AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- DECARBONIZATION DEMONSTRATION INITIATIVE ACT OF 2026 (Creates the multi-unit residential decarbonization initiative program to provide funding for feasibility studies to convert large, multi-family residential units to non-emitting renewable geothermal energy.)

S2905

2026 -- S 2905
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LC005475
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- DECARBONIZATION
DEMONSTRATION INITIATIVE ACT OF 2026

Introduced By:
Senators Euer, Mack, DiMario, Valverde, Acosta, Gu, Kallman, and
Pearson

Date Introduced:
March 04, 2026

Referred To:
Senate Housing & Municipal Government
It is enacted by the General Assembly as follows:
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SECTION 1.
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The general assembly finds and declares that:
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(1) The Act on Climate, chapter 6.2 of title 42, establishes legally binding greenhouse gas
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emissions reduction targets for the state;
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(2) Emissions from existing buildings, including large multi-unit residential buildings,
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represent a significant portion of statewide greenhouse gas emissions;
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(3) Ground-source geothermal heat pump systems and other deep-decarbonization
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measures can substantially reduce emissions from existing residential buildings;
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(4) A principal barrier to adoption of such systems is the cost and financial risk associated
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with obtaining detailed, site-specific feasibility proposals; and
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(5) Reducing this barrier through a feasibility-first financing approach will accelerate
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informed investment decisions, advance compliance with the Act on Climate, and generate data to
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support future decarbonization policy.
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SECTION 2. Title 42 of the General Laws entitled "STATE AFFAIRS AND
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GOVERNMENT" is hereby amended by adding thereto the following chapter:
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CHAPTER 6.3
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DECARBONIZATION DEMONSTRATION INITIATIVE ACT OF 2026
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42-6.3-1. Definitions.

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As used in this chapter:
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(1) "Applicant" means the owner, or an authorized agent of the owner, of a multi-unit
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residential dwelling containing greater than sixty-five thousand square feet (65,000 sq.ft.) of gross
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floor area.
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(2) "Feasibility proposal" means a detailed technical and economic assessment prepared by
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a qualified contractor evaluating the feasibility of converting an existing building to a geothermal
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heat pump system, including, but not limited to:
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(i) Estimated installation and operating costs;
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(ii) Anticipated energy savings and greenhouse gas emission reductions;
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(iii) Required changes to internal heating and cooling distribution systems;
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(iv) The provision of air conditioning in conjunction with heating; and
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(v) Impacts on tenant services, building operations, and cost allocation.
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(3) "Gross floor area" means the total enclosed floor area of a building, measured from the
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exterior faces of exterior walls, including residential units and common areas, but excluding
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parking areas not enclosed within the building envelope.
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(4) "Initial feasibility screening" means a preliminary assessment indicating that a building
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may be technically suitable for geothermal conversion.
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(5) "Office" means the Rhode Island office of energy resources.
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(6) "Qualified contractor" means a professional engineer, energy consultant, or geothermal
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contractor with demonstrated experience in geothermal system design, as approved by the office.
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42-6.3-2. Geothermal feasibility loan program established.
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(a) There is hereby established within the office a demonstration initiative known as the
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multi-unit residential geothermal feasibility loan program.
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(b) The program shall be administered by the office, in coordination with the Rhode Island
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infrastructure bank, and shall provide no-interest loans to eligible applicants for the sole purpose
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of obtaining feasibility proposals.
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42-6.3-3. Eligibility and application requirements.
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(a) To be eligible for a loan under this chapter, an applicant shall:
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(1) Own or control a multi-unit residential dwelling containing greater than sixty-five
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thousand square feet (65,000 sq.ft.) of gross floor area;
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(2) Submit an initial feasibility screening prepared by a qualified contractor indicating
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potential suitability for geothermal conversion; and
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(3) Provide any additional information as the office may require by rule.
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(b) The office may prioritize applications based on building size, age, energy use intensity,

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geographic distribution, housing type, or anticipated greenhouse gas reduction potential, consistent
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with the purposes of this chapter.
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42-6.3-4. Loan amount and permitted uses.
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(a) Loans issued under this chapter shall not exceed fifty thousand dollars ($50,000) per
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building provided, however, the loan may be up to seventy-five thousand dollars ($75,000) if the
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dwelling has greater than one-hundred thousand square feet (100,000 sq. ft.) of gross floor area.
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(b) Loan proceeds shall be used solely to pay for the preparation of a feasibility proposal
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by a qualified contractor.
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42-6.3-5. Loan terms - no-risk provisions.
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(a) Loans issued pursuant to this chapter shall bear no interest.
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(b) Repayment of a loan shall not be required if:
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(1) The feasibility proposal determines that geothermal conversion is not feasible; or
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(2) The applicant elects not to proceed with implementation due to the inability to obtain
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financing, investor approval, ownership approval, or other approvals beyond the applicant’s
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reasonable control.
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(c) If an applicant proceeds with geothermal conversion, the loan shall be due at the
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commencement of construction provided, however, the office may allow repayment of the
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feasibility loan through, or in conjunction with, existing state or utility clean-energy financing or
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incentive programs including, but not limited to, any clean energy program offered by the office of
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energy resources, approved by the commissioner of energy resources.
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42-6.3-6. Rules, regulations and administration.
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The office shall work in conjunction with the state building code standards committee and
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shall promulgate rules and regulations pursuant to chapter 42 of title 35 to implement and
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administer this chapter, including, but not limited to, contractor qualification standards, application
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procedures, loan documentation, and program oversight.
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42-6.3-7. Reporting.
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The office shall submit an annual report to the governor, the speaker of the house of
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representatives, and the president of the senate containing:
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(1) The number of applications received and approved;
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(2) The total amount of loans issued;
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(3) Feasibility outcomes and building characteristics;
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(4) Estimated energy savings and greenhouse gas emission reductions; and
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(5) Recommendations for continuation, modification, or expansion of the program as a tool
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to achieve the goals set by chapter 6.2 of title 42 ("act on climate").

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42-6.3-8. Appropriation -- Revolving fund established.
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(a) The general assembly shall consider annual recommendations by the office to
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appropriate out of any money in the treasury not otherwise appropriated in any given year, for the
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fiscal year commencing July 1, 2026, and each fiscal year thereafter, the sum (not to exceed five-
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hundred thousand dollars ($500,000)) as may be necessary to implement the provisions of this
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chapter.
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(b) Funds appropriated pursuant to this section shall be used solely for:
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(1) Feasibility loans issued under this chapter;
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(2) Reasonable administrative costs incurred by the office of energy resources and the
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Rhode Island infrastructure bank; and
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(3) Program evaluation and reporting required under § 42-6.3-7.
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(c) Any funds appropriated but not expended or encumbered at the end of a fiscal year shall
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remain available for expenditure in subsequent fiscal years for the purposes of this chapter.
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(d) Any funds repaid under this chapter shall be retained by the office and shall be re-lent
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by the office to new applicants on the same terms and conditions set forth herein.
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42-6.3-9. Severability.
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If any provision of this chapter or the application thereof to any person or circumstance is
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held invalid, such invalidity shall not affect other provisions or applications of the chapter which
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can be given effect without the invalid provision or application.
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SECTION 3. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- DECARBONIZATION
DEMONSTRATION INITIATIVE ACT OF 2026
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This act would create the multi-unit residential decarbonization initiative program to
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provide revolving funding for feasibility studies to convert large, multi-family residential units to
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non-emitting renewable geothermal energy.
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This act would take effect upon passage.
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