2024 Solar Incentives Guide for Providence, RI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Providence.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Providence?
Local Option - Property Tax Exemption for Renewable Energy Systems
Rhode Island C-PACE program
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
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the Rhode Island government or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Providence 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 other areas you might be refunded a percentage of the value.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Have questions about how the ITC applies to your specific situation? Reach out to your local Providence solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Under the new program, solar installation projects that are completed between 2022 and 2032, may be eligible for a 30% tax credit. This credit amount 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 Providence solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more may be offered at the local or state level. These incentives may be provided by your county or municipality, or by the Rhode Island government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Providence
The expanding number of solar incentives available has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You may receive solar incentives from the Rhode Island government, the federal government or your local utility company. Reaching out to your local Providence solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Providence, RI Solar Incentives FAQs
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