Businesses and homeowners who “think green” when constructing new buildings and homes, or renovating old ones, would qualify for tax credits under a new bill in the Rhode Island General Assembly.
The proposed legislation, dubbed the “Green Building Tax Credit,” would compensate builders for the higher costs associated with constructing energy-efficient buildings. Contractors would recoup 100 percent of the extra money spent on special ventilation systems, low-energy appliances and other energy-saving measures.
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“It might cost (builders) more to build using green structural designs and heating and cooling systems, but they’re going to be able to redeem those costs,” said Rep. Eileen Naughton, a Warwick Democrat who planned to introduce the bill last week. “And that’s in addition to what they’ll save on energy costs.”
Virtually any building — commercial, industrial and single- or multifamily residences — would be eligible to apply for the tax credits, which would be doled out over a five-year period. The credits would apply to both new and renovated buildings.
To qualify, a building’s energy use must not exceed a certain percentage allowed by the state energy code. The state energy office would judge whether a building qualifies.
Buildings must also meet strict ventilation standards: Air on each floor must be fully recycled every two hours. If the building allows smoking, those areas should have a separate ventilation system, according to the bill. And appliances must be in compliance with Energy Star, a federal program that rates appliances for energy efficiency.
Applicants would apply to the state energy office for certification in order to qualify for the tax credit, which has a cap of $15,000.
While energy-efficient construction techniques to build “high-performance” or “resource-efficient” buildings have been used for decades, they generally receive little attention when energy costs are held in check, as they were through most of the 1990s. But prices for oil and natural gas have jumped in recent years, piquing the public’s awareness of energy conservation.
“It’s been evident on everybody’s bills that rates are going up, and fossil fuel costs continue to go up,” said Naughton, who is chairwoman of the House Committee on Environmental Accountability. “We have to look at ways to conserve energy.”
The new legislation is aimed at both commercial builders and private homebuyers. But, as committee members discussed at a May 10th meeting, green buildings likely won’t catch on until the public begins to demand them.
“It’s a narrow market right now,” said Roger R. Warren, executive director of the Rhode Island Builders Association. “The demand isn’t there to get (builders) to spend the extra 3 to 5 percent to build (energy-efficient) buildings. But if a customer asks for an energy-efficient home, they’ll build it tomorrow.”
Naughton said the committee plans to schedule workshops for builders and contractors to learn techniques to build high-performance buildings.
Figuring a cost of the proposed tax-incentive measure is difficult, Naughton said, because so few green buildings are built. Her preliminary estimate is $25 million over 10 years, although she said that estimate could drop as more as the volume of energy-efficient projects grows and costs come down.
The state might take the lead in sparking a movement toward green building. A separate energy-conservation bill proposed in the state Senate would require that all new state buildings adhere to stricter energy-use standards. The state would encourage the private sector to use those guidelines voluntarily.
