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The federal residential tax credit is gone, but Rhode Island has the strongest state-level solar incentive stack in the Northeast. REG payments, REF rebates, tax exemptions, and ConnectedSolutions combine to make RI solar a powerhouse investment.
$0.27/kWh
REG Payment
$0.65/W
REF Rebate
$0.29/kWh
Avg Electric Rate
4-5 yrs
Payback w/ REG
Rhode Island homeowners no longer receive a federal solar tax credit (Section 25D expired Dec 31, 2025). However, RI offers the strongest state incentive stack in the Northeast: REG payments of $0.27/kWh guaranteed for 15-20 years, REF rebate of $0.65/W (up to $5,000 + $2,000 battery adder), 80% retail net metering, 7% sales tax exemption (~$1,736 saved on 8 kW), 20-year property tax exemption, and ConnectedSolutions at $225/kW for batteries. For a typical 8 kW system at $3.10/W ($24,800), these incentives can deliver payback in as little as 4-5 years with REG enrollment.
A quick visual overview of every Rhode Island solar incentive — what is active, what has a deadline, and what is gone.
$0.27/kWh
Renewable Energy Growth program pays per kWh produced for 15-20 years. April 1 annual enrollment. The strongest production incentive in the Northeast.
~$3,275/yr for 8 kW
$0.65/W
Renewable Energy Fund rebate via Commerce RI. $0.65/W capped at $5,000 for solar, plus $2,000 adder for battery storage.
Up to $5,000 + $2K battery
~$0.23/kWh
80% of retail rate for excess solar (post-April 2023). Grandfathered systems keep 1:1. 125% annual production cap.
~$2,230/yr excess credits
7% saved
Solar equipment, labor, and batteries are 100% exempt from RI 7% sales tax. Automatic at point of sale.
~$1,736 on an 8 kW system
100% exempt
Solar value is excluded from property tax assessment for 20 years. Your panels do not increase your property taxes.
~$584/yr for 20 years
$225/kW
Rhode Island Energy summer demand response program. Battery dispatches during peak events for cash payments.
~$1,125/yr for 5 kW battery
30%+ ITC
Third-party system owners (lease/PPA companies) claim 30% commercial ITC on your system.
Lower PPA/lease rate
$0
Expired December 31, 2025. No federal credit for homeowner cash or loan purchases.
The expiration of the federal residential solar tax credit (Section 25D) on December 31, 2025 removed 30% of the cost offset for homeowner-owned systems nationwide. On a $24,800 system, that is $7,440 gone.
But here is what makes Rhode Island different from every other state: RI has layered state incentives that more than compensate for the lost federal credit. The REG program alone pays $0.27/kWh for 15-20 years — that is approximately $2,620/year on an 8 kW system, or $39,300-$52,400 over the contract term. No other state in the Northeast offers a production incentive this generous.
Stack REG on top of the REF rebate ($5,000), net metering savings ($2,230/yr), sales tax exemption ($1,736), property tax exemption ($584/yr for 20 years), and ConnectedSolutions battery payments ($1,125/yr), and you have an incentive package that makes RI one of the best states in the nation for solar — even without any federal help.
Any solar company telling you the "30% federal tax credit is still available" for homeowner-owned systems is either uninformed or deliberately misleading you. Section 25D expired on December 31, 2025. If a solar salesperson claims otherwise, walk away.
Exception: Section 48/48E commercial credits are still available for third-party system owners (solar lease and PPA companies) on projects beginning construction before July 4, 2026. The homeowner does not claim this credit directly — the financing company does, and passes savings through as a lower rate.
The Renewable Energy Growth program is the crown jewel. You get paid for every kWh your system produces — regardless of whether you use it or export it. On an 8 kW system, that is ~$2,620/year guaranteed.
The Renewable Energy Fund provides a direct rebate of $0.65/W (capped at $5,000) plus a $2,000 battery adder. This is cash off your project cost, applied at purchase. No tax filing needed.
