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A Small State with Big Solar Incentives

Rhode Island gains incentives through two programs: The Renewable Energy Growth Program (REGP), and The Renewable Energy Fund (REF). The REGP enables costumers to sell their generation at fixed prices if they meet a specific output requirements. The REF is a specific fund that is only available for application for a small time every year, however it is still worth it to ask your Solar Energy Consultant if you’re available to apply.

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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. But in order to meet the goals of 1,000 MW, residential and commercial rooftop solar power continues to be highly important.

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 sources, escalating 1.5% each subsequent year to arrive at the 38.5% target by 2035.

To further encourage solar energy project development, Rhode Island instituted two additional and substantial state programs. The Renewable Energy Fund (REF) and the Renewable Energy Growth (REG) Programs.

The Rhode Island Renewable Energy Fund

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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 for small-scale projects suitable for homeowners 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 pay $0.90 per Watt, with a cap of $7,500 total. Mathematically that cap is reached for systems of approximately 8.3 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 $7,500 cap.

The Rhode Island Renewable Energy Growth Program

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The Rhode Island 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.

Currently, National Grid offers the REG incentive for small scale systems aimed at homeowners investing in solar power (less than 25 kW). It also distinguishes between direct and third party ownership. The program offers 15 and 20 year options, with a ceiling price ranging from $0.375/kWh (direct ownership, 15 year term) to $0.247 (third party owned, 20 year term). The program is capped at 5.5 MW of added solar power capacity annually.
JUN 2019

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 home 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 in the home. 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 homeowners 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.