Rhode Island Solar Incentives: 2026 Guide
Updated December 4th, 2025 | Reading Time: 7 minutes
While the upfront cost of installing a solar energy system can be substantial, Rhode Island provides a range of solar incentives to help lower the cost. Below is an overview of every major solar incentive available in the state and how each one can benefit Massachusetts residents.
Rhode Island Tax Credits and Rebates
Rhode Island offers several tax credits and exemptions to keep initial costs low.
Tax Credit: A tax credit directly reduces your income tax liability.
Tax Exemption: A tax exemption relieves you from paying taxes on a particular product or service.
Rebate: A rebate is a partial refund in the cost of a product or service after the purchase has been made. Many solar rebates are paid out through multiple years.
Here are the available solar incentives in Rhode Island.
Federal Tax Credit
Residential Solar
The federal solar tax credit for residential projects has been eliminated for systems placed in service after December 31st, 2025, under the newly passed federal bill.
Commercial Solar
The federal solar tax credit remains at 30% of system costs through 2023. It will decrease to 26% in 2033 and 22% in 2034.
Renewable Energy Fund
The REF is a grant program offering property owners a maximum of $5,000 for homeowners or $75,000 for commercial projects depending on the size of the solar system.
Net-Metering
In cases where a solar system generates more electricity than a home uses, net-metering allows homeowners to send this excess energy to the grid in exchange for bill credits.
ConnectedSolutions
ConnectedSolutions pays homeowners to discharge energy from their battery systems during peak demand periods.
- Earn approximately $1,000 per battery per year for five years
- Total estimated earnings: ~$5,000 per battery
- No limit on the number of batteries enrolled
Solar Installation Property Tax Exemption
Even though solar (done the right way) increases home value, Rhode Island exempts homeowners from paying additional property taxes on their solar installation for 20 years.
Home Solar Project Sales Tax Exemption
All components of a home solar energy system are exempt from the 7% state sales tax.
Renewable Energy Growth Program
The REG Program is for residential and commercial property owners willing to sell all their renewable energy to the grid. At the end of the month, an energy surplus or deficit is calculated by subtracting the amount of consumed electricity from the amount sold. The customer will be compensated or billed respectively.
Estimated Savings Overview
Average Savings After Incentives
On average, the tax credits, rebates, and incentives cover 10-15% of the total cost of the system.
Hypothetical Example
All these solar incentives may seem complicated so, we’ve put together a hypothetical example to help you better understand your potential savings.
| Hypothetical System Cost* | $40,000 |
| Renewable Energy Fund | -$5,000 |
| Net Cost | $35,000 |
| Total Savings | $5,000 |
*The above example is purely hypothetical. Every solar system is custom-designed for each home, and costs will vary.
Our Conclusion
Homeowners can see a big reduction in electricity costs by going solar. Rhode Island is pushing to increase solar energy use and reduce greenhouse gas emissions. They’re providing residents with these solar incentives to support renewable energy initiatives and make the transition more affordable for residents.
We are here to answer any of your questions. Call us today, 508-988-8888
