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Rhode Island's REG program and $5,000 REF rebate deliver a 7.1-year payback on solar — proving the smallest state packs the biggest incentive punch even after the federal tax credit expired.
Avg Utility Rate
$0.29/kWh
State Incentives
$5,000
Payback Period
7.1 years
25-Year Savings
$141,100
By NuWatt Energy Team • Updated February 2026 • 8 min read
Yes, solar is worth it in Rhode Island in 2026 even without the federal tax credit. With average utility rates of $0.29/kWh and $5,000 in state incentives, a typical 11kW system pays for itself in approximately 7.1 years and delivers $141,100 in total savings over 25 years. Solar locks in your electricity cost at a fraction of what you pay the utility, and the gap widens every year as rates climb 3-5% annually.
A typical residential solar installation in Rhode Island uses 25 panels to build a 11kW system. Here is the full cost breakdown before and after state incentives, with no federal tax credit applied (Section 25D expired December 31, 2025).
Cost Per Watt
$2.97/W
Gross System Cost
$32,623
Net Cost After Incentives
$27,623
2025 vs 2026 Cost Comparison
2025 (with 30% ITC): A homeowner in Rhode Island would have received a $9,787 federal tax credit, bringing the net cost down to $17,836.
2026 (no ITC): The same system now costs $27,623 after state incentives only — $9,787 more than it would have cost last year.
The payback period tells you how many years of electricity savings it takes to fully offset the cost of your solar installation. In Rhode Island, the math works out as follows:
Payback = Net Cost ÷ Annual Savings = $27,623 ÷ $3,869 = 7.1 years
| Year | Annual Savings | Cumulative (Net) | Status |
|---|---|---|---|
| Year 1 | $3,869 | -$23,754 | Recovering |
| Year 5 | $4,526 | -$6,667 | Recovering |
| Year 10 | $5,507 | +$18,829 | Profit |
| Year 15 | $6,700 | +$49,848 | Profit |
| Year 25 | $9,917 | +$133,505 | Profit |
Payback comparison: In 2025, this same system would have paid back in 4.6 years. In 2026, it takes 7.1 years — 2.5 years longer. The difference is entirely due to losing the $9,787 federal tax credit.
While Rhode Island homeowners can no longer claim the federal residential solar tax credit (Section 25D), the state offers several incentive programs that help offset the cost of going solar.
Above-market rate per kWh
The Renewable Energy Growth (REG) program provides guaranteed above-market-rate payments for every kWh produced over a 15-year contract term.
$0.65/W (capped at $5,000) + $2,000 battery adder
The Renewable Energy Fund provides a direct rebate of $0.65 per watt for residential solar installations, capped at $5,000 per project. An additional $2,000 battery adder is available.
7% savings
Solar equipment is exempt from Rhode Island state sales tax, saving approximately $2,284 on a typical 11 kW system.
Net metering is the policy that determines how your utility credits you for excess solar electricity you send to the grid. In Rhode Island, the specifics vary by utility company. Here is a summary of the top utilities and their current net metering policies.
| Utility | Credit Type | System Size Cap | Excess Policy |
|---|---|---|---|
| Rhode Island Energy | 1:1 retail rate credit (80% for post-April 2023 systems) | 25 kW (125% annual cap) | Credits roll over monthly; annual true-up at avoided cost |
| Pascoag Utility | 1:1 retail rate credit | 25 kW | Credits roll over monthly; annual true-up |
| Block Island Power | 1:1 retail rate credit | Varies | Contact utility for current excess generation policy |
Net metering is critical to your solar payback. When your panels produce more than you use during the day, the excess flows to the grid and your meter effectively runs backward. You receive credits that offset your nighttime and cloudy-day electricity usage. The stronger the net metering policy, the more value you extract from every kilowatt-hour your panels produce.
Losing the 30% federal tax credit makes solar more expensive upfront, but it does not erase the long-term financial case. Here is why Rhode Island homeowners should still seriously consider going solar in 2026:
REG program provides guaranteed above-market payments for 15 years
Small state but aggressive renewable energy goals (100% by 2033)
Rhode Island Energy offers 1:1 net metering (80% for post-April 2023 systems)
REF rebate + REG + high rates ($0.29/kWh) = ~7.1-year payback without federal credit
Rising utility rates protect your investment. Electricity prices in Rhode Island have historically risen 3-5% per year. Your solar panels produce power at a fixed cost, meaning your savings grow every single year as the gap between solar and utility pricing widens.
Solar increases your home value by approximately 4%. National studies consistently find that owned solar systems add roughly 4% to a home's sale price. On a median-priced home in Rhode Island, that translates to thousands of dollars in added equity — often recovering a significant portion of your net system cost before you factor in electricity savings.
These are real solar installations completed by NuWatt Energy in Rhode Island. Every system was designed, permitted, and installed by our team.
12 kW · 28 Silfab panels · Enphase IQ8+
Est. 12,084 kWh/year
Completed August 2024
View Full Project →
8.2 kW · 20 Q.CELLS panels · Enphase IQ8+
Est. 8,790 kWh/year
Completed September 2024
View Full Project →
13.2 kW · 33 LONGi panels · Enphase IQ8+
Est. 15,128 kWh/year
Completed September 2023
View Full Project →
The 30% federal Investment Tax Credit (ITC) is gone for homeowner purchases (Section 25D), but it is still available to solar companies through Section 48/48E. When you sign a solar lease or Power Purchase Agreement (PPA), the installer owns the system, claims the 30% credit, and passes some of those savings to you through lower monthly payments.
For a full comparison of owning vs. leasing solar in 2026, including monthly cost examples and long-term savings projections, see our Solar Lease vs. Buy 2026 guide.
Maximize your savings: Combine solar with a heat pump for maximum savings — electrifying both your electricity and heating in Rhode Island can cut your total energy costs by 50–70%.
The Renewable Energy Growth (REG) program provides guaranteed above-market-rate payments for every kWh your solar system generates over a 15-year contract. These payments are in addition to your net metering credits from Rhode Island Energy. The REG program is one of the most valuable solar incentives in New England, making Rhode Island a top state for solar ROI even without the federal tax credit.
The Renewable Energy Fund (REF) rebate provides $0.65 per watt upfront, capped at $5,000 per project, with a $2,000 battery adder available. Yes, you can stack the REF rebate with REG program payments and net metering credits. This combination of incentives is why Rhode Island has some of the best solar economics in the region, with a 7.1-year payback even without the federal ITC.
Rhode Island has set one of the most aggressive renewable energy targets in the nation: 100% renewable electricity by 2033. This goal creates strong ongoing policy support for solar installations, including the REG and REF programs. As the state works toward this target, solar incentives are expected to remain robust, giving homeowners confidence in long-term program stability.
Every roof is different. Get a personalized savings estimate based on your actual electricity usage, roof orientation, and local utility rates in Rhode Island.
Or call us directly: (877) 772-6357