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The Ultimate Guide to Saving Money with Solar Panels in Rhode Island

As a long-time Rhode Island solar expert and advocate, I‘m thrilled by the Ocean State‘s astounding progress and potential when it comes to renewable energy. With nation-leading incentives, ambitious clean energy targets, and soaring solar adoption, Rhode Island is at the forefront of America‘s transition to a sustainable future.

For Rhode Island homeowners, there‘s never been a better time to slash utility bills and carbon emissions by going solar. In this comprehensive guide, I‘ll break down all the ways you can save big with solar panels in RI, from lucrative state rebates to ongoing performance incentives to attractive solar financing options.

Whether you‘re a Providence eco-warrior, a Newport resident looking to boost your home value, or a South County homesteader dreaming of energy independence, I‘ll show you how to make your solar savings add up. Let‘s get started!

Why Going Solar Is a No-Brainer in Rhode Island

Before we dive into specific incentives, let‘s look at the fundamental reasons why solar panels are such a smart investment in Rhode Island:

  1. Sky-high electricity prices: Rhode Islanders pay the 4th highest electricity rates in the Lower 48, with residential prices averaging 25.66 cents per kilowatt-hour (kWh) as of April 2023. That‘s a whopping 82% higher than the U.S. average price of 14.07 cents/kWh! For a typical household using 500 kWh per month, that‘s an annual power bill of over $1500.

  2. Plummeting solar costs: Meanwhile, the cost of solar panels has plunged by over 60% in the last decade alone, and by over 80% since 2000, according to the National Renewable Energy Laboratory. In Rhode Island, the average price of a residential solar panel installation is now just $2.97 per watt (before incentives), well below the national average of $3.67/watt.

  3. Cheaper than the grid: The levelized cost of home solar energy in Rhode Island over 25 years is just 6.5 cents per kWh, making solar power 75% cheaper than grid electricity. According to EnergySage, the average Rhode Island household can save a net $39,154 over the lifetime of their solar panels, for an ROI of 194%!

  4. World-class solar incentives: On top of those baseline savings, Rhode Island offers some of the most generous solar incentives in the country. These include a robust upfront state rebate, the 30% federal solar tax credit, ongoing performance payments, and one of the nation‘s best net metering programs. We‘ll explore each of these lucrative solar incentives in depth below.

  5. Ambitious renewable energy goals: In 2022, Rhode Island doubled down on its commitment to 100% renewable electricity by 2033 – the fastest timeline of any U.S. state. The state also has a goal of cutting greenhouse gas emissions by 45% below 1990 levels by 2035, and achieving net-zero emissions by 2050. These bold targets mean strong political support and incentives for solar energy will continue for the foreseeable future.

So with potential savings rivaling Wall Street, unbeatable environmental benefits, and nation-leading incentives, going solar is simply a no-brainer for Ocean State homeowners. Now let‘s look at how you can maximize your savings when making the switch.

Slash Your Solar Costs with Rhode Island‘s REF Rebate

The first major solar incentive every Rhode Island homeowner should know about is the state‘s landmark Renewable Energy Fund (REF) rebate program. Launched in 2015 and expanded significantly in recent years, the REF provides generous grants that instantly reduce the upfront cost of going solar.

In 2023, the REF Small-Scale Solar Rebate Program offers $0.85 per watt for residential solar panel systems up to 10 kilowatts (kW) in size, up to a maximum of $7,000 per project. That means a typical 6 kW home solar installation (the average size in Rhode Island) would receive a rebate of $5,100.

To put that in perspective, $5,100 covers nearly one-third of the average $15,600 cost of a 6 kW solar array in Rhode Island (before incentives). Combine the REF rebate with the 30% federal solar tax credit, and you can slash your upfront solar investment by over 60%!

The REF solar rebate is available to any residential National Grid customer who owns a property in Rhode Island and installs a new solar panel system (leased systems are not eligible). Affordable housing developments and nonprofits can qualify for even larger REF grants, up to $600,000 per project.

