2024 Solar Incentives Guide for Cumberland, RI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cumberland.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Cumberland?
Local Option - Property Tax Exemption for Renewable Energy Systems
Renewable Energy Products Sales and Use Tax Exemption
Property Tax Exemption for Renewable Energy Equipment
Small Scale Solar Grants (Commerce RI)
Direct Ownership: $1.05/W
Third Party Ownership: $0.70/W
Solar Domestic Hot Water Heating
Direct Ownership: 25% of project contract price
Third Party Ownership: 10% of total contract price
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. The incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Rhode Island and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Cumberland utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might get refunded a percentage of the value.
- Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when calculating property taxes on your house.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property you own for you to claim the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, equipment and labor), although the total amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To better understand how the ITC may apply to you, speak to your local Cumberland solar panel installer and request more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now dubbed the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Cumberland solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These solar incentives — which might be handled by the state of Rhode Island, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Cumberland
The variety of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the past 15 years. You can get solar incentives from the federal government, the Rhode Island government or from your local utility company. When you're ready to make the change to solar energy, calling your local Cumberland solar panel installation expert is an excellent place to start.
EcoWatch's Cumberland, RI Solar Incentives FAQs
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I change out my appliances for ones that can utilize solar energy, are there any credits I can claim?
The recently passed Inflation Reduction Act includes provisions for a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you receive but typically yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all the incentives you qualify for and applying them in the correct order.
What if I want to add solar panels to a rental property, vacation home or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.