2023 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 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Providence?
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/
The term "solar incentives" refers to financial incentives that are in place to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Different kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the Rhode Island government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Providence utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. Solar rebates can be given by your local utility company, by your state or by your county.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when calculating how much property tax you need to pay on your house.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a specific percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Curious how the ITC might apply to your specific situation? Get in touch with your local Providence solar panel installer to get more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then see a slight annual decrease until its expiration. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Providence solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others might only be available for a limited time. Incentives might be given by the Rhode Island government, or by your county or municipality.
Next Steps for Installing Solar in Providence
There are many kinds of solar incentives: those given by local utility companies, those given by the federal government and those given by the Rhode Island government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. Your local Providence solar panel installation company can help you learn more about which incentives you might qualify for, and get you on track to switch to renewable energy today.
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Providence, RI Solar Incentives FAQs
How much can I save on my electric bill annually if I add solar panels to my house in Providence?
On average, Providence homeowners who install solar panels save about $1,054.41 per year, or about $20,033.70 over 20 years after they make the switch.
What are some environmental benefits of installing solar panels on my house?
Solar energy is renewable — by switching where you get your energy, you can help lessen the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 200 pounds yearly, or around 4,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I trade in my appliances for ones that can use solar energy, are there benefits I can claim?
The new Inflation Reduction Act introduces several incentives meant to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I use multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to discuss your ideas with your local Providence solar installer. They can help you with the plan for your project and give you an understanding of various incentives that you may or may not qualify for.
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.