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H 8132Renewable Energy

State Affairs and Government - Decarbonization Demonstration Initiative Act of 2026

Establishes a forgivable loan program for large apartment buildings to study the feasibility of switching to geothermal heating.

Held for study
Population
Affected
15
Email Legislator
Introduced Feb 27, 2026Committee House Environment and Natural Resources

Plain-English Summary

This legislation creates a "feasibility-first" loan program designed to help owners of large apartment buildings (over 65,000 square feet) switch to geothermal heating systems. The state will offer interest-free loans of up to $75,000 to pay for professional studies to see if such a conversion is possible for a specific building. If the study shows the project isn't feasible, or if the owner cannot secure the necessary approvals or financing to do the work, the loan is forgiven and does not need to be paid back. Funding is set at $500,000 annually.

For younger readers

This bill sets up a special piggy bank to help clean up the air. It offers money to people who own very big apartment buildings. Owners can borrow this money to hire an expert to see if their building can switch to "geothermal energy," which is heat that comes from underground. If the expert says the building can't switch, or if the owner can't get permission to do the work, they don't have to pay the money back. If they do fix the building, they pay the loan back later. This helps reduce pollution.

Who & Where It Applies

Impacted groups
Owners of multi-unit residential dwellingsTenants of large apartment complexesGeothermal contractorsProfessional engineersOffice of Energy Resources
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
$0.32/yr
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Facilitates a direct transition away from fossil fuels in large residential structures, actively contributing to the state's climate goals and reducing greenhouse gas emissions.
  • Lowers the financial barrier for decarbonizing housing infrastructure, which is often a difficult sector to upgrade due to high upfront technical assessment costs.
  • Utilizes public funds to de-risk green energy projects, encouraging collective housing improvements rather than solely focusing on single-family homeowners.
  • Provides financial subsidies to owners of large real estate assets without explicit requirements that the benefits (lower energy costs) be passed down to tenants.
  • Lacks provisions to prevent "renovictions" or rent increases that could occur if building owners modernize their heating systems and subsequently gentrify the property.
  • The annual appropriation cap of $500,000 is relatively small, potentially limiting the program to only a handful of buildings per year, slowing the pace of necessary systemic reform.
For Conservatives
  • The program is entirely voluntary and utilizes incentives rather than mandates to encourage building upgrades, preserving property rights.
  • Generates business opportunities for private sector engineers, energy consultants, and construction contractors who will perform the studies and installations.
  • Requires loan repayment if the project moves forward to construction, ensuring that successful commercially viable projects eventually pay their own way.
  • Uses taxpayer funds to subsidize private real estate owners by forgiving loans for "feasibility studies" that produce no tangible results or return on investment.
  • Expands the size and scope of state bureaucracy by creating new administrative burdens for the Office of Energy Resources and the Infrastructure Bank.
  • Socializes the financial risk of private business decisions while allowing the property owners to privatize the profits if the upgrades increase their building's value.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 88 additions

SECTION 1. The general assembly finds and declares that:

(1) The Act on Climate, chapter 6.2 of title 42, establishes legally binding greenhouse gas emissions reduction targets for the state;

(2) Emissions from existing buildings, including large multi-unit residential buildings, represent a significant portion of statewide greenhouse gas emissions;

(3) Ground-source geothermal heat pump systems and other deep-decarbonization measures can substantially reduce emissions from existing residential buildings;

(4) A principal barrier to adoption of such systems is the cost and financial risk associated with obtaining detailed, site-specific feasibility proposals; and

(5) Reducing this barrier through a feasibility-first financing approach will accelerate informed investment decisions, advance compliance with the Act on Climate, and generate data to support future decarbonization policy.

SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND GOVERNMENT" is hereby amended by adding thereto the following chapter: 42-6.3-1. Definitions. As used in this chapter:

(1) "Applicant" means the owner, or an authorized agent of the owner, of a multi-unit residential dwelling containing greater than sixty-five thousand square feet (65,000 sq.ft.) of gross floor area.

(2) "Feasibility proposal" means a detailed technical and economic assessment prepared by a qualified contractor evaluating the feasibility of converting an existing building to a geothermal heat pump system, including, but not limited to:

(i) Estimated installation and operating costs;

(ii) Anticipated energy savings and greenhouse gas emission reductions;

(iii) Required changes to internal heating and cooling distribution systems;

(iv) The provision of air conditioning in conjunction with heating; and

(v) Impacts on tenant services, building operations, and cost allocation.

