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Section 25D expired December 31, 2025. Zero dollars for homeowners. But Rhode Island has something no other state does: REG + net metering stacking that delivers $0.50+/kWh in combined value. Here are the honest numbers.
Still absolutely worth it for most RI homeowners
Rhode Island has the best state-level solar incentive stack in the entire country. The REG program alone pays $0.27/kWh for 15 years — that is $39,590 in guaranteed income before net metering credits, tax exemptions, or the REF rebate are even counted. Combined, these incentives create a 6.6-year payback for cash buyers without any federal tax credit. Most states without the ITC have payback periods of 12-15 years. Rhode Island is in a different league.
The loss of the 30% federal ITC (Section 25D) is real. It added $7,104 in savings on an 8 kW system and pushed payback down to 4.1 years. But unlike most states that relied heavily on the federal credit, Rhode Island built its own incentive infrastructure. REG, REF, net metering (guaranteed through 2039), tax exemptions, and the highest electric rates in New England all remain untouched.
OBBBA signed into law — eliminates Section 25D and 25C effective end of 2025
Section 25D expires — $0 residential solar ITC for cash/loan purchases
Next REG enrollment window opens (first-come-first-served, annual 40 MW cap)
Section 48/48E deadline — third-party projects must begin construction before this date for 30% ITC
Real numbers for an 8 kW system in Rhode Island. The only difference is the loss of the 30% federal ITC — every state incentive remains identical.
| Item | 2025 (With 30% ITC) | 2026 (No ITC) |
|---|---|---|
| System Cost (8 kW) | $23,680 | $24,480 |
| Federal ITC (Section 25D) | -$7,104 (30%) | $0 (EXPIRED) |
| REF Rebate ($0.65/W, cap $5K) | -$5,000 | -$5,000 |
| Sales Tax Saved (7%) | -$1,658 | -$1,714 |
| Net Cost After Incentives | $9,918 | $17,766 |
| REG Income (15 yr @ $0.27/kWh) | $39,590 | $39,590 |
| Net Metering Value (25 yr) | ~$70,300 | ~$70,300 |
| Property Tax Saved (20 yr) | ~$7,240 | ~$7,240 |
| Payback Period | ~4.1 years | ~6.6 years |
| 25-Year Net Savings | ~$130,000+ | ~$120,000+ |
Payback went from ~4.1 years to ~6.6 years — an increase of ~2.5 years. 25-year savings dropped from ~$130K to ~$120K. That is a real difference, but 6.6 years is still the fastest solar payback in the country without any federal credit. The REG program alone delivers $39,590 over 15 years — nearly double the lost ITC value of $7,104. The panel warranty is 25 years. You will be collecting pure profit for nearly 19 years after payback.
Most states relied primarily on the federal ITC. Rhode Island built its own incentive infrastructure. When 25D died, these seven state-level programs kept RI solar viable — and highly profitable.
$0.27/kWh x 15 years = ~$39,590
The REG program pays solar owners a fixed above-market rate of $0.2723/kWh for every kilowatt-hour produced, locked in for 15 years at enrollment. For an 8 kW system producing ~9,700 kWh/year, that is approximately $2,639 per year or $39,590 over the full 15-year term. This is the single most valuable solar incentive in New England and it stacks ON TOP of net metering credits. Enrollment opens annually in April on a first-come-first-served basis.
$0.29/kWh average (53% above national)
Rhode Island Energy charges an average of $0.29/kWh for residential customers, 53% above the national average of $0.19/kWh. Block Island Power charges $0.35/kWh. Every kilowatt-hour your solar panels produce displaces electricity that costs significantly more than what most Americans pay. High rates are the fundamental economic engine that drives solar payback in RI.
$0.65/W upfront, capped at $5,000
The Rhode Island Renewable Energy Fund (REF) provides an upfront rebate of $0.65 per watt, capped at $5,000 for residential systems. For an 8 kW system, the raw calculation is $5,200, capped at $5,000. An additional $2,000 battery adder is available if you install battery storage. Applied through Commerce RI grant rounds (spring, summer, fall). Must apply BEFORE installation begins.
$0.232/kWh effective credit rate
Rhode Island credits excess solar production at 80% of retail rate for systems installed after April 15, 2023. At $0.29/kWh retail, that is $0.232/kWh effective credit. Credits roll over monthly with March annual true-up. Combined with REG payments ($0.27/kWh), the effective value of solar production in RI exceeds $0.50/kWh in early years. Net metering is guaranteed by Rhode Island law through 2039.