RI exempts solar from both sales tax (7%, saving ~$1,736) and property tax (20 years, saving ~$584/yr). Combined with REG + REF, your effective out-of-pocket cost drops dramatically.
The REG program opens for new enrollment each year on April 1. Capacity is allocated annually and popular classes fill quickly. Have your system designed, permitted, and ready to apply before the window opens.
The Renewable Energy Growth (REG) program is the single most valuable solar incentive in the Northeast. Created by the Affordable Clean Energy Security Act, REG pays solar system owners a fixed rate per kilowatt-hour produced for 15-20 years — regardless of whether you consume the power or export it to the grid.
$0.27
Per kWh payment
15-20
Year contract term
April 1
Annual enrollment
~$2,620
Annual income (8 kW)
The REG program roughly doubles the financial return of solar in Rhode Island:
| Metric | With REG | Without REG |
|---|---|---|
| System Size | 8 kW | 8 kW |
| Annual Production | 9,704 kWh | 9,704 kWh |
| REG Payment/yr | ~$2,620 | $0 |
| Net Metering Savings/yr | ~$2,230 | ~$2,230 |
| Total Annual Value | ~$4,850 | ~$2,230 |
| Simple Payback | ~4-5 years | ~10-11 years |
| 25-Year Value | ~$95,000+ | ~$55,750 |
REG Payment Example
8 kW system producing ~9,704 kWh/year. REG payment: 9,704 x $0.27 = ~$2,620/year. Over a 20-year REG contract, that is ~$52,400 in guaranteed income — more than double the cost of the system itself. This payment is independent of net metering — you receive it whether you consume or export the electricity.
The Renewable Energy Fund (REF), administered by Commerce RI, provides upfront rebates for residential solar installations. At $0.65 per watt with a $5,000 cap, plus a $2,000 battery storage adder, the REF is a direct reduction in your project cost.
$0.65/watt
Capped at $5,000 maximum
8 kW system: 8,000W x $0.65 = $5,200, capped at $5,000. Applied as a direct cost reduction.
$2,000 flat
When installed with solar
Add battery storage with solar and receive an additional $2,000 rebate. Total REF: up to $7,000.
Rhode Island transitioned from 1:1 retail net metering to an 80% retail rate for new systems installed after April 2023. While not as generous as full retail, RI net metering still provides meaningful savings — especially when stacked with REG payments.
$0.29/kWh
Retail rate (~95% of RI)
NM credit: ~$0.23/kWh (80%). 8 kW system saves ~$2,230/yr.
$0.26/kWh
Burrillville area
Municipal utility with competitive rates. Slightly lower NM value.
$0.35/kWh
Block Island only
Highest rate in RI. Solar payback is fastest here.
Rhode Island exempts solar energy systems from the state's 7% sales tax. This applies to solar panels, inverters, racking, wiring, installation labor, and battery storage systems. The exemption is automatic — no paperwork needed.
8 kW system at $3.10/W = $24,800. Without the exemption:
$24,800 x 7% = $1,736 in sales tax
With the exemption, you pay $0.
Exemption is automatic at point of sale. RI 7% rate is higher than CT (6.35%), making the savings proportionally larger.
Rhode Island exempts solar energy systems from local property tax assessments for 20 years. Your solar panels will not increase your property taxes during that period, even though they typically increase your home's market value by $10,000-$20,000.
National research shows solar panels add approximately $10,000-$20,000 to home resale value. In RI, where the REG program provides guaranteed income, the premium can be even higher because the REG contract transfers with the home. Without the exemption, that added value would be taxed.
At RI's average property tax rate, a $15,000 value increase would cost approximately $584/year in additional property taxes. Over the 20-year exemption period, you save approximately $11,680+.
Calculation: $15,000 assessed value x ~3.89% avg rate = ~$584/yr x 20 years = ~$11,680
Rhode Island Energy's ConnectedSolutions program pays battery owners to discharge their batteries during peak summer demand events. This is passive income — once enrolled, your battery automatically participates.
