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Section 25D is dead — homeowners get $0 in federal tax credits for solar in 2026. But with a lease or PPA, a third-party owner claims the 30% ITC under Section 48/48E. At RI's $0.29/kWh rates — the highest in New England — plus the REG program ($0.27/kWh for 15–20 years) and REF rebate ($0.65/W), Rhode Island has among the strongest TPO economics in the country.
$0.29/kWh
RI Avg Rate
$110–170/mo
Lease Range
$0.11–0.17/kWh
PPA Range
Jul 4, 2026
48/48E Deadline
What RI homeowners need to know in 60 seconds
Section 25D is dead. If you buy solar with cash or a loan in 2026, you receive $0 from the IRS. The residential solar tax credit expired December 31, 2025 and is not coming back.
But Section 48/48E is alive. When a third-party financing company owns the solar system on your roof via a lease or PPA, that company claims the 30% Investment Tax Credit. The savings flow to you as lower monthly payments — typically $110–170/mo for a lease or $0.11–0.17/kWh for a PPA.
RI has the strongest incentive stacking in New England. At $0.29/kWh (the highest in the region), plus the REG program paying $0.27/kWh for 15–20 years, plus the REF rebate at $0.65/W (max $5,000), plus a 20-year property tax exemption and 7% sales tax exemption — Rhode Island TPO economics are among the best nationally. The trade-off: post-April 2023 net metering is 80% of retail, not full 1:1.
The financing company claims the credit — not you, not the installer. Here is exactly how the 30% ITC flows from the tax code to your lower monthly payment.
A financing company (the "third-party owner") purchases and installs solar panels on your roof. You don't buy the system — you agree to either lease it (fixed monthly payment) or buy the power it produces (PPA, per-kWh rate).
Because the financing company legally owns the system, it files IRS Form 3468 and claims the 30% Investment Tax Credit under Section 48/48E. On a $30,000 system, that's $9,000 back from the IRS. The company also claims MACRS depreciation (5-year accelerated schedule + 20% bonus in 2026).
The financing company doesn't pocket the ITC — it uses the $9,000+ in tax benefits to reduce your monthly payment. This is why lease/PPA payments are typically 20–40% lower than what you'd pay on a standard solar loan without the ITC.
Your lease/PPA payment is locked in below your current electric bill rate. You save money starting month one. The system owner handles all maintenance, monitoring, and warranty claims.
With NuWatt's Propel program, the third-party owner transfers full ownership to you at year 5 — after the ITC recapture period expires. You get the best of both worlds: ITC savings upfront, full ownership long-term.
Note: Propel is NOT currently available in Rhode Island. Standard leases and PPAs are available today from Sunrun, Tesla, SunPower, and other providers.
The financing company claims the ITC on IRS Form 3468 — not you, not the installer. In Rhode Island, the TPO company also typically claims REG payments and may claim the REF rebate — all of which are factored into your lower monthly lease/PPA rate. The combination of ITC + REG + REF gives RI TPO providers more revenue streams, resulting in some of the most competitive lease/PPA rates in the country.
The investment tax credit that keeps solar leases and PPAs financially viable in 2026.
Credit Rate
30%
With prevailing wage + apprenticeship compliance (6% without)
Who Claims It
The system owner (financing company)
NOT the homeowner, NOT the installer
Residential Eligibility
Yes — via third-party ownership
TPO company owns the system, leases/PPAs it to you
Construction Deadline
Begin construction before July 4, 2026
OBBBA sunset — projects must start before this date
Minimum Hold Period
5 years
System owner must hold for 5 years or face ITC recapture
Stackable Bonuses
Domestic content (+10%), Energy community (+10%)
Can reach 50%+ total credit on qualifying projects
MACRS Depreciation
5-year schedule + 20% bonus (2026)
Additional tax benefit for the system owner
$0.27/kWh guaranteed for 15-20 years
$0.65/W, max $5,000 + $2,000 battery adder
7% state sales tax exempt on solar equipment
100% exempt for 20 years
This incentive stack makes Rhode Island one of the top states for solar TPO economics. The TPO provider captures multiple revenue streams (ITC + REG + potentially REF) and passes the combined savings to you through lower monthly rates.
Aug 2022
IRA signed — Section 48E created alongside Section 25D extension
Dec 2025
Section 25D (residential ITC) expires — homeowners get $0
Jan 2026
Section 48/48E remains available for commercial + third-party owners
Jul 4, 2026
OBBBA deadline — must begin construction before this date
Side-by-side comparison for a typical 8 kW system at $3.10/W = $24,800 in Rhode Island.
Upfront Cost
$24,800
Federal ITC
$0 (25D expired)
REF Rebate
Up to $5,000
Est. Payback
~8 years (w/ REG)
You Own?
Yes, immediately
REG payments + REF rebate offset loss of ITC. Still requires $19,800+ upfront.
Upfront Cost
$0 down
Federal ITC
$0 (25D expired)
Monthly Payment
$155–$255/mo
Interest Rate
6–8% APR
You Own?
Yes, immediately
$0 down ownership. REG income offsets some loan payments. No ITC to reduce principal.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Monthly Payment
$110–170/mo
Maintenance
Included
You Own?
No (buyout option)
$0 down, ITC + REG + REF all captured by owner = very competitive monthly rate.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Rate
$0.11–0.17/kWh
Maintenance
Included
You Own?
No (buyout option)
At $0.14/kWh vs $0.29/kWh you save $0.15/kWh. RI's highest rates = biggest savings.
NuWatt's Propel program (TPO for 5 years, then ownership transfer) is currently available in Maine and Texas only. Given RI's exceptionally strong incentive stack, Propel would be particularly compelling here. Standard leases and PPAs are available today.
