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Rhode Island’s new renewable energy laws continue a history of success

Avatar for Ben Zientara
Published on 06/28/2016 in
Updated 03/04/2020


June 28th, 2016

Earlier this month, the Rhode Island Legislature passed an extension of the state’s Renewable Portfolio Standard, which increases the amount of electricity the state plans to get from renewable sources to 38.5% by 2040. It also passed a bill to allow third-party solar financing and virtual net metering. When the bills are signed by the governor this week, there will be some very positive effects on the Rhode Island solar market.

These laws will have a few outcomes:

It is worth noting that the new Renewable Portfolio Standard law also contains a provision allowing the state’s Public Utilities Commission broad authority to delay the new RPS goals indefinitely if they feel that there isn’t enough renewable supply to meet the law’s mandates.

Solar PPAs

Opening the Rhode Island market to leasing is an important step in making sure people with lower incomes can get solar panels on their home and reap the benefits of lower energy bills. A solar PPA is a billing arrangement under which a third party solar company installs panels on a home and sells the homeowner the electricity produced by the panels, usually at a lower rate than electricity from the power company.

Under a PPA, the homeowner puts no money down, but also does not earn any of the tax credits and grants that can offset the up-front cost of the system. Still, electricity in Rhode Island is expensive at $.19/kWh, and a PPA can result in some substantial savings. Our estimate for a Rhode Island solar PPA shows a first-year savings of about $660, with the savings for a 20-year lease totaling nearly $20,000.

“Virtual” net metering

Net metering simply means to get full retail rate credit off your electricity bill for the energy your panels produce. “Virtual” net metering is basically a fancy way of saying “get credit for electricity produced by solar panels that aren’t on your property.”

What this law does is set up a way for people to own a share of a community solar installation, which can be located anywhere in the state, and get that net metering credit off their bill. It makes it easy for groups of people to buy and install solar panels and all reap a little of the benefits. It also makes it easy for a third party to own such a system and sell subscriptions of shares.

Financially speaking, the best part of this is these community solar installations qualify for the state’s Renewable Energy Growth (RE Growth) Program, which means the electricity produced will be bought by the state’s electric utility company, National Grid, for much more than the retail rate. Here are the current rates:

Renewable Energy ClassAnnual Enrollment Target
(Nameplate MW)
Ceiling Price/Standard PBI
(cents/kWh)
Small-Scale Solar – Host
Owned
(1-10 kW DC)
5.537.65
(15-yr Tariff)
Small-Scale Solar – Host
Owned
(1-10 kW DC)
33.45
(20-yr Tariff)
Small-Scale Solar – 3rd
Party Owner
(1-10 kW DC)
28.35
(15-yr Tariff)
Small-Scale Solar – 3rd
Party Owner
(1-10 kW DC)
24.70
(20-yr Tariff)
Small-Scale Solar
(11-25 kW DC)
24.90
(20-yr Tariff)

Those per-kWh payments are almost double the retail price of electricity, so anyone who owns a share of a community solar installation can expect huge monthly benefits!

Multi-family homes in the RE Growth Program

This is a brilliant piece of this law that relates directly to the point above. The RE Growth Program pays solar owners far-above-retail prices for the electricity their systems produce. This new law directs the state’s electric distribution company, National Grid, to establish rules that will govern how people who share a roof in a multi-family housing unit can install solar and benefit from the program.

The rules have yet to be established, but it looks like people in this kind of situation will be eligible for the same bill credits as everyone else.

The Rhode Island Renewable Fund

The Rhode Island Renewable Fund is an excellent program of grants for any person or business in the state who wants to install solar. The current program provides grants of $1.15 per watt for small scale solar projects, which reduces the up-front cost of solar by over 25%.

The bill just passed (PDF) by the legislature ensures that this excellent program will continue to offer grants that offset some of the initial cost of going solar. For that, and for the other provisions in this bill, we give the legislature a great big thumbs up.

Last modified: March 4, 2020

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