With small size but ample sun, Rhode Island is poised to be a leader in solar energy adoption. The Ocean State already generates over 11% of its electricity from solar panels, and with equipment costs continuing to fall each year, now is the time for residents to consider making the switch themselves.
In this comprehensive guide, we will analyze all the key factors Rhode Islanders need to evaluate when looking into solar panels, including:
- Detailed breakdown of purchase and installation costs
- Projected electricity savings and payback periods
- Proper solar system sizing based on home energy use
- Comparisons of ownership models: purchase vs. lease
- All local and federal incentive programs
- Interviews with RI solar experts
- Advice from RI homeowners who‘ve gone solar
Whether you‘re just starting your solar research or ready to take the plunge, read on to make sure you maximize savings and choose the best solar solution for your home.
Rhode Island‘s Solar Landscape: By the Numbers
Before digging into costs and logistics, let‘s set the backdrop on where Rhode Island‘s solar industry stands today:
- 667 MW of total installed solar capacity as of Q1 2022 [1]
- Over 11% of the state‘s electricity now comes from solar
- 21,894 solar installations statewide [2]
- Ranks #2 in New England for solar adoption per capita [3]
To put Rhode Island‘s solar expansion into perspective, the state had virtually no large-scale solar generation as recently as 2016. But thanks to plunging solar panel prices and supportive state policies, the industry has grown at a rapid clip with no signs of slowing.
Rhode Island‘s small size, sunny climate, and high electricity rates create prime conditions for solar adoption. And national trends show costs continuing to fall each year, meaning 2023 is shaping up to be the best year yet to go solar if you live in the Ocean State.
Cost of Solar Panels in Rhode Island
The most common question from prospective solar customers always centers on cost. So let‘s analyze the key price points for solar panel systems in RI.
Statewide Average Costs
Across all of Rhode Island, the average cost falls around:
$2.69 per Watt
That equates to about $16,140 for a typical 6 kW residential system.
Of course, costs can fluctuate across different counties and cities due to factors like equipment used, hours of peak sunlight, installer pricing, and more. We’ll analyze some of those local cost variations later on.
First, it helps to understand the key components that factor into that statewide average pricing:
Solar Panel System Cost Breakdown
- Equipment – $9,000
- Inverter – $2,000
- Installation Labor – $3,500
- Permits & Other Soft Costs – $1,640
Total (6 kW system) – $16,140
You can already see equipment is the biggest line item, followed by installation labor.
And here is how that $16,140 cost stacks up nationally:
| State | Avg. Cost per Watt |
|---|---|
| U.S. National Average | $2.77 |
| Rhode Island | $2.69 |
| Connecticut | $3.28 |
| Massachusetts | $3.15 |
So you can see Rhode Island comes in below average pricing compared to the rest of the U.S. and is the 2nd most affordable solar option in New England.
This competitiveness combined with ample sun hours gives the Ocean State a prime solar value proposition.
How Much Solar Do Rhode Island Homes Need?
Now that you know average pricing, the next key question is:
How many solar panels or how large of a system do I need for my home?
This calculation will be different for every Rhode Island household based on two main factors:
- Your home‘s energy usage – Measured in kWh/day
- Amount of peak sun hours – Differs across RI locales
Let‘s walk through an example using state averages:
- Average RI home energy usage: 19.8 kWh/day
- Average RI peak sun hours: 4.23 hours
Solar System Size Formula:
Home kWh Usage ÷ Peak Sun Hours = kW System Size
Plugging in the numbers:
19.8 kWh ÷ 4.23 hours = 4.68 kW
So the average Rhode Island home would need roughly a 4.7 kW solar system.
At $2.69/Watt, a 4.7 kW system would cost around $12,643 before incentives. We‘ll get into how incentives can help reduce costs later on.
Now the key next step is to calculate your own home‘s specific energy usage and sunlight totals rather than relying on state averages.