Rhode Island has the strongest combination of high rates, production payments, and incentives.
Rhode Island has the highest electric rates in New England. At $0.29/kWh, the gap between your utility rate and a PPA rate ($0.11–$0.17/kWh) is enormous — saving you $0.12–$0.18 per kilowatt-hour from day one. Over 25 years, that is $25,000–$40,000 in savings on a typical 8 kW system.
The Renewable Energy Growth (REG) program pays solar system owners $0.27/kWh in guaranteed payments for 15–20 years. No other New England state has a comparable production-based incentive. In TPO arrangements, the system owner captures REG payments and factors them into your lower monthly rate. REG enrollment opens annually in April.
The Renewable Energy Fund (REF) provides $0.65/W up to $5,000 for residential solar, plus a $2,000 battery storage adder ($7,000 total). Administered through Commerce RI. This upfront rebate stacks with the TPO arrangement — the system owner may claim it and factor it into your lower monthly payment. Verify contract terms.
RI's ConnectedSolutions demand-response program pays $225/kW during summer peak events for battery storage. A battery paired with your solar lease generates additional income — separate from the solar lease agreement. This makes a solar+battery combination particularly financially attractive in Rhode Island.
We believe in full transparency. Here is what works against TPO in Rhode Island.
80% retail net metering (post-April 2023) — not full 1:1, reducing export value
REG payments typically go to the system owner in TPO contracts — verify your contract
REF rebate may be claimed by system owner — confirm who receives it before signing
Standard lease means you never own the system (Propel not available in RI)
Typical 2–3% annual lease escalator — though RI rates have risen faster
Fewer TPO providers operate in RI compared to larger states like MA or NJ
Annual 125% cap on net metering limits oversizing potential
Post-April 2023 solar installations receive net metering credits at 80% of retail rate — not the full 1:1 credit that grandfathered systems enjoy. At $0.29/kWh, 80% equals ~$0.23/kWh in credits — still among the most valuable in the country. Combined with REG payments ($0.27/kWh), the total per-kWh value of RI solar production is exceptional. The annual cap is 125% of your usage, which limits system oversizing.
The best option depends on your credit, tax situation, and energy goals.
Compare My OptionsThese deadlines determine whether your TPO provider can claim the ITC for your RI project.
July 4, 2026
The One Big Beautiful Bill Act (OBBBA) requires projects to begin construction before July 4, 2026 to qualify for Section 48/48E. After this date, the 30% ITC for third-party solar owners may be eliminated or significantly reduced.
June 30, 2026
If bundling solar + EV charger, the $1,000 EV charger credit (Section 30C) expires June 30, 2026.
2027
The 20% bonus depreciation available in 2026 drops to 0% in 2027, reducing the TPO company's tax benefit and potentially increasing your lease/PPA payments.
RI permitting typically takes 4–6 weeks. REG enrollment opens in April. To meet the July 4, 2026 deadline, start the process by early spring 2026.
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Straight answers to the most common Rhode Island solar financing questions in 2026.
Not directly as a homeowner. Section 25D expired December 31, 2025 — cash or loan buyers receive $0. Through a solar lease or PPA, the third-party financing company claims the 30% ITC under Section 48/48E. RI's additional incentives (REF rebate, REG program) make lease/PPA economics among the strongest in the country.
Absolutely. At $0.29/kWh, Rhode Island has the highest electricity rates in New England. A PPA at $0.11–0.17/kWh saves you $0.12–0.18 per kilowatt-hour from day one. Over 25 years, a typical 8 kW system saves $25,000–$40,000. Rhode Island is one of the top states in the country for solar lease/PPA value.
The Renewable Energy Growth (REG) program pays solar system owners $0.27/kWh in guaranteed payments for 15-20 years. In a TPO arrangement, the system owner typically claims REG payments and uses them to offer you a lower lease/PPA rate. REG enrollment opens annually in April. This program makes RI TPO economics exceptionally strong — even better than states with higher electric rates but no production incentive.
The Renewable Energy Fund (REF) rebate provides $0.65/W up to $5,000 for residential solar, plus a $2,000 battery storage adder. Administered by Commerce RI. In TPO contracts, the system owner may claim the REF rebate. Some providers pass the savings to you through lower payments. Verify the REF clause in your contract before signing.
Post-April 2023 solar installations receive net metering credits at 80% of retail rate. Systems installed before April 2023 are grandfathered at full 1:1 retail. There is an annual cap at 125% of your usage. While 80% retail is less favorable than 1:1, Rhode Island's high base rate ($0.29/kWh) means credits at ~$0.23/kWh are still among the most valuable in the country.
Yes. ConnectedSolutions is RI's demand response program that pays $225/kW during summer events for battery storage. A battery paired with your solar lease generates additional income. The solar lease and ConnectedSolutions battery are separate agreements that complement each other for maximum savings.
Not yet. NuWatt's Propel program is currently available in Maine and Texas. Given RI's strong incentive environment (REF, REG, high rates), Propel could be particularly compelling here. Standard solar leases and PPAs are available in Rhode Island from multiple national providers.
The critical deadline is July 4, 2026. The third-party system owner must begin construction before this date to claim the Section 48/48E 30% ITC. RI permitting typically takes 4–6 weeks. Start the process by spring 2026 to ensure your project qualifies. Also note that REG enrollment opens annually in April — coordinate timing with your TPO provider.
Full cost breakdown at $3.10/W for Rhode Island in 2026.
$0.27/kWh guaranteed payments for 15-20 years.
Complete comparison of all RI solar financing paths.
Get Rhode Island launch alerts for NuWatt's upcoming ownership-transfer offer.