville area. Offers net metering with a 25kW cap. Slightly lower rates than RI Energy. Contact Pascoag directly for current solar interconnection procedures.
Serves Block Island. Higher retail rate (~$0.35/kWh) makes solar even more valuable. Offers a $2,000 battery incentive — one of the best municipal battery programs in New England.
Advantage: Single utility simplicity. Unlike Massachusetts with three IOUs or Connecticut with two, Rhode Island's single IOU (Rhode Island Energy) means simpler interconnection, consistent net metering policies, and a single point of contact. No need to compare utility programs — everyone gets the same deal.
Rhode Island has one of the best net metering policies in the country — full retail rate credit, no non-bypassable charge, and guaranteed by law through 2039.
Your solar panels produce electricity during daylight hours. Typical RI system: 9,200-15,300 kWh/year based on 4.2 peak sun hours.
Your home uses solar power first. Any excess goes to the grid through your bidirectional smart meter.
Exported kWh earn a credit at 100% of the retail rate. No non-bypassable charge, unlike Connecticut. Credits roll over monthly.
Guaranteed Through 2039 by Law
Rhode Island law guarantees net metering through 2039. Solar owners have 13+ more years of certainty that their credits will not be reduced. No other NE state offers this level of protection.
No Non-Bypassable Charge
Unlike Connecticut, RI credits at the full retail rate with zero non-bypassable charges deducted. Every dollar of your export is a full dollar of credit.
March Annual True-Up
Excess credits roll over each month and are trued up in March. Any remaining excess at true-up is credited at wholesale rate (~$0.03/kWh). Size your system to match annual usage.
REG + Net Metering Stack
REG payments are based on total generation. Net metering credits are based on exports. You receive both — they are separate income streams that combine for $0.50+/kWh equivalent value.
With the federal ITC gone for homeowners, financing dynamics have shifted. Lease and PPA are more competitive because the third-party owner still captures the 30% commercial ITC. The $7,000 REF rebate helps cash and loan buyers too.
Maximum long-term savings
Monthly Cost
$0/mo after payback
Payback
9.4 years (without REG: faster with REG)
25-Year Savings
$100,462+
Federal ITC Access
No federal credit
Highest lifetime ROI
No interest payments
$7K REF rebate reduces upfront cost
$26,100-$38,100 upfront (before REF)
No federal credit in 2026
$0 down with ownership
Monthly Cost
$120-$200/mo
Payback
10-12 years (with loan payments)
25-Year Savings
$80,000+
Federal ITC Access
No federal credit
$0 down available
You own the system
$7K REF rebate reduces principal
Interest adds to total cost
No federal credit for homeowner loans
Guaranteed savings, no upfront cost
Monthly Cost
$80-$140/mo
Payback
Savings from month 1
25-Year Savings
$40,000-$60,000
Federal ITC Access
30% ITC claimed by lessor
$0 down
Maintenance included
Lower payment because lessor captures 30% ITC
Less total savings vs. ownership
Lease escalator (1-3%/yr)
Lowest possible rate lock
Monthly Cost
Pay per kWh generated
Payback
Savings from month 1
25-Year Savings
$35,000-$55,000
Federal ITC Access
30% ITC claimed by provider
$0 down
Pay only for power produced
Rate lower than utility
Least total savings
Long-term contract (20-25 years)
Adding a battery to your solar system provides backup power, enables demand response revenue, and maximizes self-consumption. Block Island Power customers get an extra $2,000 incentive.
Keep your lights on during outages. A typical 10kWh battery provides 8-12 hours of backup for essential loads (fridge, lights, internet, sump pump). Coastal RI is especially vulnerable to weather-related outages.
Rhode Island Energy offers demand response programs for battery owners. Earn additional revenue by discharging stored energy during peak demand events, typically summer afternoons.
Block Island Power offers a $2,000 battery incentive — one of the most generous municipal battery programs in New England. Combined with Block Island's higher electricity rate (~$0.35/kWh), batteries are especially valuable here.
Battery Cost
$8,500-$12,500
Lifetime: Upfront
Demand Response
$200-$800/yr
Lifetime: $4,000-$16,000
TOU Arbitrage
$150-$300/yr
Lifetime: $3,000-$6,000
Outage Protection
Priceless
Lifetime: Peace of mind
Battery storage costs $8,500-$12,500 installed. Demand response and TOU arbitrage revenue can offset a significant portion of the cost over 15-20 years. Battery value is highest for Block Island Power customers.