Rebate applications are accepted on a first-come, first-served basis, with varying capacity available each year based on program funding. For the 2023 program year, $1.5 million in total rebates are available for small scale solar projects.

To apply for the REF rebate, you‘ll need to submit an online application via the Commerce RI REF portal, including documentation of your solar project design and projected output. Your solar installer can assist you with the application process.

While the REF rebate is a massive boon for solar savings in Rhode Island, don‘t wait too long to apply, as funds can be exhausted quickly each program year. To get in on this lucrative incentive, start getting solar quotes and comparing your options ASAP.

Earn Solar Income with the Renewable Energy Growth Program

Another stellar solar incentive available to Rhode Islanders is the Renewable Energy Growth (REG) program, which actually pays owners for the clean energy their panels produce. Talk about turning the tables on traditional energy expenses!

The REG program offers 15-year or 20-year contracts to buy the energy output of solar panel systems at fixed rates well above the market price of electricity. The prices are set by state regulators each year and vary based on system size, renewable energy resource (solar, wind, hydropower, etc.), and contract term.

For homeowners, the REG program is open to solar arrays from 1 kW up to 25 kW. In the 2023 program year, small-scale solar systems up to 10 kW can lock in rates of 28.25 cents per kWh for 15 years, or 24.35 cents/kWh for 20 years.

To put that in perspective, a 6 kW home solar system in RI generates roughly 7,200 kWh per year. With a 20-year REG contract at 24.35 cents/kWh, that array would earn $1,753 in annual REG payments, or a total of $35,060 over the life of the contract – more than double the typical system cost!

But the earning potential doesn‘t stop there. On top of the fixed REG payments, you‘ll still enjoy lower electricity bills thanks to all the solar energy you self-consume. And if you add a solar battery system to store your extra solar power for later use (more on that below), you can slash your utility bills to virtually zero.

To participate in the REG program, you must be a National Grid customer and own your solar panels (i.e. no leases or PPAs). You‘ll need to apply online via the National Grid website, including basic documentation of your system size and expected production.

National Grid typically opens the application window for RI REG enrollment in the springtime, with a lottery to award available capacity if applications exceed supply. But don‘t worry – if you miss out in the lottery, you can still interconnect your panels and earn bill credits under RI‘s excellent net metering program, which we‘ll discuss next.

Slash Your Bills with the Nation‘s Best Net Metering

For solar homeowners who don‘t snag an REG contract, Rhode Island also boasts one of the strongest net metering programs in the country.

Net metering allows you to send any surplus solar energy you produce back to the grid and earn credits on your utility bill. Those credits can then be used to offset your electricity costs in months when you use more power than your panels generate (like in the winter).

Under RI‘s net metering program, residential solar arrays up to 10 kW in size are compensated for their excess generation at the full retail rate – currently about 25 cents per kWh. The credits never expire and can be rolled over indefinitely, so you can "bank" your extra solar power for later use.

Even better, if your net metering credits exceed your electricity charges in a given month, National Grid will cut you a check for the difference. It‘s like getting paid to produce your own clean energy!

To take advantage of net metering, you‘ll need to apply via National Grid‘s online portal and pay a one-time interconnection fee based on your system size (currently $600 for a typical 6 kW array). Your solar installer can assist with the application process.

There are a few caveats: if you enroll in net metering, you won‘t be eligible for the REG program. And if you already participate in budget billing or load response programs through National Grid, you‘ll need to unenroll in those first.

But overall, net metering is an absolute game-changer for going solar in Rhode Island. According to EnergySage, a typical solar homeowner in Providence earns over $1,800 in net metering credits per year – enough to offset their entire electric bill!

