2025 Solar Incentives Guide for Westerly, RI - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Westerly?

Source: https://www.dsireusa.org/

Solar incentives help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to convert their home partially or fully to renewable energy. You may qualify for various types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Rhode Island government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Net Metering: You may be able to sign a net metering contract with your Westerly utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
• Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your house.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC can be applied to solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can receive this credit for 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 the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To understand exactly how much the ITC could save you, speak with your local Westerly solar panel installer.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will see a slight decrease annually until the end of the program in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to reach out to your local Westerly solar panel company with your questions.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives — which might be given by your county or municipality, or by the state of Rhode Island — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Westerly

The nationwide use of solar energy has gone up significantly in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the Rhode Island government, the federal government or your local utility company. Reaching out to your local Westerly solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.