Berkeley, CA and Boulder, CO may be known in most of America for their ultra-liberal tendencies, but they have pioneered a renewable energy funding mechanism that is on its way to being implemented in Illinois, Louisiana, Nevada, Ohio, Oklahoma, Texas, Virginia and many other states. It ties a loan for renewable energy systems to your property tax over a period of 20 – 40 years so whoever owns the property keeps paying down the loan. The Alliance for Green Heat researched how easy it will be for these loans to cover wood and pellet stoves and boilers.
To offer this sort of creative financing states need to pass enabling legislation and then the counties or municipalities that implement it, need to pass implementing regulations. To date around 15 states have already passed enabling legislation and 3 have pending, drafted legislation (AZ, NH & NY). Of all 18, CO, NV and NH identified biomass as being an eligible energy source. Seven other states (LA, MD, NC, OR, TX, VT and WI) stipulate "renewable energy" so presumably all renewables, including biomass, are included. In CO, funding can only be used to change-out an old wood or pellet stove unless your only source of heat is electric, which case it will cover a new installation.
Four states authorize "distributed generation renewable energy sources" which limits it to solar and wind, and precludes biomass and geothermal, as far as we can tell: CA, IL, OK and VA. NY authorizes only solar and wind. Two states specifically just authorize solar: NM & OH. AZ appears to be unique in that it may not be available to individual property owners but only to groupings of properties and focuses on water improvements.
Several states include financing for both renewable energy and energy efficiency projects, so biomass may be able to be included as energy efficiency device, as it is in the federal tax code.
These programs are known as Property-Assessed Clean Energy (PACE) being promoted by the DOE, and a similar program, the Voluntary Environmental Improvement Bond (VEIB) is promoted by the EPA. Both programs are similar and states can merge the concepts and details. The VEIB concept can fund an even broader array of projects, and also has a focus on changing out wood stoves and outdoor wood boilers. EPA documents specifically explain that a payment for a new “$3,500 wood stove becomes less than $19 a month” under a VEIB program.
The Alliance for Green Heat is concerned that PACE type loans could be used to finance unregulated outdoor wood boilers in states that have not adopted legislation to ban installation of the most polluting models. The Alliance believes that PACE or VEIB funds should only be used to finance a EPA Phase II outdoor wood boiler.
To find out if your state is considering passing enabling legislation, contact the office in charge of renewable energy. Clean biomass systems could be excluded inadvertently in some cases and some states like Maryland is already amending their enabling legislation.
For more information, see http://pacenow.org/ and http://www.renewfund.com/.