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Rhode Island offers the most generous whole-home electrification incentive stack in New England. Combine solar, heat pump, and battery for $18,500+ in upfront rebates, plus $7,639 per year in ongoing payments and savings. Income-eligible households can receive up to $33,000 upfront.
$18,500+
Upfront Rebates
$7,639/yr
Ongoing Revenue
3.3 yrs
Payback Period
$235K+
25-Year Savings
2026 Update: Both the federal 25D solar tax credit and 25C heat pump tax credit expired December 31, 2025. Rhode Island state incentives (Clean Heat RI, REF, REG, HEAR) are now the primary incentive pathway. ARPA funding deadline: December 31, 2026.
Why combining solar and a heat pump in Rhode Island is the single best financial decision a homeowner can make in 2026.
Electricity: $0.29/kWh
Rhode Island has the 5th highest electric rate in the US. Average household pays $2,700+/year.
Oil: $3.45/gal
29% of RI homes still heat with oil. Annual cost: $2,500-3,500. Price spikes make budgeting impossible.
Propane: $3.58/gal
Even more expensive than oil. Common in rural RI. $3,000+/year in heating costs.
Combined: $5,500-6,500/year
Typical RI household pays this in combined electric + heating fuel. Growing 5-8% annually.
Heat pump replaces furnace/boiler
3x more efficient than oil/propane. Eliminates fossil fuel bill entirely. Also provides AC.
Solar offsets all electricity
8 kW system generates enough to power your home AND the heat pump. Electric bill drops to $7/month minimum.
Battery earns revenue
ConnectedSolutions pays $2,750/year for grid services. Battery also provides backup power.
Net result: $0/year energy cost
Combined REG payments + net metering + ConnectedSolutions exceed any remaining energy costs.
Aligned with RI's 100% Renewable Energy by 2033
Rhode Island mandated 100% renewable electricity by 2033 under the 2022 Act on Climate. Full electrification with solar + heat pump positions your home ahead of this transition, locking in savings before demand for contractors and equipment surges.
Even without the federal tax credit, Rhode Island has the best solar incentive stack in New England. Here is every dollar available to RI homeowners in 2026.
$5,000 + $2,000 battery adder
The Renewable Energy Fund (REF) provides an upfront rebate of $0.65/W for solar (capped at $5,000 for residential) plus a $2,000 adder for battery storage. Applied at point of sale to reduce your out-of-pocket cost immediately.
Full REF rebate guide~$2,639/year for 15 years (~$39,600 total)
The Renewable Energy Growth program pays a fixed above-market rate per kWh generated for 15 years. Historical rate: $0.27/kWh for small residential. This stacks ON TOP of net metering, making RI solar economics uniquely strong. Rate is locked at enrollment for the full term.
Full REG program guide~$2,250/year in bill credits
Rhode Island credits exported solar at the full retail rate ($0.29/kWh) with no non-bypassable charges. Guaranteed by state law through 2039 — 13+ more years of certainty. 25kW residential cap. Annual true-up in March.
Full net metering guide7% sales tax exempt + 20-year property tax exempt
Solar and heat pump equipment purchases are exempt from RI's 7% sales tax, saving approximately $3,765 on a combined $53,780 project. Solar panels are also exempt from property tax for 20 years, even though they increase your home value by roughly 4%.
Full tax exemption guide$0 for homeowners
Section 25D expired under the OBBBA (signed July 4, 2025). Homeowners purchasing solar with cash or a loan receive zero federal tax credit. Third-party owned systems (lease or PPA) still qualify for the 30% commercial ITC under Section 48/48E, claimed by the system owner.
Solar without the tax credit guideRhode Island offers among the most generous heat pump rebates in the country. Clean Heat RI alone can cover 60-100% of system costs, depending on income.
Up to $11,500
60% of total system and installation cost. Applied at point of sale — you never pay the full amount upfront.
Up to $18,000
100% of cost covered for households at or below 150% of State Median Income. No out-of-pocket cost.
Up to $8,000
Rhode Island was the FIRST state in New England to launch HEAR (September 17, 2024). Low-income pathway active now.
$0 — Expired
Section 25C expired December 31, 2025 under the OBBBA. No federal tax credit for heat pumps in 2026.
Every incentive dollar available when you bundle solar, heat pump, and battery in Rhode Island in 2026.
| Incentive | Component | Standard | Income-Eligible |
|---|---|---|---|
| Clean Heat RI | Heat Pump | $11,500 | $18,000 |
| HEAR Rebate | Heat Pump | N/A | $8,000 |
| REF Rebate | Solar | $5,000 | $5,000 |
| REF Battery Adder | Battery | $2,000 | $2,000 |
| Total Upfront | $18,500 | $33,000 |
| Source | Description | Annual Value |
|---|---|---|
| REG Payments | $0.27/kWh for 15 years (8 kW system) | $2,639 |
| Net Metering Credits | 100% retail rate ($0.29/kWh), guaranteed to 2039 | $2,250 |
| ConnectedSolutions | $225/kW summer + $50/kW winter (10 kW battery) | $2,750 |
| Total Annual | $7,639 |
Rhode Island's incentive stacking becomes extraordinary for income-eligible households. Up to $33,000 in upfront incentives can cover most or all of a combined solar + heat pump + battery project.
