Solar Power Becoming Better Bargain in Rhode Island
October 11, 2014
NORTH SMITHFIELD, R.I. — Solar energy is becoming a better bargain in Rhode Island, as the costs for home systems are on par with Massachusetts, one of the top states for solar energy in the country.
In both states, incentives cover 50 percent or more for new solar panel installations, just as the cost for panels has declined in recent years.
Currently, the average solar-electric system for a home costs between $12,000 and $17,000 — after all of the incentives are applied. That is still a pile of cash, but, unlike some home improvements, a renewable energy project repays itself and continues to deliver savings after the payback period.
A 30 percent federal tax credit is available for solar on primary and secondary residences, as well as businesses. State grants through the Renewable Energy Fund offer another 30 percent to 40 percent cost reduction.
Rhode Island’s distributed generation (DG) program will soon offer fixed energy-purchase pricing for 15-20 years. It’s more complicated than the grants and tax breaks, but the program provides another tool for making solar a money-saver.
A new state marketing program called Solarize Rhode Island reduces installation costs by about 20 percent. It also comes with local tax breaks.
Through a combination of these incentives, new solar panels pay for themselves in seven to eight years, according to installers. Although their value depreciates slightly each year, a solar system offers a continuous return on investment during the life of the solar panels, which is an estimated 25 years.
The payments arrive in the form of credits on your monthly electric bill. New solar systems are built to match a home’s electricity consumption. A new solar PV system provides onsite electricity while excess flows back into the power grid. The utility company — in Rhode Island’s case National Grid — must pay for the electricity. The owner of the PV solar panels is compensated by receiving a smaller electric bill.
A California study also shows that homes with solar panels sell at a premium compared to homes without.
Solar panels have no moving parts. Occasional cleaning is needed to remove dust and debris. Snow may also require removal. Because the panels are dark, pitched and coated in glass, snow generally doesn’t stick. A typical warranty covers the life of solar panels.
In 2013, the General Assembly approved the Property Assessed Clean Energy (PACE) program. Details are still being worked out, but PACE allows property owners to pay for a solar project in the same way they pay property taxes. The main benefit: any unpaid balance transfers to a new owner if the property is sold. This allows the sellers and buyers to equally share in the costs and benefits of a solar-energy system. The payments can also be spread across 20 years.
Each city/town council must approve the program. So far, 31 states have adopted PACE legislation. In Rhode Island, East Providence was the first community to approve the program.
Admirals Bank, which has a regional banking center in Providence, also offers loans up to $25,000 for solar projects.
Solarize Rhode Island
This program, a town-by-town marketing push to install solar panels on homes and businesses through mailers and meetings, allows residents in a host community learn about discounts on hardware and installation costs, and about a 20-year property-tax exemption for the solar system.
On Oct. 10, North Smithfield became the first Rhode Island municipality to launch Solarize. Little Compton and Tiverton will join in November. Nearly 50 communities in Massachusetts and more than 40 in Connecticut have been through the 12-week solar push. The results in Connecticut are significant: In 20 weeks, the Solarize program doubled the amount of solar capacity in the state. The previous solar threshold took six years to reach.
The recent Rhode Island launch took place at National Marker Co. (NMC), which is installing a 214-kilowatt rooftop solar array. The North Smithfield company’s president, Michael Black, said he wanted the first Soalrize project in hopes of inspiring others.
Brian F. Keane, president of SmartPower, the group that manages Solarize initiatives, said solar energy gains traction in a community when residents see and talk about it. “They’ll buy solar when their friends and family buy solar,” he said.
Colorado-based RGS Energy was selected as the exclusive contractor for the Solarize program in North Smithfield. The company has been the installer of choice for many Massachusetts and Connecticut Solarize rollouts.
Join the DiscussionView Comments
Your support keeps our reporters on the environmental beat.
Reader support is at the core of our nonprofit news model. Together, we can keep the environment in the headlines.