After the Rhode Island State Legislature axed the state income tax rebate for home solar installations in 2010, residential installations plummeted. A new grant and low-interest loan program has the state’s solar industry humming again, however.
Rhode Island’s Renewable Energy Fund implemented a small-scale solar program earlier this year and has made more than $500,000 in grants and loans to solar installers and affordable housing developers. These grants and loans have been made possible by the $2 million a year in surcharges that all electric ratepayers in the state must pay into the fund.
While the fund has been in existence for years, in the past, its primarily helped finance larger commercial- and utility-scale solar installations. It wasn’t until 2013 that the state earmarked some of the money for solar photovoltaic and solar hot water projects of no more than 10 kilowatts or roughly 160 square feet of solar hot water collectors.
The program’s first year has proven successful, with grants of up to 25 percent or $10,000 for a single project and low-interest loans of up to 50 percent or $20,000. In total, the program has helped to fund 89 residential solar PV and solar hot water installations. All together, these projects total about $2.1 million, according to an article published in the Providence Journal.
This funding is helping to make solar projects even more attractive to homeowners, who can presently also take advantage of a 30 percent federal tax rebate when they install rooftop solar systems. The federal rebate is slated to stay in place through 2016.
While the cost of solar panels has dropped dramatically – nearly 70 percent in the last three years – payback periods without additional incentives tend to be longer than a lot of homeowners want, according to Rhode Island installers.
Grants and low-interest loans reduce the overall costs of solar installations and make it easier for homeowners to recover their investments in shorter periods of time.
The Providence Journal talked with one homeowner who expected to recover his investment in a solar hot water system within six years. Another homeowner said the subsidy from the state renewable energy fund would slash his payback period from 15 years to eight. Sol Power, a small Providence-based solar company, is installing three systems with additional funding from the subsidies.
“It’s pretty much turning this into a viable industry,” Sol Power Owner Eric Beecher told the Journal. “Without the subsidy, we probably wouldn’t exist."