Buying vs Leasing Solar in Rhode Island: Pros & Cons
Choosing between buying vs leasing solar in Rhode Island is an important step when deciding to go solar. Solar can help you mitigate the rising electricity costs in Rhode Island, but choosing the right financing option is just as important as choosing the panels on your roof.
The four main solar financing options are cash, solar loan, lease, and Power Purchase Agreement (PPA).
If you’re thinking about buying vs. leasing solar in Rhode Island, this guide will explain each type of solar financing: their possible financial outcomes, levels of ownership, and access to Rhode Island’s incentive programs.
Factors to Consider in Choosing the Right Solar Financing Option
Here are some things to consider before you decide which solar financing option is may fit your household’s financial situation:
Upfront, Monthly, and Long-Term Costs
Consider not only your long-term savings but also your current financial situation. Compare upfront costs, monthly payments, financing charges, contract terms, and projected electricity savings.
Long-term costs can vary based on the option, system price, financing terms, and how long you plan to remain in the home.
Ownership, Maintenance, and Repair Responsibilities
Consider maintenance costs and repair needs when deciding. Some financing options make you responsible for maintaining and repairing your system, while some will take care of maintenance and repairs for a set period.
Rhode Island Incentives
Some solar financing options make you eligible for Rhode Island incentives, but that depends on the system’s eligibility and ownership structure. These incentive programs have specific conditions that you have to keep in mind.
Future Home Sale and Transfer Considerations
When a home is sold, an owned system generally transfers with the property, although an outstanding solar loan may still need to be addressed. A lease or PPA may have transfer, buyer qualification, or buyout requirements depending on the agreement.
Comparing Solar Financing Options in Rhode Island
Newport Solar provides ownership through cash or a solar loan, or a PPA through our partnership with LightReach. We do not offer a solar lease at this time.
Cash Purchase | Solar Loan | Solar Lease | PPA | |
Ownership | Homeowner | Homeowner | Solar company | Solar company |
Upfront Cost | Cash Purchase: Full system cost paid upfront | Solar Loan: Varies by lender and loan terms; may require little or no upfront payment | Solar Lease: Typically little or no upfront cost, depending on the agreement | PPA: Typically little or no upfront cost, depending on the agreement |
Payment Structure | Upfront system purchase | Monthly loan payments plus applicable interest and fees | Contracted monthly payment | Contracted per-kWh payment |
Maintenance | Homeowner’s responsibility or warranty terms | Homeowner’s responsibility or warranty terms | Typically provider’s responsibility | Typically provider’s responsibility |
Incentives | Owner may qualify | Owner may qualify | System owner may qualify; customer benefits depend on the agreement | System owner may qualify; customer benefits depend on the agreement |
Modifications | more control over future modifications, subject to warranties, financing terms, and technical requirements. | more control over future modifications, subject to warranties, financing terms, and technical requirements. | modifications may require approval from the system owner under the agreement. | modifications may require approval from the system owner under the agreement. |
Owning Solar in Rhode Island
Homeowners who purchase with cash or a solar loan may have access to Rhode Island’s program incentives, depending on eligibility and financing structure.
There are two main financing options for owning solar in Rhode Island: buying with cash or with a solar loan.
Purchasing Solar in Rhode Island With Cash
Buying solar in Rhode Island with cash is straightforward: you pay an upfront cost and immediately have full ownership of your solar system.
Below are the pros and cons of purchasing solar with cash.
Pros
No interest payments or financing charges
Access to applicable Rhode Island incentive programs
Full ownership allows you to modify your system (e.g., adding batteries or panels)
Cons
Significant upfront investment
Ties up a high amount of cash
You are responsible for system maintenance outside applicable warranty coverage
Purchasing Solar in Rhode Island Through a Solar Loan
Purchasing solar in Rhode Island through a solar loan lets you own your system without paying the full cost upfront.
Depending on the lender and borrower qualifications, some solar loans may require little or no upfront payment and allow homeowners to spread the cost of the system over time.
Below are the pros and cons of purchasing solar through solar loans.
Pros
May require little or no upfront payment, depending on the lender and borrower qualifications
Full ownership of the solar system, allowing you to modify your system
Access to applicable Rhode Island benefits and incentive programs
Flexible loan payment terms
Spreads the cost of the system over time
Cons
Interest and financing charges increase the total cost.
Monthly loan payments
Loan terms, interest rates, and fees vary by lender.
Third-Party Ownership of Solar in Rhode Island
Third-party ownership is another option for Rhode Island households, typically requiring little to no upfront cost and minimal maintenance.
With third-party ownership, another company owns the solar system. A lease generally involves a fixed monthly payment, while a PPA charges for the electricity the system produces. This financing arrangement can reduce upfront costs and shift maintenance responsibilities to the owning company.
Solar Lease in Rhode Island
A solar lease works like renting the system. The leasing company installs the solar panels and holds full ownership of the system. You simply pay a monthly fee for a leased solar system, regardless of how much electricity it produces.
Pros
Minimal upfront cost
Maintenance and covered repairs are typically handled by the system owner.
Predictable monthly solar payments
May reduce monthly energy costs if the lease payment is lower than the utility cost it offsets, depending on the agreement and electricity usage.