$225/kW
Summer DR payment
~$1,125/yr
For 5 kW battery
~30-50
Events per summer
With solar + battery + ConnectedSolutions, RI homeowners can stack multiple income streams:
While homeowners can no longer claim a federal tax credit on purchased solar systems, there is a narrow window where leases and PPAs retain a federal advantage.
Deadline: July 4, 2026 — Projects must begin construction before this date
After July 4, 2026, the Section 48/48E commercial ITC will no longer be available for new residential solar projects. Lease/PPA prices will likely increase.
In Rhode Island, leasing is generally less attractive than buying because you forfeit:
Adjust system size, utility, and battery to see exactly how much Rhode Island solar incentives are worth for your home. All calculations use verified 2026 program rates.
Adjust your system below to see how Rhode Island incentives stack
How will your solar be compensated?
REG opens annually in April. Enrollment is competitive with capacity limits.
First-Year Value
$4,731
REG + tax savings
25-Year Lifetime
$78,324
on a $24,480 system
Payback Period
5.9 years
then pure savings
Estimates based on RI averages. Actual values depend on system design, shading, utility rate changes, and eligibility. REG rate locked at enrollment for 15 years. REG and net metering do not run simultaneously — REG replaces net metering during its term. Federal residential ITC (Section 25D) expired Dec 31, 2025. ConnectedSolutions available only through RI Energy.
Transparency matters. Here are the solar programs and incentives that Rhode Island does not currently offer. If a solar company tells you otherwise, that is a red flag.
Section 25D expired December 31, 2025. Homeowners who buy with cash or loan get $0 in federal credits.
Post-April 2023 systems receive 80% of retail rate, not full 1:1. Only grandfathered systems keep the old rate.
RI does not offer a state income tax credit for solar. Your savings come from REG, REF, and tax exemptions — not income tax deductions.
Section 25C (heat pumps, insulation) also expired December 31, 2025. No federal energy efficiency credit available.
Even without the federal ITC and with reduced net metering, Rhode Island's incentive stack is arguably the strongest in the country. The REG program alone ($0.27/kWh for 15-20 years) provides more value than the old 30% federal credit on most systems. When you add the REF rebate, tax exemptions, and ConnectedSolutions, RI homeowners can achieve payback in 4-5 years with REG enrollment — faster than nearly any other state.
Rhode Island's REG + REF stack is unmatched in the Northeast.
| State | Avg Rate | Sales Tax | Property Tax | Net Metering | Special Program | Payback |
|---|---|---|---|---|---|---|
| Rhode Island | $0.29 | 100% exempt (7%) | 100% exempt (20yr) | 80% retail | REG $0.27/kWh + REF $0.65/W | 13-15 years |
| Connecticut | $0.27-$0.28 | 100% exempt (6.35%) | 100% exempt (15yr) | Full retail | Smart-E 6.99-7.99% | 8-10 years |
| Massachusetts | $0.28-$0.32 | 100% exempt | 100% exempt | ~60% NEM 3.0 | SMART $0.03/kWh | 12-14 years |
| New Hampshire | $0.27 | No sales tax | Local option (~66%) | ~85% retail (NEM 2.0) | None (SB 303 repealed) | 9-10 years |
Rhode Island has built one of the most comprehensive solar incentive frameworks in the country.
Renewable Energy Growth (REG) program created by the Affordable Clean Energy Security Act
Commerce RI launches Renewable Energy Fund (REF) rebate at $0.85/W
REG rates stabilize around $0.26-$0.28/kWh. RI solar capacity passes 100 MW.
ConnectedSolutions battery demand response launches in RI
Net metering reduced from 1:1 to 80% retail rate for new systems (April 2023)
REF rebate adjusted to $0.65/W. $2,000 battery adder introduced.
Federal residential ITC (Section 25D) expires December 31.
RI relies on REG + REF + tax exemptions. REG enrollment opens April 1. Section 48 deadline July 4.
Common questions about Rhode Island solar incentives in 2026.
No. The federal residential solar tax credit (Section 25D) expired on December 31, 2025. Rhode Island homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. However, if you go solar through a lease or PPA, the third-party system owner may still claim Section 48/48E credits through July 4, 2026, which can translate to lower pricing for you.
