Is Solar Worth It in Rhode Island? (2024 Homeowner's Guide)

Watch Below: Learn What To Know Before Going Solar in Rhode Island

How to Figure Out if Solar Panels are Worth It in Rhode Island

Generally speaking, solar panels are an excellent investment in Rhode Island that will save most homeowners money, but they aren’t for everyone. Below, we’ll explain some of the most important metrics you can you to gauge your home’s solar viability.

What’s Your Home Electricity Consumption?

One of the easiest ways to see if solar is worth it for you is to check your electricity usage, which you can do on your past electric bills. Solar panels save you money on electricity, so the more energy you use, the more valuable solar will be. In most cases, an average monthly energy consumption below 500 kWh means that solar might not save you enough to make the investment worthwhile. Most Rhode Islanders consume around 594 kWh per month, which is well below average but above the cutoff for solar viability. This means that most residents in the Ocean State will benefit and save from going solar. In fact, given the very high electricity rates in the area, even homeowners who use a bit below 500 kWh per month will still likely save a significant amount over time.

How Much Is It To Go Solar in Rhode Island?

The price of solar panels in Rhode Island averages around $3.68 per watt, which is quite a bit more than the national average of $3.33. However, most residents need about two-thirds the system size required throughout the rest of the country, which puts the average 6-kW system at a total of around $15,456 after the federal tax credit is applied. Solar panels provide more value in areas where energy bills are higher than average, which either means usage is above average or electricity rates are high. Although Rhode Islanders use much less energy than most US residents per month, the high electricity rates leave them with some of the most expensive monthly bills in New England and even the country. As such, solar is more valuable in Rhode Island than in most other states.

What’s the Payback Period for Solar in Rhode Island?

As the energy savings from your solar panels add up over time, they are expected to offset the total system expense and then provide additional savings. The timeline for this payoff occurring is called the solar panel payback period, and it’s one of the most important factors to consider when going solar because it takes several other factors — like available sunlight, local climate, average energy usage and more — into consideration. The average solar panel payback period in Rhode Island is around 8 years, which is well below the national average of 12 years. That means that solar is more valuable and a better investment in Rhode Island than in most other states. However, most residents will have a payback period of between 5 and 11 years, and solar will be less valuable to you if your estimated payback period is longer than 11 years.

What Are Average Buy-Back Rates in Rhode Island?

Most states mandate net metering, which is a huge benefit for solar customers. Net metering lets you overproduce energy with your panels and sell the excess back to your utility company for a credit to your power bill. Net metering makes it much easier to eliminate your electric bill, especially if your utility company’s buy-back rate is equal to the retail rate for energy. The Public Service Commission in Rhode Island does mandate net metering, but it doesn’t require any specific buy-back rate. As such, most local utilities will offer their avoided-cost rate, which is less than what you’d pay for incoming energy. This is still a helpful policy, but you’ll likely need to install a solar battery along with your system if you want to eliminate your electric bill entirely. Solar batteries will also provide you with power through an outage, which is another huge benefit.

How Much Sun Does Your Roof Receive?

Solar panels require sunlight to produce energy and save you money, so the more sunlight that your roof receives, the more valuable your solar panels will be overall. Rhode Island is considered about average in terms of available sunlight and an overall good place for solar viability. The state as a whole receives around 202 sunny days per year, compared to the national average of 205. You will also need to assess your home on an individual basis as well. First, you need to consider the direction your roof faces, as south-facing roofs are the best in the US, with west-facing roofs being a decent option as well. You should also look for shading on your roof from trees or other obstructions, as any sun blockage will reduce your production and your solar panels’ overall value.

What’s the Outlook on Solar in Rhode Island?