Cons
You don’t own the system.
Limited modifiability
Homeowners do not directly claim applicable tax benefits tied to system ownership.
Solar Power Purchase Agreement (PPA) in Rhode Island
A Power Purchase Agreement (PPA) lets you pay for the electricity produced by a solar system installed on your property rather than purchasing the system itself. The solar provider owns the system, and you pay for the electricity the system produces at the per-kWh rate established in the agreement.
Below are potential advantages and considerations for the LightReach PPA available through Newport Solar.
Pros
Predictable per-kWh pricing based on the agreement’s terms
Little or no upfront cost, depending on the agreement
No need to finance or purchase the solar equipment
Maintenance and covered repairs are responsibilities of the system owner.
Cons
As with a solar lease, you don’t own the system in a PPA.
Homeowners do not directly claim applicable tax benefits tied to system ownership.
PPAs are long-term agreements and may have transfer or buyout requirements if the home is sold, depending on the contract.
How Financing Options Affect Rhode Island Incentives
Who receives or directly claims an incentive depends on who owns the solar system and the program involved.
For owned systems, the homeowner may directly receive or claim applicable incentives. With a lease or PPA, the third-party system owner may receive or claim certain incentives, while the homeowner’s benefits depend on the program and the terms of the agreement.
As of 2026, the following are some of the major Rhode Island programs and exemptions to consider:
Sales and Property Tax Exemptions
Rhode Island exempts qualifying solar equipment from the state's 7% sales tax, including solar photovoltaic modules or panels and certain related equipment.
Qualifying solar systems may also be exempt from local property taxation, depending on the municipality. Rhode Island law allows cities and towns to exempt renewable-energy systems from taxation by ordinance.
Renewable Energy Fund (REF) Grant
Homeowners who install an eligible solar system can potentially qualify for the Renewable Energy Fund (REF) Small-Scale Solar Program.
In 2026, the program provides $1.65 per watt, up to $14,500 per customer, with an additional $5,000 storage incentive for eligible solar-plus-storage projects. The current Small-Scale Solar program is for net-metered systems, and the homeowner's installer applies for the grant on the homeowner's behalf. REF funding is limited and subject to availability and eligibility.
Rhode Island Energy Storage Rebate
In 2026, Rhode Island also offers a separate Energy Storage Rebate for eligible residential battery storage projects. The program provides rebates of up to $8,000 for standard residential projects and up to $16,000 for income-eligible residential projects, subject to program requirements and available funding. This rebate is separate from the REF program’s $5,000 storage incentive. Homeowners cannot receive both the Energy Storage Rebate and the REF storage incentive for the same battery equipment, so eligible projects must use the applicable incentive rather than combining the two for the same storage system.
Net Metering vs. the REG Program
Eligible Rhode Island Solar projects may participate in either net metering or the Renewable Energy Growth (REG) program, depending on the project and agreement.
With Net Metering, eligible customers get credits for the electricity the system sends back to the Rhode Island Energy grid, and these credits help reduce monthly bills. Eligible participants who choose the REG Program receive a set rate for every kilowatt-hour their system produces.
However, REG cannot be combined with the REF grant or net metering, and it uses a 15-year or 20-year tariff term, depending on system size.
Which Solar Financing Path Is Right for Your Home?
The option that fits your household depends on several factors because every household has different needs and financial capabilities.
Ask yourself the following questions before making your choice:
How much upfront cost are you comfortable with?
Do you want to own the system?
How do you want maintenance and repair responsibilities to be handled?
How do you want payments structured — upfront purchase, loan payments, lease payments, or a per-kWh PPA rate?
How long do you expect to remain in the home?
Going Solar in Rhode Island With Newport Solar
Every home in Rhode Island is a little different, and so is every homeowner’s financial situation. The right choice depends on various factors like your financial situation, household electricity usage, and your long-term plans.
As an experienced Rhode Island solar installer, Newport Solar works with homeowners across the state to understand their solar and financing options and how each structure works.
We offer system ownership through cash or a solar loan, as well as a PPA through our partnership with LightReach. Our team can explain the differences so homeowners can decide which approach may fit their needs.
Frequently Asked Questions
What is the Rhode Island REG program?
The Renewable Energy Growth (REG) program pays solar system owners a fixed rate for every kWh their system produces. It has a 15-year or 20-year tariff term depending on system size and cannot be combined with the REF grant.
What happens to a solar lease or PPA when selling a home?
A solar lease or PPA may be transferred to a new homeowner, depending on the terms of the agreement and the provider’s requirements. The buyer may need to qualify to assume the agreement. Some contracts may also provide buyout or other options that can be addressed as part of the home sale.
Can I add batteries to a leased system?
It depends on the leasing company’s terms. Some companies allow battery add-ons, while others do not.
What about the federal solar tax credit in Rhode Island in 2026?
The federal Residential Clean Energy Credit under Section 25D is no longer available for qualifying expenditures made after December 31, 2025. As a result, homeowners installing solar in 2026 generally cannot claim the former 30% federal residential solar tax credit.
However, homeowners who purchase qualifying systems may still be eligible for Rhode Island's sales-tax exemption and, where applicable, a local property-tax exemption.