When you combine net metering with the state REF rebate, federal tax credit, and solar loan financing, many Rhode Islanders can eliminate their electric bills starting on day one of going solar. Here‘s a quick case study to illustrate:

  • 6 kW solar PV system in Providence
  • Total installation cost: $17,820
  • Subtract REF rebate of $5,100
  • Subtract 30% federal tax credit of $5,346
  • Financing: 10-year solar loan at 5% APR
  • Monthly loan payment: $85
  • Average monthly net metering credits: $162
  • Typical electric bill before solar: $125
  • Electric bill after solar: $0
  • Monthly savings on day 1: $77
  • Estimated 25-year savings: $41,300

Not too shabby for a day‘s work! And remember, those savings will only grow as electricity prices inevitably rise over the 25+ year lifespan of your panels.

Boost Your Solar Security (and Earnings) With Battery Storage

While grid-tied solar arrays are fantastic for slashing electric bills in Rhode Island, they won‘t keep your lights on during an outage since they automatically shut down for safety reasons. That‘s where solar battery systems come in.

A solar battery system (also known as energy storage) lets you store your excess solar power for use during an outage, at night, or anytime you need it. Batteries can also help you avoid expensive "peak" electric rates and further reduce your utility bills.

Thanks to plummeting lithium-ion battery prices and skyrocketing demand, the U.S. residential energy storage market has absolutely exploded in recent years. Wood Mackenzie and the Energy Storage Association expect annual home battery installations to grow by an astonishing 1200% between 2019 and 2025.

In Rhode Island, solar batteries are even more attractive due to National Grid‘s ConnectedSolutions demand response program. ConnectedSolutions pays owners of eligible battery systems for allowing the utility to draw on their stored energy during periods of peak power demand on the grid.

Small-scale battery systems enrolled in ConnectedSolutions earn $400 per kilowatt (kW) in the summer and $25/kW in the winter just for being on standby. If and when an "event" is called, customers are compensated an additional $0.759 per kWh for any energy actually discharged from their batteries to support the grid. All of this is on top of regular net metering credits!

So let‘s say you install a Tesla Powerwall system with 5 kW/13.5 kWh of storage alongside your solar panels. Just for participating in ConnectedSolutions, you‘d earn $2,000 per summer, plus $98 for any energy discharged during events. Over the 10-year life of the program, that‘s $20,000 in extra income!

When you factor in ConnectedSolutions payments, a battery system can actually boost the ROI of your solar-plus-storage investment into the triple digits. Talk about a bright idea!

To qualify for ConnectedSolutions, your battery must be able to store and dispatch at least 4 kWh per event, and be available for up to 60 events per summer and 5 events per winter. Over a dozen battery models are eligible, including the Tesla Powerwall, LG Chem RESU, and Generac PWRcell.

The Bottom Line: Solar Savings Have Never Been Brighter in RI

From rebates to incentives to ongoing payments, Rhode Island offers a truly dazzling array of options to save with solar panels. And with sky-high utility rates, rock-bottom solar costs, and ambitious clean energy goals, the financial and environmental benefits of going solar in the Ocean State have never been brighter.

As we‘ve seen, a typical 6 kW solar panel system in Rhode Island can:

  • Earn a $5,100 state rebate
  • Qualify for a $5,346 federal tax credit
  • Generate $1,800 per year in net metering credits
  • Save $39,154 on electricity bills over 25 years
  • Pay for itself in just 6-8 years
  • Deliver an ROI of 194% – nearly triple the S&P 500 average
  • Increase home value by an average of 4.1%
  • Eliminate over 5 metric tons of carbon pollution annually

So if you‘re a Rhode Island homeowner who‘s ready to take control of your energy costs and carbon footprint, I hope this guide has shown you just how much you stand to gain by going solar. Trust me – as someone who‘s helped hundreds of Ocean State families make the switch, it‘s one of the smartest investments you‘ll ever make.

To get started on your solar journey, I recommend using EnergySage to compare free quotes from pre-screened solar installers in your area. Their one-stop solar marketplace makes it easy to find the best deal on the right system for your needs and budget.

The sooner you make the switch, the more you stand to save, so don‘t wait – start exploring your Rhode Island solar options today!