Net Metering in Rhode Island: How It Works and What Homeowners Should Know

Rhode Island is a small state with a big electricity problem. Residential rates here consistently rank among the highest in the country — around $0.29–$0.30/kWh as of 2026, roughly double the national average — and those rates have been climbing for years. That makes solar genuinely attractive on the numbers, and net metering is a central part of why.

Rhode Island's net metering program is solid, though it changed in 2023 in ways worth understanding. There's also an active state policy review due to report this fall that homeowners should be aware of. Here's a clear breakdown of how net metering works in Rhode Island, what your credit rate actually is, and what the key decision is for homeowners evaluating solar right now.

What Is Net Metering?

Net metering is a billing arrangement between you and your utility. When your solar panels produce more electricity than your home is using at a given moment, the surplus flows to the grid. Net metering determines how much credit you receive for it.

Under a full 1:1 net metering program, you earn credit at the same rate you'd pay to buy electricity. Rhode Island's program for new systems is close to that — but not quite. Since April 2023, new residential solar customers receive credit for exported power at 80% of the retail rate. With RI Energy's current rates running approximately $0.29–$0.30/kWh, that works out to roughly $0.23–$0.24/kWh for exported electricity.

That's still among the more valuable net metering credit rates in the country in absolute dollar terms, precisely because Rhode Island's electricity is so expensive. A credit worth $0.23–$0.24/kWh is significantly more valuable than a $0.14/kWh credit in a lower-rate state, even if it's technically 80% of retail rather than 100%.

One important nuance: the 20% reduction applies only to electricity you export to the grid. Power your solar panels produce and your home consumes directly — offsetting what you'd otherwise buy from RI Energy at full retail — still carries full value. Self-consumption remains a 1:1 offset. Only the excess that flows out to the grid is credited at 80%.

How Net Metering Works in Rhode Island

Rhode Island's net metering program is governed under R.I. Gen. Laws § 39-26.4-2 and administered through RI Energy (formerly National Grid). Here's how the mechanics work in practice:

Monthly credit banking. When your panels overproduce in a given month, credits accumulate on your account at 80% of the retail rate. Those credits roll forward month to month and apply against future bills.

Annual true-up. Credits bank throughout the year. At the end of the annual billing cycle (March for RI Energy customers), any unused credits remaining in your account are paid out at the wholesale avoided-cost rate — typically $0.03–$0.05/kWh. The same dynamic applies here as in other states: banking credits for seasonal use is valuable; carrying a large balance to the annual payout is not, since the cashout rate is a fraction of the credit rate.

System sizing cap. Rhode Island allows net metering for generation up to 125% of your on-site annual consumption. This is a somewhat generous cap — most well-designed systems target close to 100% of consumption anyway — but it provides some headroom for homeowners with growing energy needs or those adding an EV.

Program cap. Rhode Island's net metering program has a statewide capacity limit of 275 MW. As of mid-2026, that cap is nearly fully subscribed, though residential and small commercial customers can still participate. This is worth confirming with your installer, as the availability picture may shift.

Protection through 2039. State law currently protects net metering availability through 2039 — a longer statutory horizon than most states offer. That said, "protected through 2039" means the program must exist, not necessarily at today's credit rate. Policy reviews can and do alter credit terms within that window, as the 2023 reduction demonstrated.

Which Utilities Offer Net Metering in Rhode Island?

The vast majority of Rhode Island residents are served by RI Energy, the state's dominant electric distribution company and the utility whose rates and programs this post primarily addresses.

Two smaller utilities serve limited areas of the state:

• Pascoag Utility District — serving the Pascoag area in the northwestern corner of the state. Pascoag offers its own net metering program; credit rates differ from RI Energy's. Contact Pascoag directly to understand current terms.
• Block Island Power Company — serving Block Island. Block Island has its own unique rate structure and energy programs given its island grid. If you're on Block Island, your solar economics are governed by a different framework entirely and worth a direct conversation with the utility.

For the roughly 90%+ of Rhode Island households served by RI Energy, the program described in this post applies.

The Biggest Decision Rhode Island Homeowners Face: Net Metering vs. REG

This is where Rhode Island is genuinely different from most states in the country — and it's the most important thing a homeowner evaluating solar here needs to understand.

Rhode Island offers two separate paths for solar compensation, and you must choose one. You cannot combine them on the same system. The choice is binding for the life of the system or program term.

Path 1: Net Metering + REF Grant

Under this path, your system earns net metering bill credits as described above — 80% of retail rate (~$0.232/kWh) for exported electricity — and you may be eligible for an upfront cash grant through the Renewable Energy Fund (REF) program.

The REF grant, administered by RI Commerce Corporation, pays $0.65 per watt of installed capacity, capped at $5,000 per residential system. For a typical 8–10 kW system, that's a meaningful upfront offset. The grant must be applied for before your system receives Permission to Operate from RI Energy — you're no longer eligible once interconnection is complete.

This path makes the most sense for homeowners who want simplicity: your savings show up directly on your utility bill as reduced charges, the grant provides a one-time upfront benefit, and the net metering credit structure is straightforward.

Path 2: REG Program (+ REF Grant Ineligible)

The Renewable Energy Growth (REG) program, administered by RI Energy, takes a different approach. Instead of bill credits, REG pays you a fixed rate per kWh for every kilowatt-hour your system produces — regardless of whether you use it on-site or export it — for either 15 or 20 years.