7% saved = ~$1,714
All solar equipment, installation labor, and battery storage are exempt from Rhode Island's 7% sales tax (extended to batteries by H7506). On an 8 kW system costing approximately $24,480, this saves $1,714 at purchase. Applied automatically by your installer. No application needed.
100% exempt from assessment
Solar installations are 100% exempt from property tax assessment in Rhode Island for 20 years. Solar adds approximately 3-4% to home value, but your property taxes will not increase despite the added value. With RI average effective property tax rate of 1.53%, the annual savings are approximately $362, totaling $7,240 over the 20-year exemption period.
$225/kW summer + $50/kW winter
If you add a battery, Rhode Island Energy pays you $225/kW in summer (June-September) and $50/kW in winter (December-March) through the ConnectedSolutions demand response program. A 10 kW battery earns approximately $2,750/year. This is additional income on top of REG and net metering, available for Tesla Powerwall, Enphase IQ, SolarEdge, and other qualifying batteries.
Versus net system cost of ~$17,766 (after REF + sales tax exemption). Solar pays for itself approximately 7x over — without any federal tax credit.
Rhode Island is the only state in the country where above-market production payments (REG) stack on top of net metering credits. This creates a combined per-kWh value that no other state can match.
$0.27
per kWh, 15 years
Paid monthly by RI Energy for every kWh your system produces
$0.23
per kWh (80% of retail)
Bill credits for exported energy, separate from REG
Combined value per kWh produced
$0.50+
For the first 15 years. After REG expires (year 16-25), net metering credits continue at $0.23/kWh+
In most states, losing the 30% ITC meant losing the single largest solar incentive. In Rhode Island, the ITC was the FOURTH most valuable incentive after REG, net metering, and high electric rates. That is why RI payback only increased by 2.5 years (from 4.1 to 6.6) while the national average increased by 5-7 years. Rhode Island never needed the federal credit to make solar work — it just made the math faster.
Section 25D (residential) is dead, but Section 48/48E (commercial) is still active. This creates a powerful option for homeowners who do not want to pay $17,000-$19,000 upfront.
A financing company (not the installer, not you) owns the solar system on your roof. You pay for the energy it produces at a rate below your current utility cost.
As a business entity, the system owner claims the 30% Section 48/48E ITC. They also receive REG payments and net metering credits, reducing their cost basis significantly.
You get $0 upfront with PPA rates typically 10-20% below your current RI Energy rate, or lower fixed lease payments. Immediate savings from day one, no maintenance responsibility.
Section 48/48E requires projects to begin construction before July 4, 2026. After this date, PPA/lease rates will likely increase significantly because the third-party can no longer claim the 30% ITC.
Cash vs Loan vs Lease comparisonIf you are considering a solar PPA or lease in Rhode Island, signing before July 4, 2026 matters. After this date, the third-party can no longer claim the 30% ITC, which means PPA rates will likely increase 15-25%. Combined with RI's REG program (which the third-party also captures), the pre-deadline PPA economics in RI are among the best in the country.
Without the federal ITC, most states see solar payback periods stretch to 10-15 years. Here is how Rhode Island compares to other states in 2026 without any federal tax credit.
At 6.6 years, Rhode Island's solar payback without the federal ITC is faster than any other state. The reason is simple: RI is the only state that stacks a 15-year above-market production payment program (REG) on top of net metering credits. No other state offers this dual-income structure for residential solar. Combined with the $5,000 REF rebate, high electric rates, and generous tax exemptions, RI has built the strongest state-level solar incentive package in America.
Year-by-year cumulative savings for an 8 kW system in Rhode Island purchased in 2026 with cash (no federal ITC). REG income, net metering credits, and tax savings all included.
| Year | REG Income | Net Metering | Tax Savings | Cumulative |
|---|---|---|---|---|
| Year 1 | $2,639 | $2,813 | $2,020 | $7,472 |
| Year 3 | $7,917 | $8,439 | $2,744 | $19,100 |
| Year 5 | $13,195 | $14,766 | $3,468 | $31,429 |
| Year 7Payback | $18,473 | $21,569 | $4,192 | $44,234 |
| Year 10 | $26,390 | $32,576 | $5,278 | $64,244 |
| Year 15 | $39,590 | $54,380 | $7,238 | $101,208 |
| Year 20 | $39,590 | $76,184 | $9,198 | $124,972 |
| Year 25 | $39,590 | $97,988 | $9,198 | $146,776 |
Honest numbers for every buyer type, without the federal ITC.
