2023 Solar Incentives Guide for Smithfield, RI - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Smithfield.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Smithfield?
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
The term "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the Rhode Island government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
- Net Metering: Don't forget to talk with your Smithfield utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
To better understand how the ITC could apply to you, speak to your local Smithfield solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. American homeowners can now receive a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The credit will then decrease annually until its expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Smithfield solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. As with federal incentives, these could include rebates, tax credits and more. These solar incentives — which may be given by the state of Rhode Island, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Smithfield
You can apply for solar incentives from the federal government and the Rhode Island government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. If you're prepared to make the change to solar energy, reaching out to your local Smithfield solar panel installation expert is an excellent place to start.
Best Social Impact
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- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
EcoWatch's Smithfield, RI Solar Incentives FAQs
How do I know if I qualify for different solar incentives?
It's a good idea to talk to your local Smithfield solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of Rhode Island, might have other requirements.
My home already has solar panels installed. Do I qualify for any incentives?
You should plan to talk to someone from the company that installed your solar panels — or call a local Smithfield solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and that you're getting the most money possible.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. Make sure that you discuss your proposed plan with your local Smithfield solar installation expert, to get an understanding of what will be needed and what kinds of incentives 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.