You can access your usage details from past electric bills. And you can find peak sunlight hour data for your town here.
This will give you the most accurate system size and cost estimate.
And remember, you can always start smaller if needed to meet your budget and expand over time. Even a 2-3 kW system can produce solid savings.
Understanding Your Electric Costs
To determine potential bill savings from solar panels, we first need to understand Rhode Island‘s overall electricity costs.
The state ranks:
- 3rd highest electricity rates in the continental U.S.
- Residents pay roughly 23.35¢ per kWh
And even though Rhode Island has the 6th most energy efficient homes nationally, bills still end up on the higher side at around $1,664 per year for the average household.
With high and rising utility costs, solar panels can provide electricity insulation along with environmental benefits.
Solar Panel Payback Period in Rhode Island
Now for the magic number prospective solar customers want to know:
When will my solar panel system pay itself off through electricity savings?
Also referred to as the payback period, let‘s run the numbers for Rhode Island:
- Average system cost: $16,140 (using our 6 kW example)
- Avg. annual electric bill savings: $1,664 (statewide average)
$16,140 system cost ÷ $1,664 annual savings = 9.7 years
So the average payback period for a solar system in Rhode Island falls just under 10 years.
That‘s well below the 20-25 year expected lifespan of a panel system.
And that 9.7 year time period is already on the conservative side given it relies on statewide averages.
Payback period can easily fall below 8 or even 7 years for Rhode Island homeowners depending on:
- Your actual electric costs
- If you quality for incentives (covered next)
- Your hours of peak sunlight
For example, residents in sunnier South Kingston can expect closer to 7 year payback.
Either way, you can see with a decade or less to repay the system, substantial net savings last through the rest of the panels‘ 25 year life.
Rhode Island Solar Incentives
Rhode Island homeowners can take advantage of a suite of incentives to reduce solar installation costs.
Let‘s analyze the top programs.
Federal Solar Tax Credit
The federal solar tax credit offers a 26% credit for systems installed in 2023. This applies directly against your tax bill.
- For a $16,140 system, that would amount to $4,196 in savings
- Drops to 22% credit in 2024
So acting sooner rather than later maximizes federal credit savings.
Net Metering
Rhode Island has mandatory statewide net metering. This allows solar homeowners to accumulate bill credits for any excess power fed back to the grid.
Most Rhode Island residents with solar panels produce more than they consume during sunnier times of year. So net metering becomes an added value.
You can even opt for monthly cash payouts from the utility rather than carrying forward bill credits indefinitely.
Property Tax Exemption
RI offers 100% property tax exemption on the value solar panels add to your home. Saves you having to pay increased taxes.
Renewable Energy Growth Program
Additional financial incentive offered to Dominion Energy customers installing new solar arrays larger than 25 kW.
Incentive payments based on the size of your system. Can yield thousands in extra savings.
Check your eligibility through Dominion or an installer.
Ownership Options: Purchase vs. Solar Leasing
When going solar, you‘ll also need to decide between purchasing a solar system outright vs. leasing from a solar provider.
Let‘s compare the two paths in Rhode Island:
Solar Panel Purchase
- Higher upfront cost
- Qualify for full federal tax credit & additional incentives
- Full ownership provides greater long term savings
- Owning solar adds value when selling home
- Ideal option if planning to stay in home over 10 years
Solar Leasing/PPA
- Little to no upfront cost
- Leasing company owns system
- Fixed monthly payments typically save 5-15% on electric bills
- Best if moving sooner than 10 years (can transfer lease)
- Miss out on some tax & incentive programs
As you can see, purchasing makes the most financial sense if you plan to stay in your home long enough to reap savings beyond the payback period.
But solar leases can provide immediate savings if you want to avoid initial costs. Just be mindful that long term savings will be lower without ownership.