Net cost: ~$17,766 | 25-yr savings: ~$120K+
$0 upfront | 6-8% APR | REG offsets payments
$0 upfront | Immediate savings | July 2026 deadline
Rhode Island has the most aggressive renewable energy target in the country: 100% renewable electricity by 2033. This is not a suggestion — it is law. This commitment provides long-term certainty that RI's solar incentive infrastructure will remain strong.
Rhode Island's renewable energy targets mean the state has every incentive to maintain its solar programs. Net metering is legislatively protected through 2039. REG enrollment is mandated annually. The 100% renewable by 2033 target requires continued growth in distributed solar. Unlike federal credits that can be killed by a change in Congress, RI's programs are embedded in state law with bipartisan support and regulatory infrastructure.
Straight answers about solar without the tax credit in Rhode Island.
Yes. Rhode Island is one of the strongest solar markets in the entire country even without the federal ITC. The combination of the REG program ($0.27/kWh for 15 years = ~$39,590), REF rebate ($5,000 upfront), high electric rates ($0.29/kWh), net metering at 80% retail (guaranteed through 2039), and 7% sales tax exemption creates a payback period of approximately 6.6 years for cash buyers. That is still dramatically better than most states without the ITC, and well within the 25-year panel warranty.
You do not personally receive a tax credit, but the benefit is passed through to you. With a solar lease or PPA, a third-party financing company owns the system on your roof. As a business entity, the third-party system owner can claim the 30% commercial Investment Tax Credit under Section 48/48E for projects beginning construction before July 4, 2026. The savings are passed through as lower PPA rates or lease payments. The installer does not claim the credit — the system owner (financing company) does.
For a cash purchase of an 8 kW system in Rhode Island, the payback period is approximately 6.6 years without the federal ITC. This accounts for REG income (~$2,639/yr for 15 years), net metering credits (~$2,813/yr at 80% of $0.29/kWh), the $5,000 REF rebate, $1,714 in sales tax savings, and property tax exemptions. Before the ITC expired, payback was approximately 4.1 years. The increase is 2.5 years, but 6.6 years is still among the fastest paybacks in the country without any federal credit.
Rhode Island still has the best incentive stack in New England: (1) REG program paying $0.27/kWh for 15 years, (2) REF rebate of $0.65/W up to $5,000 (plus $2,000 battery adder), (3) net metering at 80% retail ($0.232/kWh) guaranteed through 2039, (4) 7% sales tax exemption, (5) 20-year property tax exemption, (6) ConnectedSolutions battery revenue ($225-$2,750/yr), and (7) community solar via CRNM for those who cannot install rooftop panels. The only thing that changed is the federal residential ITC (Section 25D) going to $0.
No. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, eliminated Section 25D with no scheduled return date. There is no pending legislation to restore it. Waiting means paying $0.29/kWh electric bills every month while rates continue rising (RI rates have increased approximately 5% annually). A system installed today at $24,480 minus the $5,000 REF rebate ($19,480 net) will save over $120,000 in 25 years even without the ITC. Additionally, the Section 48 third-party ITC (for lease/PPA) expires July 4, 2026. REG enrollment windows fill quickly. Waiting means potentially missing both.
Rhode Island has the fastest payback of any state in the country without the federal ITC. At 6.6 years, RI beats Massachusetts (~7.8 years), Connecticut (~8.5 years), New Jersey (~9.5 years), and is dramatically better than the national average of 12-15 years without the ITC. The reason: RI is the only state that stacks above-market production payments (REG) with net metering credits, creating a combined value exceeding $0.50/kWh in early years. No other state offers this dual-income structure for residential solar.
Full overview of solar in RI — costs, all incentives, utilities, and next steps.
Detailed pricing data by system size, city, and installer.
Everything about the Renewable Energy Growth program — rates, enrollment, and stacking.
How to apply for the $5,000 Renewable Energy Fund rebate.
Compare financing options — especially important now that the ITC is gone.
Personalized system design, pricing, and payback analysis for your RI home.
See Your Payback Without the ITC
Personalized numbers for your RI home: system size, cost, REG income, net metering credits, REF rebate, and exact payback period — all calculated without the federal 25D tax credit. Free, no obligation, 24-hour response.