Michael Justin Magbago / Getty Images
Michael Justin Magbago / Getty Images
Like many states, Rhode Island has embraced solar energy over the past several years. Why? Because installing solar panels on your home can earn big energy savings and reduce your carbon footprint, among other benefits.
Are you wondering whether solar is worth it? Keep reading to learn more about solar panels in Rhode Island and whether they’re the right choice for you.
The cost of a residential solar panel system in Rhode Island depends on various factors, including the size of your system, the components included, labor and local permitting costs, and more. In general, a solar panel system will cost between $3 and $5 per watt. For the average 5-kW system, you can expect to pay anywhere from $15,000 to $25,000 before tax credits, rebates, and other financial incentives.
Remember that one of the most important factors that determine your solar system cost is the components included. Here are a few staple components included in many residential solar systems:
Solar panels may be expensive, but there are plenty of federal, state, and local initiatives in place to help reduce the cost burden.
The federal government has a solar panel tax credit that allows you to claim 26% of your total solar panel cost. You can claim this credit when you file your annual tax return. Keep in mind that this credit is temporary, so sooner is better if you’re considering a solar panel purchase.
Additionally, Rhode Island has some initiatives in place to help you save on your solar panel purchase. First, the state offers a sales and use tax exemption on renewable energy products. This exemption means you won’t have to pay sales taxes on your solar panel purchase. And thanks to the state’s property tax exemption, your property tax bill won’t increase due to the increase in the value of your property.
Other initiatives in Rhode Island that make solar panels more cost-effective include:
Buying solar panels doesn’t just give you access to tax credits and incentives to reduce your out-of-pocket costs. Your solar panels will also save you money on electricity.
Let’s say you purchase a solar panel system for $15,000. First, you could claim the federal tax credit, which will save you $3,900. Next, you’ll save money on your electricity bill. The average electricity bill in Rhode Island is around $110 per month, so the average customer could save around $1,320 per year. Between the tax credit and the energy savings, you would reach the return on your investment (ROI) in less than 8.5 years. After that, your solar panels would essentially earn you pure savings.
Here’s how those numbers would work out in the example scenario above:
|Initial Investment||Years to get ROI||Savings per year after ROI||Savings 5 years after ROI|
One of the tremendous benefits of investing in solar panels is that you can achieve energy independence. Energy independence is when you aren’t as reliant on the traditional electricity grid to power your home.
For example, when there’s a storm in the area, or a power line goes down, many residents may lose their power. But if you have a solar battery as part of your solar energy system, you can continue to temporarily power your home.
Another benefit of energy independence is financial savings. During months of the year when electricity demand is higher — think of the winter and summer when there are extreme temperatures — energy prices increase. When you are energy independent, you wouldn’t be vulnerable to sudden energy price hikes.
And in addition to powering your own home, energy independence can allow you to save money by earning credits by selling excess energy back to the power grid.
Solar panels are an investment, and some research is crucial before you take the leap. To learn more, you can contact Choose Energy at the number on the screen or visit our library of educational resources about solar energy.
As you research your solar panel options, be sure to consider whether they’re suitable for your home. First, consider whether your roof is well-suited to solar panels. Is it an older roof that will need to be replaced soon? Is it covered mainly by shade? In those situations, solar panels may not be the right choice.
It’s also important to consider how long you plan to live in the home because it may take several years to see a complete financial return on your solar panel purchase.
Finally, consider your neighborhood. Some homeowners associations have restrictions around the installation of solar panels or may require approval before installation.
Rhode Island’s solar policies date back to the 1980s and 1990s, when the state first started enacting legislation to encourage solar panel use. But compared to other states, solar power in Rhode Island didn’t become prevalent until more recently.
Today, Rhode Island’s solar energy generation is impressive. The state ranks 29th in the nation for solar energy generation, which says a lot considering its size. The state currently gets 7.81% of its electricity from solar power, which is enough to power nearly 76,000 homes. The state has enjoyed an increase in residential, commercial, community, and utility solar installations over the past few years.
Solar energy is also impacting Rhode Island’s economy. Currently, there are 30 solar companies in the state that employ more than 1,000 workers.