Rhode Island offers a tax rebate for renewable energy projects of up 25 percent of the cost of a project, up to a certain amount.

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For solar panels, also known as photovoltaic systems, solar heating systems and wind turbines, the rebate is up to $3,750 for a $15,000 installation. For solar water and geothermal heating pump systems, the rebate is up to $1,750 for a $7,000 installation.

The tax credits have been around since 2000, said Julie Capobianco, renewable-energy program manager for the state Office of Energy Resources. The standards for tax credits have dramatically changed over the years, switching from an open fund to a self-sustaining renewable energy fund.

Last year, the tax credit cap was $250,000 and Capobianco processed tax credits for 24 photovoltaic systems, 4 solar hot water systems and 3 geothermal heating systems.

The state also offers grants for the residential and commercial photovoltaic systems and wind turbines. The money for the grants come from the renewable energy fund, a surcharge all residents pay on their electric bill.

In 2005, 54 solar projects and one wind project were approved and awarded grants, receiving a total of $1.2 million, Capobianco said. Last year, the program was put on hold.

This year, the program distributed $100,000 for seven residential projects. Capobianco said three commercial projects also received a total of $45,000 in financing. She is uncertain how much money will be available next year.

In Massachusetts, residents and businesses can apply for the Small Renewables Initiative program, which provides rebates for projects up to 3.6 kilowatts for residential solar electricity and 10 kilowatts for commercial solar electricity.

The program puts aside about $3.6 million each year. For solar electric systems, the reimbursement is $2 per watt. For wind projects, the reimbursement is $2.25 per watt.

From April 2005 to December 2006, the program gave out about $5.5 million in rebates for 77 wind and 399 solar electricity projects, according to the Massachusetts Technology Collaborative Web site. Through June of this year, the program allocated about $865,000. The Web site also contains how-to guides on renewable energy projects.

A tax break that goes toward federal income tax is also available for solar water heaters and solar photovoltaic systems, said Noah Kaye, a spokesman for the Solar Energy Industries Association, a trade organization in Washington, D.C.

In general, the credit covers 30 percent of the cost of the system up to a maximum credit of $2,000 for solar electric and solar water heating systems, Kaye said. The systems must meet performance standards by the Solar Rating Certification Corporation.

The credits apply separately, so a consumer could get a $2,000 credit for a photovoltaic array and another $2,000 for a solar water heating system, Kaye said. The federal tax credit expires in December 2008.

Related Web sites

•Rhode Island Office of Energy Resources

www.riseo.state.ri.us

•Massachusetts Technology Collaborative Small Renewables Initiative

www.masstech.org/RenewableEnergy/small_renewables.htm

•The Database of State Incentives for Renewables and Efficiency Web site lists federal and state tax incentives for renewable energy, www.dsireusa.org.

mlee@pressofac.com