October, 2014 - As more and more states are
beginning to provide incentives for modern wood and pellet stove installations,
an array of criteria are being used to guide which stoves should be eligible
and what other requirements should be included. This report looks at environmental,
economic, energy efficiency, social equity, and consumer values and suggests
ways to maximize program impact.
The federal wood and pellet stove
incentive program that lasted from 2009 to 2013 is widely regarded as a
particularly poor model. It allowed consumers to claim a $300 tax credit for
the purchase of any new wood or pellet stove provided it was EPA certified
(non-exempt) and at least 75% energy efficient. The energy efficiency
requirement was quickly rendered meaningless as stove manufacturers were
allowed to self-rate efficiency using any number of available methods. The EPA
certification requirement, while it eliminated the highest polluting and most inefficient stoves, was similarly not sufficient for
ensuring the best available technology was appropriately incentivized. Also,
the federal program did not take important criteria such as professional
installation and location into consideration. Thus, a new stove that emitted 5.5
grams of fine particulate matter (PM2.5) emissions per hour could be self-installed
in a densely populated urban area and still be entitled to the tax credit.
A table summarizing all statewide incentive programs can be found at the end of this essay.
Click here to download a pdf version of the report.
Summary of
recommendations:
At a minimum, we believe programs
should only incentivize wood and pellet stoves that are certified by the Environmental
Protection Agency (EPA) and meet a stricter emission limit than the EPA’s minimum
requirement. Energy efficiency is another important criterion that should be
considered in stove incentive programs, although lack of reliable, independent data
makes accounting for efficiency too difficult as of Fall 2014. To ensure new
wood and pellet stoves work as cleanly and efficiently as they are designed,
and to protect consumer safety and minimize the risk of fire, incentive
programs should require subsidized stoves to be installed by certified hearth
professionals. To ensure taxpayer funds for new stoves are spent in an
efficient way and limit the negative environmental effects of wood smoke in
urban areas, we recommend that new installs of wood stoves should be limited to
rural areas, or that programs only make pellet stoves eligible for incentives.
We also recommend that programs better target low- and middle-income residents.
There are several examples of state
stove incentive programs that contain innovative and “best practice” features, but
all programs have opportunities for improvement. We hope this report provides a
resource for all programs.
1. Certification of
equipment
Wood Stoves
Limiting the eligibility of wood
stoves to EPA certified models is a basic feature of stove incentive programs. The federal tax credit did not mention EPA
certification, as it was supposed to be primarily an efficiency incentive. Several
unregulated
boilers claimed to be eligible, but we are not aware of any uncertified
stoves that claimed the credit.
The EPA provides a list of certified
wood stoves available for download on its
website
with other useful information such as the stove manufacturer’s name, model
name, emission rate, heat output in BTU per hour, and estimated or actual
tested efficiency. Wood stoves certified by the EPA are independently tested to
ensure they meet a particulate emissions threshold, which currently is 7.5
grams per hour for non-catalytic wood stoves and 4.1 grams per hour for catalytic
wood stoves. Consumers can identify EPA certified wood stoves through a label
affixed to the back or side of a stove as well as a hangtag, pictured below.
EPA began certifying Phase II stoves in 1990, so some
certified stoves are nearly 25 years old and need to be retired almost as much
as some uncertified ones need to be. Stoves certified in the past 5 years are
considered much cleaner and more effective than older, certified stoves.
Pellet stoves
Pellet
stoves are generally perceived to be cleaner and more efficient than wood
stoves as a class, and few stove incentive programs have restricted pellet
stove eligibility to those certified by the EPA. However,
independent
test data shows that this widely held belief about pellet stove efficiency
may be incorrect. Some pellet stoves on the market are as low as 40% efficient,
and many are in the 50% and 60% range, when they easily can be in the 70s given
available technologies. We believe that households should not be subsidized into
unwittingly buying a low-efficiency pellet stove that will saddle them with
much higher fuel costs overtime. The list of EPA certified pellet stoves can be
found on the same list as certified wood stoves. EPA certified pellet stoves
are
usually
more efficient than their uncertified (exempt) counterparts because exempt
pellet stoves often use the 35 to 1 air to fuel ratio loophole to avoid
certification, at the cost of lower efficiency.