(3) "Gross floor area" means the total enclosed floor area of a building, measured from the exterior faces of exterior walls, including residential units and common areas, but excluding parking areas not enclosed within the building envelope.

(4) "Initial feasibility screening" means a preliminary assessment indicating that a building may be technically suitable for geothermal conversion.

(5) "Office" means the Rhode Island office of energy resources.

(6) "Qualified contractor" means a professional engineer, energy consultant, or geothermal contractor with demonstrated experience in geothermal system design, as approved by the office. 42-6.3-2. Geothermal feasibility loan program established.

(a) There is hereby established within the office a demonstration initiative known as the multi-unit residential geothermal feasibility loan program.

(b) The program shall be administered by the office, in coordination with the Rhode Island infrastructure bank, and shall provide no-interest loans to eligible applicants for the sole purpose of obtaining feasibility proposals. 42-6.3-3. Eligibility and application requirements.

(a) To be eligible for a loan under this chapter, an applicant shall:

(1) Own or control a multi-unit residential dwelling containing greater than sixty-five thousand square feet (65,000 sq.ft.) of gross floor area;

(2) Submit an initial feasibility screening prepared by a qualified contractor indicating potential suitability for geothermal conversion; and

(3) Provide any additional information as the office may require by rule.

(b) The office may prioritize applications based on building size, age, energy use intensity, geographic distribution, housing type, or anticipated greenhouse gas reduction potential, consistent with the purposes of this chapter. 42-6.3-4. Loan amount and permitted uses.

(a) Loans issued under this chapter shall not exceed fifty thousand dollars ($50,000) per building provided, however, the loan may be up to seventy-five thousand dollars ($75,000) if the dwelling has greater than one-hundred thousand square feet (100,000 sq. ft.) of gross floor area.

(b) Loan proceeds shall be used solely to pay for the preparation of a feasibility proposal by a qualified contractor. 42-6.3-5. Loan terms - no-risk provisions.

(a) Loans issued pursuant to this chapter shall bear no interest.

(b) Repayment of a loan shall not be required if:

(1) The feasibility proposal determines that geothermal conversion is not feasible; or

(2) The applicant elects not to proceed with implementation due to the inability to obtain financing, investor approval, ownership approval, or other approvals beyond the applicant’s reasonable control.

(c) If an applicant proceeds with geothermal conversion, the loan shall be due at the commencement of construction provided, however, the office may allow repayment of the feasibility loan through, or in conjunction with, existing state or utility clean-energy financing or incentive programs including, but not limited to, any clean energy program offered by the office of energy resources, approved by the commissioner of energy resources. 42-6.3-6. Rules, regulations and administration. The office shall work in conjunction with the state building code standards committee and shall promulgate rules and regulations pursuant to chapter 42 of title 35 to implement and administer this chapter, including, but not limited to, contractor qualification standards, application procedures, loan documentation, and program oversight. 42-6.3-7. Reporting. The office shall submit an annual report to the governor, the speaker of the house of representatives, and the president of the senate containing:

(1) The number of applications received and approved;

(2) The total amount of loans issued;

(3) Feasibility outcomes and building characteristics;

(4) Estimated energy savings and greenhouse gas emission reductions; and

(5) Recommendations for continuation, modification, or expansion of the program as a tool to achieve the goals set by chapter 6.2 of title 42 ("act on climate"). 42-6.3-8. Appropriation -- Revolving fund established.

(a) The general assembly shall consider annual recommendations by the office to appropriate out of any money in the treasury not otherwise appropriated in any given year, for the fiscal year commencing July 1, 2026, and each fiscal year thereafter, the sum (not to exceed five- hundred thousand dollars ($500,000)) as may be necessary to implement the provisions of this chapter.

(b) Funds appropriated pursuant to this section shall be used solely for:

(1) Feasibility loans issued under this chapter;

(2) Reasonable administrative costs incurred by the office of energy resources and the Rhode Island infrastructure bank; and

(3) Program evaluation and reporting required under § 42-6.3-7.

(c) Any funds appropriated but not expended or encumbered at the end of a fiscal year shall remain available for expenditure in subsequent fiscal years for the purposes of this chapter.

(d) Any funds repaid under this chapter shall be retained by the office and shall be re-lent by the office to new applicants on the same terms and conditions set forth herein. 42-6.3-9. Severability. If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application.

SECTION 3. This act shall take effect upon passage.