Solar power in Rhode Island has become economical due to new technological improvements and a variety of regulatory actions and financial incentives, particularly a 30% federal tax credit, available through 2016, for any size project. A typical residential installation could pay for itself in utility bill savings in 14 years, and generate a profit for the remainder of its 25 year life. Larger systems, from 10 kW to 5 MW, receive a feed-in tariff of up to 33.35¢/kWh.
Due to the state's small size and comparatively low insolation, solar installations are limited to predominantly rooftop and megawatt scale installations. Approximately 23% of electricity used in Rhode Island could be provided from rooftop solar panels. A 10 to 15 MW photovoltaic power plant is planned for a former landfill in East Providence.
The Government of Rhode Island has taken a variety of actions in order to encourage solar energy use within the state. Nineteen schools have installed a 2 kW or larger solar panel that can be monitored on the Internet, similar to the programs in Australia and New Zealand. A variety of solar arrays have been installed at state facilities, which can also be monitored.
The state has a net metering program that allows installations of up to 5 MW of on-site electrical generation to continuously roll over any excess generation to the next month, or purchased at avoided cost. Participation is limited to 3% of utilities peak demand. Peak demand for the state for 2011 was 21,477 MW.