Solar Incentives in Rhode Island
Rhode Island homeowners who install solar in 2026 have access to several active state programs. The Renewable Energy Fund offers a direct grant of $0.65 per watt, capped at $5,000 per customer, for eligible net-metered residential solar PV installations. Separately, solar equipment — including PV modules, inverters, and mounting hardware — is fully exempt from Rhode Island's 7% sales and use tax. Installed residential systems are also exempt from local property tax assessment, meaning the added home value from a solar array does not increase a property tax bill. Homeowners served by Rhode Island Energy may net meter, receiving bill credits for excess generation delivered to the grid; credit rates are set by statute and utility tariff and vary by project, so customers should consult Rhode Island Energy's current tariff directly. An alternative to net metering is the Renewable Energy Growth Program, under which qualifying residential customers enter a 20-year contract and receive a fixed performance-based incentive paid per measured kilowatt-hour produced, with per-kWh ceiling prices set annually by the Public Utilities Commission. Residents who prefer not to install their own system may subscribe to a community solar project through the Community Remote Net Metering program and receive proportional bill credits.
The federal picture has changed significantly for 2026. The residential Clean Energy Credit under Internal Revenue Code §25D — commonly described as the 30% federal tax credit — expired for systems placed in service after December 31, 2025, following enactment of Pub. L. 119-21. Homeowners installing a new residential solar system in 2026 do not qualify for that credit. The absence of the federal credit increases the net out-of-pocket cost of a new installation and lengthens the payback period compared with prior years when the credit was available.
Rhode Island's residential electricity rate averaged approximately 29.91 cents per kilowatt-hour as of March 2026 — among the higher rates in the country, which generally improves the economic case for solar by increasing the value of each kilowatt-hour a system offsets or exports. The state grant, sales-tax exemption, and property-tax exemption partially offset upfront and ongoing costs, but payback timelines will vary based on system size, actual utility rates, and which program a homeowner participates in.
Figures here are verified as of June 2026 against official sources; programs, tariff rates, and grant availability change with each legislative session and rate case, and the Rhode Island Office of Energy Resources (energy.ri.gov) and Rhode Island Public Utilities Commission are the authoritative sources for current program terms.
Federal credit update. The federal residential Clean Energy Credit (the 30% “solar tax credit” under §25D) expired for systems placed in service after December 31, 2025. New 2026 residential installs do not qualify; a 2025 install can still be claimed on a 2025 return (IRS Form 5695). What this means for 2026 →
Current solar incentives in Rhode Island
Renewable Energy Growth (REG) Program
Rhode Island's Renewable Energy Growth Program lets customers of Rhode Island Energy install distributed generation, including residential rooftop solar, and sell the output under a long-term tariff at a fixed price. Participants enter a 20-year contract and receive a performance-based incentive (PBI) paid on each measured kWh the system produces, with the value of any bill credits the customer keeps netted out of the PBI payment. The program runs in annual program years with ceiling prices set by the Public Utilities Commission; for the 2026-2027 program year the proposed Small Solar I ceiling price (systems 15 kW and under) is 31.55 cents/kWh for host-owned systems, and Small Solar II (over 15 to 25 kW) is 28.65 cents/kWh.
| Amount | Fixed per-kWh PBI over a 20-year term, set by annual tariff. 2026-2027 proposed ceiling prices: Small Solar I (<=15 kW) 31.55 cents/kWh host-owned; Small Solar II (>15-25 kW) 28.65 cents/kWh. Rates vary by class and program year. |
|---|---|
| Who qualifies | Rhode Island Energy distribution customers installing eligible renewable distributed generation (including residential solar) who enroll in an open program-year enrollment; systems must meet tariff and siting requirements. |
| Administered by | Rhode Island Energy (administrator); Rhode Island Public Utilities Commission (sets tariffs); RI Office of Energy Resources |
Source: R.I. Gen. Laws Chapter 39-26.6 (Distributed Generation Growth Program); RI OER REG Program page; RIPUC Docket 25-52-REG (2026-2027 program year) Official source →
Net Metering
Rhode Island allows electric customers who install eligible renewable generation, including solar, to net meter and receive credits for the electricity their system delivers to the grid against the electricity they draw. The program is governed by R.I. Gen. Laws Chapter 39-26.4 and administered through Rhode Island Energy's tariffs. Net-metering credits are calculated under the statute, and for projects initiated after April 15, 2023 the renewable net-metering credit value is reduced by 20 percent, subject to an overall statewide capacity cap. New net-metering systems must generally be sited on preferred sites such as rooftops, brownfields, parking lots, and previously developed land rather than core forest land.