The Renewable Energy Growth (REG) program pays Rhode Island solar owners $0.27/kWh for every kilowatt-hour their system produces, guaranteed for 15-20 years. For a typical 8 kW system producing ~9,704 kWh/year, that is approximately $2,620/year in REG payments alone. This is ON TOP of net metering savings. Enrollment opens April 1 each year through Rhode Island Energy.
The Renewable Energy Fund (REF) rebate, administered by Commerce RI, provides $0.65 per watt for residential solar, capped at $5,000. An 8 kW system qualifies for the full $5,000 (8,000W x $0.65 = $5,200, capped at $5K). There is also a $2,000 battery storage adder. Apply through Commerce RI before installation. Funds are allocated annually and can run out.
Systems installed after April 2023 receive credits at 80% of the retail electricity rate for excess solar sent to the grid. At Rhode Island Energy's $0.29/kWh rate, that is approximately $0.23/kWh in credits. Systems installed before April 2023 are grandfathered at the full 1:1 retail rate. There is a 125% annual production cap — your system cannot produce more than 125% of your annual consumption.
Yes. The REG program and net metering work together. REG pays you $0.27/kWh for production regardless of whether you consume the power or export it. Net metering credits offset your electricity bill when you export excess power to the grid. The combination of REG + net metering is what makes RI solar economics among the strongest in the country despite the loss of the federal ITC.
The average cost of solar in Rhode Island is approximately $3.10 per watt before incentives. A typical 8 kW system costs about $24,800. After the REF rebate ($5,000), the effective cost drops to ~$19,800. Factor in the 7% sales tax exemption (~$1,736 saved) and you are looking at an effective investment of about $18,064. With REG payments ($2,620/yr) plus net metering savings, payback is 4-5 years.
Rhode Island offers two key tax exemptions for solar. First, solar equipment, labor, and batteries are 100% exempt from the state 7% sales tax — saving approximately $1,736 on an 8 kW system. Second, solar installations are exempt from property tax assessment for 20 years, saving approximately $584/year. Neither exemption requires additional paperwork from the homeowner.
ConnectedSolutions is Rhode Island Energy's summer demand response program for battery storage. If you have a home battery (like Tesla Powerwall), you enroll your battery to discharge during peak summer events. Rhode Island Energy pays $225 per kW of battery capacity per summer season. A 5 kW battery earns approximately $1,125/year. This is passive income — you do not need to do anything once enrolled.
In Rhode Island, buying is strongly favored over leasing because you keep the REG payments ($0.27/kWh for 15-20 years), the REF rebate ($5,000), and the property tax exemption. A lease or PPA may offer $0 down because the third-party owner claims Section 48 credits (30%) through July 4, 2026, but you would forfeit the REG income and REF rebate. For most RI homeowners, buying maximizes lifetime value.
The REG program opens for new enrollment on April 1 each year. Capacity is allocated annually, and popular enrollment classes can fill quickly. If you are planning to go solar in Rhode Island, having your system design and permits ready before April 1 gives you the best chance of securing a REG contract. NuWatt can help you prepare your application in advance.
RI Energy Hub
All RI solar & heat pump guides
RI Solar Cost 2026
Pricing breakdown by city
Solar Without the ITC
Is it still worth it in RI?
RI Net Metering Guide
How credits work in 2026
REG Program Guide
$0.27/kWh for 15-20 years
REF Rebate Guide
$0.65/W up to $5,000
RI Solar Tax Exemptions
Sales & property tax details
Buy vs Lease vs PPA
Best financing for RI
ConnectedSolutions
$225/kW battery program
RI Community Solar
Options for renters & condos
RI Commercial Solar
Business solar incentives
Solar + Heat Pump RI
Electrify everything stack
Providence Solar Cost
Capital city pricing
Newport Solar Cost
Coastal city pricing
Warwick Solar Cost
RI's second city pricing
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REG enrollment opens April 1. Section 48 lease/PPA deadline: July 4, 2026.