The adoption of solar power has been a relatively slow process in Rhode Island, in large part because the state relies so heavily on natural gas. There are tax incentives available for gas companies, which incentivize fossil fuel usage over renewable energy sources. Rhode Island produces around 89% of its energy from natural gas.³ However, the solar market is growing in the Ocean State, with residential solar installations increasing in prevalence each year over the past decade or so. Commercial solar has also become far more popular in the past five years or so. The favorable solar incentives available in Rhode Island will very likely help the industry continue to grow in the area, which should bring down the price of solar panels and make them more accessible overall.

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Benefits of Solar Energy in Rhode Island

Homeowners who go solar in Rhode Island will enjoy many upsides, most of which are financial but some of which are environmental. We’ll discuss the most appealing benefits of solar panels below.

Electricity Bill Savings

The most significant financial benefit of installing solar panels is the savings you’ll enjoy on your electric bills. Solar panels produce energy for your home to use, which reduces how much you need to pull from the grid. With electricity rates

being higher in Rhode Island than most states — nearly $0.10 per kWh above the national average — the savings you’ll see in Rhode Island will likely be astounding. The average Rhode Islander spends around $154.14 per month on power, which means your potential savings could total $1,849 per year. The typical resident saves approximately $46,071 over the lifespan of their solar equipment, and that’s after the system pays for itself. You could save even more if energy prices continue to go up, as solar essentially lets you lock in a below-average electricity rate for 25+ years.

Lower Taxes & Access to Other Incentives

The state and federal governments incentivize solar conversions, and the perks they offer for installing solar panels make this clean energy source more affordable and appealing. One of the most significant solar incentives available is the federal solar tax credit (ITC), which is offered by the federal government. The ITC is a credit to your federal income taxes owed for 30% of your total system expense. In Rhode Island, this credit averages around $6,624. We’ll briefly touch on some additional Rhode Island solar incentives below:

• Net Metering: Net metering helps solar customers offset and even eliminate electric bills. This program is mandated in Rhode Island, but most utility providers use an avoided-cost buy-back rate, which is helpful but less appealing than the retail rate.
• Rhode Island Renewable Energy Growth (REG) Program: This program works just like net metering, but it further incentivizes solar conversion by providing a buy-back rate that’s above the retail rate in some cases — as is the case with National Grid’s program.
• Rhode Island Renewable Energy Fund (REF): This is a grant program for helping residents install renewable energy systems, like small-scale solar projects. The funds are available on a first-come-first-serve basis.
• Residential Solar Energy Property Tax Exemption: This is a property tax exemption that prevents your property taxes from going up as a result of installing solar panels. In many cases, this can save solar customers thousands of dollars over time.
• Renewable Energy Products Sales and Use Tax Exemption: This is a sales tax exemption that waives state sales tax on all solar equipment and installation fees.

Home Resale Value Increase

Another substantial benefit of installing solar panels is the bump in home value solar provides. Zillow conducted research about the value added by solar panels and found that the average home will increase in value by around 4.1% when solar is installed.⁴ In Rhode Island, where the average home value is $435,415, most residents will see a value bump of around $17,852!⁵ This solar benefit is only enjoyed by homeowners who buy or finance solar panels. Solar leases and power purchase agreements (PPAs) will not only not increase your home value, but they can also make your home less appealing to buyers, as leases might need to be transferred.

Clean, Renewable Energy

Finally, the environmental benefits afforded by solar might be even more appealing to some Rhode Islanders than the financial incentives. Solar is considered clean energy that lets you avoid dependence on fossil fuels and your utility company. Installing solar panels will reduce your emissions, your carbon footprint and your contribution to pollution. Plus, solar will provide you with more energy independence, which often means avoiding rate hikes from electric companies for the 25+ years your panels are expected to last.

What to Look Out For When Considering Solar in Rhode Island

Once you decide that solar panels are a worthwhile investment for your home, there are some additional things you should know and think about before moving forward with the installation process. We’ll include some additional considerations to make below.

