Commercial Solar Power: Solar Power Financing OptionsFederal Solar Tax Credits > Massachusetts Commercial Solar Incentives > Rhode Island Commercial Solar Power Incentives


Rhode Island Supports Solar Power

Rhode Island ranks as the smallest state of the 50 by area, and the 44th lowest by population. However, the state is fast becoming recognized as place for clean energy growth. As of the end of 2018, the state ranked 37th in the nation for solar energy capacity, surpassing its stature for size and population. In 2017, the governor announced programs aimed at significantly accelerating the adoption of clean energy, including pushing far beyond the 100 MW installed solar power capacity, to reach a total renewable energy capacity 1,000 MW by 2020.

Because the state is small, there is less available unused land and all land comes at a greater premium. One remedy to this problem comes from enacting a brownfield policy for larger solar energy systems.

The governing policy requiring utilities and other state retail electricity providers to supply a minimum level of renewable energy is the state Renewable Energy Standard (RES). Established in 2004, the RES was amended in 2014 to its current form requiring power producers and distribution companies to supply 38.5% of their retail electricity sales from renewable resources by 2035.

As of 2019, the policy requires that RI derive 14.5% of the electricity sales from renewable source, escalating 1.5% each subsequent year to arrive at the 38.5% target by 2035.

To further encourage large scale solar energy project development, Rhode Island instituted two additional and substantial state programs. One is in collaboration with the utility National Grid, and the other a purely state funded program.

The Rhode Island Renewable Energy Fund

The Rhode Island Renewable Energy Fund (REF or RIREF) is a grant program using public benefit funds supported by a surcharge on electric and gas customers’ bills. Administered by the Rhode Island Commerce Corporation (Commerce RI), the program operates on a first come first served basis. Grants are administered in blocks, with a limited offering of blocks each calendar year. For example, in 2019 homeowners investing in solar energy systems can apply in January, June, and September of that year.

The grants are distinguished by direct ownership – through a purchase or financing – and third party ownership – via a lease or PPA. For direct ownership, the grant currently pays on a graduated scale. The first 50 kW is allowed $0.75 per Watt, and every 50 kW at 150 kW total capacity and above is allowed $0.20 per Watt. The program limits any single project to a cap of $80,000 total. Mathematically that cap is reached for systems of approximately 188 kW in size, however the state does not impose a capacity limit, only a grant limit. So a larger system is still eligible for the $80,000 cap.

The Rhode Island Renewable Energy Growth Program

The Renewable Energy Growth (REG) program was created as an alternative to the RIREF program. Where the grants are paid up front, the REG is designed to provide ongoing cash flow that can be used to offset the cost of the solar energy system installation.

Its goal is to promote installation of grid connected renewable energy within the load zones of electric distribution companies at a reasonable cost.

In 2017, state lawmakers extended the program to end in 2029, and targeting an additional 400 MW qualifying renewable energy capacity between 2020 and 2029.

In Rhode Island, currently National Grid offers the REG incentive for three levels of commercial power systems, each with independent annual limits and
payments. Contact us to get more details:

  • Medium-Scale solar 26 – 250 kW
  • Commercial-Scale solar 251 – 999 kW
  • Large-Scale solar 1,000 kW – 5,000 kW

Net Metering

The state of Rhode Island also offers a net metering program for solar energy systems designed to generate up to 100% of the electricity that a facility uses. The net metered systems size must be sized to produce no more than an average of previous or forecast three years of annual consumption of the energy at the account.

As the solar array produces electricity it will first be used within the building. Any excess or unused electricity flows backwards through the utility meter, into the
grid. At night, or during other periods of low solar production, electricity will flow from the grid into the home to meet electrical demand. When you produce more than you consume you build up (kWh) of credit. When you consume more than you produce, you use up kWh of credit. Each month your utility will total the kWh supplied from the grid and the kWh generated by solar energy and fed back to the grid. Some months will see an excess of solar generated energy, for example in the middle of the summer. Other months may see a greater amount of energy supplied from the grid, for example in the middle of the winter. Any excess solar generated energy is valued at the same retail rate as the grid supplied energy.

Also at the end of each month, the utility allows a credit whenever the next solar generated power is higher than grid supplied – called Net Excess Generation (NEG) – limited to 125% of the actual electricity usage during that billing period. That NEG may be carried over into future billing periods or paid, that choice being up to the utility. NEG is reimbursed at an avoided cost rate, lower than the retail rate, which varies over time.


Commercial Solar Power: Solar Power Financing OptionsFederal Solar Tax Credits > Massachusetts Commercial Solar Incentives > Rhode Island Commercial Solar Power Incentives