Year-by-year financial projection for a typical 11.03kW system in Rhode Island. Cash purchase, no federal credit, REF rebate applied. Showing both with and without REG payments.
Net cost after REF: $32,097 - $7,000 = $25,097
| Year | Bill Savings | REG Income | Cumulative (No REG) | Cumulative (With REG) | Status |
|---|---|---|---|---|---|
| Year 1 | $3,270 | $3,600 | $-21,827 | $-18,227 | Paying off |
| Year 3 | $3,610 | $3,600 | $-14,467 | $-4,500 | Paying off |
| Year 4REG Break-even | $3,790 | $3,600 | $-10,677 | +$2,890 | REG: Profit! |
| Year 5 | $3,980 | $3,600 | $-6,697 | +$10,370 | REG: Profit |
| Year 7No-REG Break-even | $4,390 | $3,600 | +$1,723 | +$26,200 | Profit |
| Year 10 | $5,080 | $3,600 | +$16,300 | +$44,800 | Profit |
| Year 15 | $6,490 | $3,600 | +$44,500 | +$68,500 | REG ends |
| Year 20 | $8,280 | --- | +$68,200 | +$88,000 | Free power |
| Year 25 | $10,570 | --- | +$100,462 | +$100,462 | Free power |
Assumptions: 11.03kW system at $2.91/W ($32,097), minus $7,000 REF = $25,097 net cost. $0.27/kWh starting rate with 5% annual increase. REG at ~$0.30/kWh for 15 years (rate varies by enrollment period). 0.5% annual panel degradation. No federal credit.
Beyond REG, REF, and net metering, Rhode Island provides two additional financial benefits for solar owners that reduce your total cost of ownership.
7% Saved (~$2,247)
Solar panel purchases are exempt from the 7% Rhode Island sales tax. On a $32,097 system, this saves approximately $2,247 in taxes that you never have to pay. Rhode Island's 7% sales tax rate is one of the highest in New England, making this exemption especially valuable.
Full Exemption
Solar panels increase your home value by approximately 4% (about $15,000-$25,000 for a median RI home). This added value is completely exempt from property tax in Rhode Island. This saves hundreds of dollars per year for the life of the system.
Rhode Island was the first state in New England to launch the HEAR (Home Efficiency and Appliance Rebates) low-income pathway on September 17, 2024. Income-qualified households can receive up to $8,000 in direct rebates for energy efficiency improvements including heat pumps. The moderate-income pathway is under development. HEAR is funded through 2031 or until funds are exhausted. These are direct rebates — not tax credits — so they are available regardless of your tax liability.
Answers to the most common questions about going solar in Rhode Island in 2026.
Absolutely. Rhode Island has the best solar incentive stack in all of New England. The REG program pays above-market rates per kWh for 15 years ON TOP of net metering credits. Combined with the $7,000 REF upfront rebate, 7% sales tax exemption, property tax exemption, and net metering guaranteed through 2039, a typical 11kW system saves over $100,462 over 25 years with a 9.4-year payback (without REG). With REG payments, the effective payback can be as short as 3-4 years.
The residential solar tax credit (Section 25D) expired on December 31, 2025, under the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025. Homeowners who purchase solar with cash or a loan in 2026 receive $0 in federal tax credits. However, third-party owned systems (lease or PPA) still qualify for 30% under the commercial ITC (Section 48/48E), because the financing company — not the homeowner — claims the credit.
Solar panels in Rhode Island cost an average of $2.91 per watt installed (EnergySage data). For a typical 11.03kW system, that is approximately $32,097 before incentives. After the $7,000 REF rebate, the net cost drops to approximately $25,097. The 7% sales tax exemption saves an additional $2,247, and the property tax exemption provides ongoing savings.
The Renewable Energy Growth (REG) program is Rhode Island's premier solar incentive. It pays solar owners a fixed above-market rate per kWh of generation for 15 years. The rate is locked at enrollment and has historically ranged from $0.26 to $0.33/kWh for small residential systems, depending on the enrollment period. REG payments are separate from and stack with net metering credits, meaning you can potentially earn $0.50+/kWh equivalent in the early years.