Upfront Fees

Solar equipment is expensive everywhere in the US, but that’s especially true in Rhode Island, where the average per-watt price is well above the national average. Every Rhode Island resident will be concerned with the upfront fees, but there are some things you can do to keep your initial investment to a minimum. First, you can choose a solar financing option that doesn’t require a large down payment. Second, you can avoid add-on solar products like solar batteries, which add to your total solar power system expense. Finally, you can choose an affordable solar panel brand.

Payback Period

We mentioned above that the payback period is a great metric for solar viability, and you can also use it to estimate your total return on investment (ROI) when converting to solar power. The average payback period in Rhode Island is 8 years, with a normal range of between 5 and 11 years. If your estimated payback period is above 11 years, your total ROI will be lower than average in your area, although the panels will still likely save you money over time.

Net Metering Policies in Rhode Island

Net metering is a state incentive in Rhode Island, but the buy-back rate isn’t set by the policy. Most electric companies will offer an avoided-cost rate, which is still good but not as appealing as the retail rate. You should check with your electric company before committing and know that you might need to pay extra for a solar battery to eliminate your electric bills if your power provider has a less appealing net metering policy.

Pending Policies & Changes to Incentives

The policies and incentives discussed above are all subject to change as the solar industry continues to grow in Rhode Island. You should check for updates before committing to solar, as incentives could expire, policies could change and new solar rebate programs could appear. It will most often save you more money to convert to solar sooner rather than waiting for better incentives, but it’s worth checking for updates.

Weather & Climate in Rhode Island

Rhode Islanders often worry that the somewhat frequent cloudy weather in the area will destroy solar efficiency and make going solar a poor investment. In reality, the state sees nearly the average number of sunny days per year at 202 annually, which means there is plenty of sun for most Rhode Island residents to benefit from solar panels. Another concern is damage to the panels from the extreme weather that frequents the coastal state, including hurricanes and tropical storms. While these weather events can damage panels, most solar customers don’t experience any major issues. You can choose an installer that offers a good warranty to reduce the risk if you’re still concerned.

Companies Pushing Solar Leases or PPAs

Finally, you should put some time and thought into the solar company you choose to tackle your home solar project. Some companies advertise things like “free panels” or push solar leases or power purchase agreements (PPAs) using other marketing tactics. Solar leases seem beneficial but aren’t as appealing as solar loans. Leases don’t let you take the federal tax credit, they don’t increase your property value and they provide fewer savings overall. Unfortunately, there are even less reliable solar installers in the area, some of which have been reported on by the local news station, NBC 10.⁶ One company, in particular, has been selling solar panels for tens of thousands of dollars, illegally connecting the solar array using another electricians license and failing to finish the job. It’s crucial that you only ever work with a reputable and vetted installation company to avoid any issues or headaches.

Wrap Up: Is Solar Worth it in Rhode Island?

Solar is an outstanding investment for most Rhode Island homeowners, with systems regularly paying for themselves and saving tens of thousands of dollars in energy bills over the lifespan of the equipment. However, converting to solar isn’t ideal or financially wise for everyone, so determining your solar viability is an important first step. Some things you should consider to figure out if solar is right for you include your monthly utility bills, the direction your roof faces, shading on your property, your home’s energy efficiency, and more. We strongly recommend connecting with a reputable solar installer for help figuring out if solar is a good fit for your home.

See also: Calculate how much you can save by going solar

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Read More About Going Solar

• What Are the Best Solar Companies in Rhode Island?
• What Solar Incentives Are Available in Rhode Island?
• Find Cost Savings on Solar in Rhode Island

The cost information presented in this article is derived from a comprehensive analysis, incorporating data from multiple industry sources. The average cost per watt per state was calculated based on figures from Consumer Affairs, Energy Sage, and Berkeley Lab’s Electricity Markets & Policy Department. Additionally, monthly energy consumption and the average monthly cost of electricity were sourced from the U.S. Energy Information Administration, ensuring a well-rounded and accurate representation of the information presented.