| Amount | Bill credits for net excess generation at rates set in statute and tariff; for projects initiated after April 15, 2023, the renewable net-metering credit is reduced by 20%. Statewide program capacity is capped (275 MW for the post-2023 credit tier). |
|---|---|
| Who qualifies | Rhode Island Energy customers (residential, commercial, municipal) installing eligible renewable generation that meets statutory siting and interconnection requirements. |
| Administered by | Rhode Island Energy (tariff administrator); RI Office of Energy Resources; Rhode Island Public Utilities Commission |
Source: R.I. Gen. Laws Chapter 39-26.4 (Net Metering); RI OER Net Metering page Official source →
Community Remote Net Metering
Rhode Island's Community Remote Net Metering program allows multiple customers to subscribe to a shared off-site renewable generation project (community solar) and receive net-metering bill credits proportional to their subscription, without installing their own system. The program originated as a 2016 pilot and has been expanded by statute; current rules require that at least 50 percent of a project's capacity benefit low- and moderate-income residents or disadvantaged communities. It is administered by the Office of Energy Resources together with Rhode Island Energy under the state's net-metering framework.
| Amount | Subscribers receive net-metering bill credits proportional to their share of the project's output; subscription terms vary by project. Program operates within a statutory capacity expansion (toward roughly 70 MW total). |
|---|---|
| Who qualifies | Rhode Island Energy customers who subscribe to an eligible community remote net-metering project; at least 50% of each project's capacity must serve low- and moderate-income or disadvantaged-community customers. |
| Administered by | RI Office of Energy Resources; Rhode Island Energy |
Source: R.I. Gen. Laws Chapter 39-26.4 (community remote net metering provisions); RI OER community solar page Official source →
Renewable Energy Fund - Small-Scale Solar Grant
Rhode Island's Renewable Energy Fund, administered by Rhode Island Commerce, offers grants toward the cost of small-scale solar photovoltaic systems, including residential rooftop installations. The small-scale grant is set at $0.65 per watt, capped at $5,000 per customer (and $190,000 per installer), and is available for net-metered systems. Homeowners apply through their chosen installer, who receives the grant after installation and a quality-assurance review. The program has limited annual funding; at the time of verification the small-scale solar application window was paused while the program was under evaluation.
| Amount | $0.65 per watt, up to $5,000 per customer (and $190,000 per installer), for net-metered small-scale solar PV. |
|---|---|
| Who qualifies | Rhode Island electric customers (including homeowners) installing net-metered small-scale solar PV; applications submitted by the participating installer. Subject to available funding and open application windows. |
| Administered by | Rhode Island Commerce (Renewable Energy Fund), with RI Office of Energy Resources |
Source: RI Commerce Renewable Energy Fund program page (Small-Scale Solar grant) Official source →
Renewable Energy Products Sales and Use Tax Exemption
Rhode Island exempts a defined list of renewable energy products from state sales and use tax. Exempt items include solar photovoltaic modules and panels, solar thermal collectors, DC-to-AC inverters that interconnect with the grid, manufactured mounting racks and ballast pans, and related equipment, as well as wind turbines, towers, and geothermal heat pumps. The exemption applies to the enumerated products without distinguishing residential from commercial use, so homeowners purchasing qualifying solar equipment do not pay Rhode Island sales tax on those items.
| Amount | 100% exemption from Rhode Island sales and use tax on the statutorily enumerated renewable energy products (otherwise 7% state sales tax). |
|---|---|
| Who qualifies | Purchasers of qualifying renewable energy products (solar PV modules/panels, inverters, mounting racks/ballast pans, solar thermal collectors, etc.); applies regardless of residential or commercial use. |
| Administered by | Rhode Island Division of Taxation |
Source: R.I. Gen. Laws § 44-18-30(57) (renewable energy products sales/use tax exemption) Official source →
Property Tax Exemption for Residential Renewable Energy Systems
Rhode Island law exempts residential-scale renewable energy systems, including solar, from local property taxation, so a homeowner who installs solar is not assessed additional property tax on the value of the system. For commercial-scale renewable energy systems, state law and Office of Energy Resources rules instead apply a uniform tangible-property tax of $5.00 per kilowatt of AC nameplate capacity rather than standard ad valorem assessment. The framework is set in R.I. Gen. Laws Chapter 44-3 (property subject to taxation).
| Amount | Residential systems: exempt from property tax. Commercial systems: taxed at $5.00 per kW of AC nameplate capacity (tangible value) instead of standard assessment. |
|---|---|
| Who qualifies | Owners of residential renewable energy systems (exempt); owners of commercial renewable energy systems (uniform $5.00/kW tangible tax). Applies to systems defined as renewable energy resources under state law. |
| Administered by | Rhode Island municipalities; RI Office of Energy Resources (commercial tangible-value rules); RI Division of Taxation |
Source: R.I. Gen. Laws § 44-3-21 (Renewable energy systems - Exemption); OER Rules and Regulations for Commercial Renewable Energy Systems Tangible Tax Value Official source →
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Programs verified as of June 2026 against official state and federal sources (each cited above); refreshed quarterly as legislatures and utility rate cases change the rules. How we verify this data. This page is informational only — not tax or legal advice.