Rhode Island residents interested in installing a renewable energy system at home, such as solar, wind, or geothermal, can take advantage of tax incentives offered by the state to help offset part of the cost. National Grid, the state’s largest utility company, also offers incentives for making energy efficiency improvements at home that will save money and reduce greenhouse gas emissions.
Personal income tax credit for residential renewable energy systems
If you install a solar water heating, solar space heating, solar photovoltaic (either on or off the grid), or wind system, or a geothermal heat pump at home you can claim a credit against your Rhode Island state income taxes for 25% of the cost. The credit is based on a maximum system cost of $15,000 for solar photovoltaic, active solar space heating and wind systems. So if you install a system with a cost of $15,000 or more, your tax credit would be $3,750. The maximum cost eligible for a credit for solar water heating and geothermal systems is $7,000, giving you a credit of $1,750.
According to the Rhode Island legislation authorizing the tax credit for renewable energy systems, you can claim the credit in the tax year your renewable energy system is placed in service. You can also claim the credit in the tax year you purchase the system if you place it in service by April 1 of the following tax year. Any part of the credit not used because it exceeds your tax liability cannot be carried forward to future years.
According to the Database of State Incentives for Renewables & Efficiency, there are certain system requirements you must meet in order to qualify for the Rhode Island state tax credit. Solar photovoltaic systems must have a minimum module size of 24 square feet and must be connected to the grid or to a battery-storage system. Solar water heating systems must have a minimum collector area of 60 square feet, with a storage tank that holds at least 80 gallons. Active solar heating systems must have a minimum collector area of 125 square feet, and must have a system to store and/or distribute heat to the living space in your home.
Wind energy systems must have a rotor diameter of at least 44 inches, with a factory-rated output of at least 250 watts at a wind velocity of 28 miles per hour. Geothermal systems must have a minimum performance coefficient of 3.4 or an efficiency ratio of at least 16. Geothermal systems must also meet certain Air-Conditioning and Refrigeration Institute (ARI) –
American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) –
International Organization for Standardization (ISO) standards. Solar and geothermal installations must be approved by a city or town inspector.
The Database of State Incentives points out certain renewable systems that are not eligible for the income tax credit. These include passive solar space-heating systems, passive water-heating systems, solar pool-heating systems, sunspaces, solar greenhouses, and solar photovoltaic or wind systems installed on boats or recreational vehicles.
How to claim the tax credit
In order to claim the tax credit you need to obtain certification of your system from the Rhode Island Office of Energy Resources. On their website at www.energy.ri.gov you can download the form you need to file for a solar photovoltaic, solar domestic hot water, solar space heating, geothermal or wind system. These forms contain the information you need to present in order to be approved for the credit. The Rhode Island Residential Renewable Energy System Credit is claimed on Form RI-1040 under Other Rhode Island credits when you file your annual state income tax return.
Rhode Island sales and property tax exemptions
Cities and towns in Rhode Island can exempt renewable energy systems from property tax. A separate statute states that solar photovoltaic, solar water heating, and active solar space heating systems may not be assessed at more than the value of a conventional system installed in a building.
Products used in renewable energy systems, including solar electric systems, inverters for solar electric systems, solar thermal systems, mounting racks and ballast pans for solar collectors, geothermal heat pumps, and wind turbines and towers are 100% exempt from the Rhode Island sales and use tax.
Utility company incentives
The renewable energy and energy efficiency incentives offered by utility companies in Rhode Island include free home energy efficiency audits, rebates on energy efficiency improvements in your home and on the purchase of energy efficient appliances, low interest loans to finance the cost of energy efficiency improvements, and production incentives for renewable energy systems.
National Grid offers its customers in Rhode Island various rebates on weatherization, lighting, appliances, programmable thermostats, air conditioning units, furnaces, and heat pumps. On National Grid’s website www.thinksmartthinkgreen.com you will find a link to the Online Efficiency Store (www.energyfederation.org/estarlights) where you can get $2 – $4 off on compact fluorescent light bulbs and from $10 to $20 off on energy efficient fixtures and torchieres.
If you purchase an Energy Star clothes washer you can receive a $50 rebate check. You can download the mail-in rebate request form from www.myenergystar.com under Products & Discounts. Look up Rhode Island and click on “$50.00 ENERGY STAR Clothes Washer Mail-In Rebate”.
You can receive a mail-in rebate of $300 to $500 for Energy Star central air conditioning systems. A program brochure and rebate application form can be downloaded from the Cool Smart website at www.mycoolsmart.com.
National Grid offers various rebates for heating customers in Rhode Island, including up to $750 on weatherization improvements, $25 each for programmable thermostats, from $100 to $400 on forced hot air furnaces, up to $1,000 on boilers, and $300 on high efficiency water heaters. You can download the rebate application form on the website www.thinksmartthinkgreen.com.
Solar water heating systems can qualify for a rebate of 15% of the cost up to a maximum rebate of $1,500. National Grid works directly with solar installers who submit the rebate application on your behalf. For more information on the solar water heating rebate you can use the link on the website www.thinksmartthinkgreen.com or call National Grid at 1-800-292-2032.
People’s Power & Light
People’s Power & Light in Rhode Island is part of the Energy Consumers Alliance of New England that buys renewable energy credits from solar photovoltaic systems and wind energy systems. These credits are combined with other credits for hydrological and biomass systems and are sold through New England’s Greenup program, through which customers can choose to purchase their electricity from renewable sources.
According to the Database of Rhode Island Homeowner Incentives for Renewables & Efficiency, People’s Power & Light offers to purchase these credits at $0.03 per kilowatt hour under a 3-year contract. If you are interested you can find information on who to contact in the Mass Energy website at www.massenergy.com/Solar.
When you have your own renewable energy system at home and you are connected to the grid, you can receive credit for the excess electricity you generate. Your excess energy generation is credited at a rate slightly less than the utility company’s retail rate. The credit can be carried forward for a 12-month period, and at the end of that period any remaining balance is transferred to the Rhode Island Renewable Energy Low-Income Fund.
CoolSmart – Residential HVAC Rebates and more! www.mycoolsmart.com
Database of State Incentives for Renewables & Efficiency – Rhode Island Homeowner Incentives for Renewables & Efficiency: www.dsireusa.org
Mass Energy Consumers Alliance – Solar Energy – Opportunity for Additional Revenue from Your Solar Installation! www.massenergy.com/Solar
National Grid – Rhode Island Electric – Energy Efficiency: www.nationalgridus.com/narragansett
National Grid – Think Smart Think Green – Home Energy Savings with Efficiency: www.thinksmartthinkgreen.com
The Providence Journal – Green Power: Tax credits available for renewable projects, August 15, 2007: www.projo.com
State of Rhode Island – Office of Energy Resources – Renewable Energy Incentives for Homeowners: www.energy.ri.gov