Out-of-pocket on a $53,780 project: approximately $20,780. With financing, monthly payments are often less than what you were paying for oil/propane + electricity.
Clean Heat RI income-eligible tier requires household income at or below 150% of State Median Income (SMI):
HEAR low-income pathway: at or below 80% AMI. Stacks with Clean Heat RI income-eligible tier.
A common concern: replacing oil with a heat pump just shifts costs to the electric bill. Solar eliminates that concern entirely.
Electric: 7,200 kWh/yr = $2,088/yr
Oil/Propane: 800 gal/yr = $2,760/yr
Total: $4,848/yr
Electric: 12,200 kWh/yr = $3,538/yr
Oil/Propane: $0/yr
Total: $3,538/yr (saves $1,310)
Solar generates: 9,770 kWh/yr
Net electric cost: ~$84/yr (minimum bill)
Total: ~$84/yr (saves $4,764)
The math is clear: solar eliminates the “higher electric bill” concern
A 8 kW solar system produces approximately 9,770 kWh per year in Rhode Island (4.2 peak sun hours). A heat pump adds 5,000 kWh to your baseline 7,200 kWh, totaling 12,200 kWh. Solar covers 80% of that, and net metering credits handle the seasonal mismatch (excess summer production offsets winter shortfall). Your annual electric bill drops to the $7/month minimum.
A home battery transforms your solar + heat pump system from a cost-saver into a revenue generator through Rhode Island's ConnectedSolutions program.
Revenue, not just savings
ConnectedSolutions actively pays you for grid services. $2,750/year is income on top of the energy savings from solar + heat pump.
Backup power for heat pump
When the grid goes down, your battery keeps the heat pump running. Critical for winter storms on the RI coast.
Solar self-consumption
Store excess daytime solar and use it to run the heat pump at night. Maximizes the value of every kWh you generate.
$2,000 REF adder
The REF battery adder reduces your out-of-pocket cost by $2,000, improving the already strong battery ROI.
Here is what a real-world solar + heat pump + battery project looks like for a typical Rhode Island home in 2026.
Solar System
8 kW / 20 panels
$23,280 gross
Heat Pump
3-ton ducted
$18,500 gross
Battery
10 kW / 13.5 kWh
$12,000 gross
Payback: ~3.3 years with $10,839/yr in combined benefits (REG + NM + ConnectedSolutions + fuel savings)
Payback: ~1.9 years — the system pays for itself in under 2 years and generates returns for 23+ more years.
25-Year Total Savings (Standard Household)
$235,695+
Includes REG payments (15 years), net metering (25 years), ConnectedSolutions (25 years), eliminated fossil fuel costs, and avoided electricity rate increases of 5% annually.
Important timing notes
A standard Rhode Island household can receive $18,500 or more in upfront incentives by bundling solar panels, a heat pump, and a battery. This includes $11,500 from Clean Heat RI for the heat pump, $5,000 from the REF rebate for solar, and $2,000 for the battery adder. On top of that, you earn approximately $7,639 per year from REG payments ($2,639), net metering credits ($2,250), and ConnectedSolutions battery revenue ($2,750). Over 25 years, total savings exceed $235,000.
Yes. Rhode Island explicitly allows stacking of Clean Heat RI heat pump rebates with solar incentives. Clean Heat RI covers the heat pump side, while the REF rebate and REG program cover solar. These are separate programs administered by different agencies, so there is no conflict. You can also stack HEAR rebates (for income-qualified households) and RI Energy utility rebates on top of everything.
No. Both the Section 25D residential solar tax credit and the Section 25C heat pump tax credit expired on December 31, 2025 under the OBBBA signed July 4, 2025. Homeowners purchasing solar or heat pumps with cash or a loan receive zero federal tax credit. However, third-party owned solar systems (lease or PPA) still qualify for the 30% Section 48/48E commercial ITC claimed by the system owner, not the homeowner.
A heat pump replaces your fossil fuel heating with electric heating, which increases your electricity usage by 4,000-6,000 kWh per year. Without solar, you are trading an oil bill for a higher electric bill. Solar panels generate enough electricity to offset the added heat pump usage plus your baseline usage, effectively eliminating both your heating fuel costs and your electric bill. At Rhode Island rates of $0.29/kWh, the solar savings are substantial.
ConnectedSolutions is Rhode Island Energy's demand response program for home battery owners. During peak grid demand events (typically summer afternoons and winter evenings), your battery discharges stored solar energy to the grid. RI Energy pays $225 per kW of battery capacity in summer plus $50 per kW in winter. A typical 10 kW battery earns approximately $2,750 per year. This revenue stream helps offset the battery cost and makes the three-part solar + heat pump + battery bundle highly cost-effective.
Complete solar guide with REG, REF, net metering
Real pricing data and system cost breakdown
Clean Heat RI, HEAR, utility rebates
Ductless, ducted, hybrid cost breakdown
$5,000 solar + $2,000 battery adder
15-year above-market payments
$225/kW demand response revenue
150% SMI thresholds, 100% coverage tier
Best financing for your situation
NuWatt Energy designs whole-home electrification packages that maximize every available incentive. Clean Heat RI, REF, REG, ConnectedSolutions — we handle all the paperwork. Get a free assessment and see your personalized savings.