The Renewable Energy Fund (REF) provides an upfront rebate of $0.35 per watt for residential solar installations, up to a maximum of $7,000. On a typical 11kW system, this provides $3,857 in savings (the calculation is $0.35 x 11,030W = $3,861, but the max cap is $7,000). The rebate is applied at installation, directly reducing your out-of-pocket cost.
Yes, and this is the key to why Rhode Island is the best state for solar in New England. REG payments are based on total solar generation (every kWh your panels produce). Net metering credits are based on exported kWh (energy you send to the grid). These are two separate income streams that stack together. With REG paying $0.26-0.33/kWh and net metering crediting $0.27/kWh, your combined value per kWh can exceed $0.50 in the early years.
Yes. Rhode Island law guarantees net metering through 2039. This is a major differentiator from other New England states where net metering policies can change with little notice. RI solar owners have 13+ more years of certainty that their net metering credits will not be reduced or eliminated. Credits are at full retail rate with no non-bypassable charge (unlike Connecticut).
Yes. When you lease solar panels or sign a PPA, a third-party company owns the system and claims the 30% commercial ITC (Section 48/48E). This credit lowers their cost, which is passed to you as a lower monthly payment. You do not claim any federal credit yourself, but you benefit from it through reduced pricing. This makes lease and PPA options particularly attractive in 2026.
HEAR (Home Efficiency and Appliance Rebates) is a federal rebate program. Rhode Island was the FIRST state in New England to launch the HEAR low-income pathway on September 17, 2024. Income-qualified households can receive up to $8,000 in direct rebates. The moderate-income pathway is currently under development. HEAR is funded through 2031 or until funds are exhausted.
Rhode Island gets approximately 4.2 peak sun hours per day on average, which is excellent for solar production. The coastal climate actually benefits solar in several ways: ocean breezes keep panels cooler (panels are more efficient at lower temperatures), and the reflective quality of nearby water can slightly boost production. Modern panels are rated for salt air, high winds, and snow loads. Most panels are warrantied for 25-30 years with guaranteed output of 80-85% at end of life.
Yes to both. Solar installations are exempt from the 7% Rhode Island sales tax, saving approximately $2,247 on a typical system. Additionally, the added home value from solar panels is exempt from property tax. Together, these exemptions save thousands of dollars and improve your overall return on investment.
Cash purchase offers the highest lifetime ROI ($100,462+ over 25 years) with the $7,000 REF rebate reducing your upfront cost to approximately $25,097. Solar loans offer $0 down with ownership, and the REF rebate reduces your principal. Lease and PPA options are increasingly attractive because the third-party owner captures the 30% ITC, passing savings to you through lower monthly payments. For homeowners who want savings without upfront cost, lease or PPA is often the best 2026 option.
Rhode Island has the best solar incentive stack in New England. Get a personalized estimate based on your actual roof, utility, and usage. No commitment, no sales pressure — just data.
Or call us: 781-235-8180
Full explanation of the ITC expiration and what credits are still available.
Read moreState-by-state analysis of solar value without the federal tax credit.
Read moreCash, loan, lease, or PPA — which financing is best without the federal credit.
Read moreComplete guide to solar in MA: SMART program, net metering, cost data, and payback.
Read moreSolar incentives, net metering, and cost analysis for Connecticut homeowners.
Read moreNH solar incentives, net metering policy, and financing options compared.
Read moreRhode Island homeowners pairing solar with heat pumps see the biggest savings.
Clean Heat RI: 60% of cost (max $11,500) standard, 100% (max $18,000) income-eligible. Plus HEAR.
Read moreFull cost breakdown by system type, net cost after rebates, and financing options.
Read moreCompare operating costs: oil at $3.45/gal vs. heat pump at $0.28/kWh.
Read morePricing data: EnergySage Solar Marketplace (January 2026), NuWatt Energy internal installation data.
Utility rates: Rhode Island Energy (formerly National Grid RI) residential tariff schedule (2026).
Incentive data: Rhode Island Office of Energy Resources (OER), Rhode Island Public Utilities Commission (PUC), REG program filings, DSIRE database.
Federal tax credit status: One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. Section 25D expired December 31, 2025.
HEAR status: U.S. Department of Energy, Rhode Island OER (low-income pathway launched September 17, 2024).
Payback calculations assume 5% annual utility rate increase, 0.5% annual panel degradation, 4.2 peak sun hours (RI average). REG rate of ~$0.30/kWh used for illustration (actual rate varies by enrollment period).
Last updated: February 2026.