The 2026 REG rate is approximately $0.2723/kWh for the full contract term, locked in at enrollment. For an average 8 kW system producing roughly 9,700 kWh/year, that works out to approximately $2,640/year in REG payments — a separate check from RI Energy, distinct from your electricity bill.

Critically, REG and net metering operate independently. An REG customer still uses electricity from the grid when their panels aren't producing and is billed for it at retail rates — but the REG payments are a standalone income stream that, in many cases, more than offsets that cost.

One important caveat: REG enrollment opens annually on April 1 on a first-come-first-served basis, and the annual residential allocation (approximately 40 MW) has historically filled within weeks. If you miss the enrollment window or the cap fills before your application is submitted, you'd default to net metering for that year. Planning your system installation timeline with REG enrollment in mind is essential if that's the path you want.

If your installer needs to submit a REG application, having your system designed and contracted well before April 1 is the practical requirement.

For a full comparison of which path makes more sense for different household situations — and how to think about REG vs. net metering given your usage, system size, and timeline — see our Rhode Island Solar Incentives guide.

The Regulatory Picture: Policy Review Due October 2026

Rhode Island's net metering program is protected by statute through 2039, but that doesn't mean the terms are frozen. The 2023 reduction from 1:1 to 80% of retail was exactly that kind of in-program adjustment — the program continued to exist, just at a lower credit rate.

In February 2026, Governor McKee signed Executive Order 26-01, which directed the Office of Energy Resources (OER) to complete a formal review of net metering and the REG program and deliver findings to the Governor's Office no later than October 1, 2026. The executive order cited Rhode Island's high electricity rates and noted that roughly a quarter of the average resident's electricity bill is attributable to state programs including net metering.

This is an active review, not an adopted change. No modifications are currently in effect, and the 2039 statutory protection provides a floor. But the pattern in other states — Massachusetts, California, Illinois — is that policy reviews of this kind do result in credit rate adjustments, often reducing the value of net metering exports. Rhode Island already went through one such adjustment in 2023.

The 2039 protection date is often cited as a reason for long-term confidence in Rhode Island's program, and that confidence is largely warranted. But it's a reason to understand current terms and what "protected" actually means — not a guarantee that today's 80% credit rate is permanent.

Net Metering and Battery Storage

Connecticut and Massachusetts have battery demand-response programs that pay solar-plus-storage customers to discharge during peak grid events, and Rhode Island has something comparable: ConnectedSolutions, administered by RI Energy.

ConnectedSolutions pays battery owners for allowing RI Energy to draw from their stored energy during peak demand events, typically summer afternoons. Payments run approximately $225 per kW of battery capacity enrolled annually — a separate income stream that operates independently of both net metering credits and any REG payments. For a typical 5 kW battery, that works out to around $1,125 per year in demand response payments.

One caveat worth noting: the ConnectedSolutions program has received regulatory approval through 2026, and incentive levels beyond that period are subject to review and approval. Participants who enrolled before June 2024 are locked in at a higher $400/kW rate for five summers; those enrolling now are at $225/kW, with the post-2026 rate still to be determined. Your installer can confirm the current program status at the time of your installation.

A battery also changes the net metering math in a useful way: rather than exporting surplus midday at 80% of retail and buying back from the grid at night at full retail, a battery captures that midday surplus and deploys it in the evening. You're effectively converting an 80-cent credit into a full-dollar offset. At Rhode Island's high rates, that self-consumption premium is meaningful.

A Note on System Sizing

Rhode Island's 125% sizing cap is more generous than most states, but the annual true-up dynamics still argue against deliberate oversizing. Credits that remain unspent at the end of the billing year are paid out at wholesale avoided-cost rates of $0.03–$0.05/kWh — while replacement power from RI Energy costs roughly $0.29–$0.30/kWh at retail. Excess exports beyond what you'll realistically use are a poor trade on the margins.

The right target is a system sized to offset close to your actual annual consumption, maximizing the value of both self-consumed power (full retail offset) and net metering credits (80% of retail) while minimizing the surplus that ends up in a low-value annual payout.

The Bottom Line

Rhode Island's net metering program, at 80% of retail credit for new systems, isn't as strong as it was before April 2023 — but at $0.23–$0.24/kWh in absolute terms, it's still one of the more valuable export credit rates in the country, driven by the state's high electricity prices. The statutory protection through 2039 provides more long-term certainty than most states can offer.

The more important feature of Rhode Island's solar landscape is the choice between net metering and the REG program. For many homeowners, REG is the financially stronger path — but it requires planning around the April 1 enrollment window and annual capacity caps. That's the decision worth spending the most time on when evaluating solar here.

The OER policy review due October 1, 2026 is worth watching, particularly for homeowners who are still in the evaluation phase. Rhode Island has already reduced net metering credits once; a second adjustment following this review is possible. Homeowners who interconnect under the current terms are on whatever rate structure applies at their interconnection date.

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Lunex Power installs solar panel systems and home battery storage across Rhode Island, Massachusetts, Florida, Connecticut, Colorado, North Carolina, and South Carolina. Get a free quote to see what solar looks like for your home.