Residential Renewable Energy Tax Credit (Corporate)

September 25, 2018

Summary

NOTE: The Renewable Energy Tax Credit is not allowable against Personal Income taxes since 2010, however the Corporate portion of the tax credit is still active. While the Corporate tax credit is still included in the statutes, there is no functional way to leverage the tax credit.

Rhode Island offers a tax credit for photovoltaic systems (on-grid and off-grid), solar hot-water systems, active solar-heating systems, wind-energy systems and geothermal-energy systems installed on residences. The tax credit is equal to 25% of the system cost and applies only to residential installations. The tax credit is currently only available as deductible from Business Corporation tax portion of the business that pays for the system.

Photovoltaic (PV) systems must have a minimum module size of 24 square feet, and must either be connected to the grid or to a battery-storage system. PV systems up to $15,000 are eligible for the full 25% credit, which would amount to $3,750 per system. A resident or business that pays for a PV system that exceeds $15,000 in cost will receive a credit based on a $15,000 system cost.

Solar hot-water systems must have a minimum collector area of 34 square feet and must include a storage tank that holds at least 80 gallons. Solar hot-water systems up to $7,000 are eligible for the full 25% credit. (A resident or business that pays for a solar hot-water system that exceeds $7,000 in cost will receive a credit based on a $7,000 system cost.)

Active solar-heating systems must have a minimum collector area of 125 square feet, and must include a system for storing and/or distributing heat to the living area of a house. Active solar-heating systems up to $15,000 are eligible for the full 25% credit. (A resident or business that pays for an active solar-heating system that exceeds $15,000 in cost will receive a credit based on a $15,000 system cost.)

Wind-energy systems must have a rotor diameter of at least 44 inches and a minimum factory-rated output of at least 250 watts (W) at 28 miles per hour. Wind-energy systems up to $15,000 are eligible for the full 25% credit. (A resident or business that pays for a wind-energy system that exceeds $15,000 in cost will receive a credit based on a $15,000 system cost.)

Geothermal systems must have either a minimum coefficient of performance of 3.4, or an efficiency ratio of 16 or greater. All geothermal systems must have a commissioning sign-off by the manufacturer or distributor of the equipment to verify the proper installation and performance of the system. In addition, all geothermal systems must meet the following standards:

ARI/ASHRAE/ISO-13256-1 for water-to-air geothermal systems
ARI/ASHRAE/ISO-13256-2 for water-to-water geothermal systems
ARI/ASHRAE/ISO-13256 GWHP for groundwater heat pumps
ARI/ASHRAE/ISO-13256 GLHP for closed-loop heat pumps

Geothermal systems up to $7,000 are eligible for the full 25% credit. (A resident or business that pays for a geothermal system that exceeds $7,000 in cost will receive a credit based on a $7,000 system cost.)

The following systems are not eligible for the credit: passive solar space-heating systems, passive solar hot-water systems, sun spaces, solar greenhouses, PV and wind systems on boats or recreational vehicles, solar collectors for pools, existing renewable-energy systems, used renewable-energy equipment, and repairs and replacements of existing renewable-energy systems.

To apply for the tax credit, taxpayers must first obtain a system approval from the Rhode Island Office of Energy Resources (RI OER), which is to be attached to the income tax filing. The RI OER web site provides details on the criteria and application for system approval.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Rhode Island
Incentive Type:	Corporate Tax Credit
Web Site:	http://www.energy.ri.gov/renewable/index.php
Administrator:	Rhode Island Office of Energy Resources
Start Date:
Eligible Renewable/Other Technologies:	Solar Water Heat Solar Space Heat Solar Photovoltaics Wind (All) Geothermal Heat Pumps Wind (Small)
Incentive Amount:	25% of costs
Maximum Incentive:	Based on maximum system cost of $15,000 for PV, active solar space heating and wind; Based on $7,000 maximum system cost for solar hot water and geothermal
Eligible System Size:	PV: minimum module size of 24 square feet Solar hot water: minimum collector area of 34 square feet Active solar heating: minimum collector area of 125 square feet Wind: minimum capacity of 250 watts at 28 mph Geothermal: minimum coefficient of performance of 3.4 or minimum efficiency ratio of 16
Carryover Provisions:	Credit may not be carried over to subsequent years

Authorities

Name:	R.I.G.L. § 44-57-1, et seq.
Date Enacted:	07/13/2000
Effective Date:	01/01/2001

Name:

R.I. Gen. Laws § 44-11 (Business Corporation tax)

Contact

Name:	George Sfinarolakis
Organization:	Director, Lead by Example Program
Address:	RI
Phone:	(401) 574-9101
Email:	george.sfinarolakis@energy.ri.gov

Name:	Public Information
Address:	One Capitol Hill Providence RI 02908
Phone:	(401) 574-8935

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.