Going Solar in Rhode Island: Homeowner Case Studies
Now that we’ve covered all the key bases on costs, sizing, and incentives around going solar in Rhode Island, let’s look at real-world examples from homeowners in the state who have made the transition:
Sarah D., South Kingstown
- Installed 5.2 kW system in 2021
- Used combination of incentives to reduce net cost to $8,900
- Gets cash payouts from utility for excess power to grid
- On track to hit 6-7 year payback period
- “Best home upgrade I‘ve made. Solar was easier and more affordable than I realized.”
Mark R., Providence
- Went with a leased 6.4 kW system in 2020
- Little upfront costs beyond permitting fees
- Saves $100 a month over previous electric bills
- Monthly lease payment increases 2.9% yearly
- Downsizing to smaller home in 2025 but can transfer lease
You can see even within the same small state, the optimal solar solutions can vary depending on individual home factors.
But with proper planning and education around the incentives and ownership models available, every Rhode Island home can find a suitable solar fit.
Expert Solar Guidance for Rhode Island Homeowners
To supplement my own knowledge as an analyst reporting on solar trends and best practices, I interviewed two solar installation professionals based in Rhode Island to offer their expert recommendations for local homeowners mulling over solar:
Sharon Kelley, SunLight Solar Energy
"Rhode Island‘s approach to renewable energy has made our solar market thrive compared to other states. My guidance for homeowners is not to get overwhelmed researching every detail before going solar. There are reputable local installers like us who can assess your home, crunch the numbers tailored to your situation, explain all the incentive programs, and make sure you maximize long term savings according to your personal financial goals."
Rachel Hill, Apex Solar Power
"I always remind Rhode Island homeowners not to have ‘analysis paralysis‘ and overthink solar. Between federal tax credits, net metering, and the various state incentives, you can literally cut the out-of-pocket costs for equipment and installation in half right off the bat. And the systems are warrantied to perform for decades while utility rates continue rising. If you have an older roof, you can even look into our roof solar shingle products to solve two needs at once. The sooner you go solar, the quicker the payback and long term savings."
Solar Panel Costs: Outlook For Coming Years
Midway through our solar analysis, you may be wondering why now is encouraging time act for Rhode Islanders gauging home solar options as opposed to further down the road.
Doesn‘t it always make sense to wait as technology improves further and prices drop?
In the case of solar panels, equipment costs have already fallen dramatically over the past 10-15 years as manufacturing has scaled, efficiency risen, and supply chains matured. And projections show that while modest system pricing declines will continue, we are unlikely to see the drastic drops of solar‘s early growth years.
Panels and auxiliary solar equipment are increasingly commoditized and affordable. Thus the focus now falls more on streamlining soft costs like customer acquisition, permitting and labor rather than radical technological innovations to yield major hardware discounts.
In a 2021 market survey, 78% of solar industry experts predicted less than 10% system cost reductions over the next five years. And 41% expected costs to remain relatively flat nationwide [4].
Couple modest projected cost declines with tax credit phaseouts, incentive expirations, and the possibility of rising electric utility rates, and all arrows point toward prudent Rhode Island homeowners moving forward with solar installations sooner rather than later.
Key Takeaways on Rhode Island Solar Panels
After a deep analysis on every critical solar consideration for Rhode Island homeowners, let‘s drive home the key takeaways:
💡 With 667 MW of installed capacity, over 11% Rhode Island‘s electricity already comes from solar
💡 Costs average $2.69 per Watt – that‘s $16,140 for a 6 kW system
💡 Properly size your system based on home energy use and peak sun hours
💡 Payback solar panels in fewer than 10 years with incentives
💡 Federal tax credit covers 26% of costs thru 2023 then drops yearly
💡 Net metering, property tax exemptions & other programs boost ROI
💡 Both purchase and leased solar options can yield solid savings
So for all Rhode Islanders debating whether 2023 is the year to pursue residential solar – the resounding answer based on the economics is yes.
Reach out to local solar providers for custom estimates. And leverage the robust incentive programs while they remain strong to maximize your long term solar savings.