This issue will be obsolete at some
point in 2015, when all new pellet stoves will be required to be certified
under new EPA stove regulations.
Masonry heaters
Masonry heaters are such an expensive,
niche product that they almost do not need discussion in these programs. However, we encourage programs to make
certain masonry heaters eligible, even though they are not certified. The EPA
is currently considering a method to certify masonry heaters that may be
released in the next year. In the meantime,
Washington
and Colorado maintain their own lists of certified masonry heaters approved for
sale. These lists can be a useful reference for designing new stove incentive
programs inclusive of masonry heaters.
Colorado
does not set a specific emissions limit, but maintains a list of over 30 approved
masonry heaters by manufacturer. Washington sets an emissions limit of 7.3
grams per kilogram of masonry mass, which may be more useful to policymakers creating
incentive programs. Washington may be setting the bar low, considering that the
EPA
has proposed a limit equivalent to 1.8 g/kg for future regulations.
2. Stricter emission limits
While stove
incentive programs in
Montana,
Idaho, and
Arizona
use EPA limits to set emissions criteria, several other stove incentive
programs set stricter emission limits for eligible appliances than the EPA’s
7.5 and 4.1 grams per hour for non-catalytic and catalytic stoves. Setting
stricter emission limits for wood stoves can help identify which stoves can
perform best under optimal conditions. Some of the cleanest stoves by EPA
emission standards may perform better in the real world. Equally important is
using dry fuel and operating the stove correctly to obtain good
real
world performance. Pellet stoves, which operate in the field much more like
they do in the testing lab as compared to wood stoves, should be held to 2
grams per hour, as in Maryland and
New
York’s program, or 2.5 grams per hour at the most, as in Oregon, Maine and the
federal Housing and Urban Development (HUD)’s PowerSaver low interest loan
programs.
The state of Washington has been a
leader in establishing stricter state-wide limits. Currently they are 4.5 grams
per hour for non-catalytic stoves and 2.5 grams per hour for catalytic stoves.
Washington’s list of approved wood heating technologies, including masonry
stoves, provides an easy standard policy makers can build into incentive
regulations.
A
state
of Oregon incentive program requires stricter limits of 3.5 grams per hour
for non-catalytic stoves and 2.5 grams per hour for pellet and catalytic
stoves, which was adopted by
Efficiency
Maine’s stove incentive program. To take it a step farther, Maryland’s
current limits are 3 grams per hour for wood stoves and 2 grams for pellet
stoves. As the EPA continues to refine its certification criteria, we suggest
that stove incentive programs adopt
Maryland’s approach
of limiting the eligibility of incentives to a certain grams per hour cutoff
according to the data on the EPA’s certified stove list.
The argument against using stricter
emission limits for wood stoves has some merit, but on the whole we and many
other independent experts think it’s worthwhile. It’s true that the test labs often know
exactly how to test a stove, and can hit the stove’s sweet spots to get a low
number of emissions that a consumer never will. Manufacturers that hire a test
lab to do R&D on a stove before testing it may be likely to get even better
numbers, because the lab is that much more familiar with the stove. The new EPA
stove regulations are changing the test protocol, which may require stoves to
burn cleaner on all test runs instead of averaging the test runs. This could give emission numbers more
relevance in the real world.
3. Efficiency
There is still no easy way to use
efficiency in stove incentive programs, and as a result stoves are excluded
from scores of state, local and utility incentive programs that are rooted in
energy efficiency. Despite the benefits of having them included in incentive
programs, industry has been reluctant to disclose efficiency numbers, much less
agree to schemes where some stoves would get incentivized and other not.
Pellet stoves are ideally suited
to be part of many energy efficiency incentive programs, if they would release
their tested efficiency values. Their continued exclusion may contribute to the
perception that this technology does not fit into the mainstream energy
efficiency movement, or worse, that it is not “green” enough to be included. Since
one company, Hearth & Home Technologies, makes a very large percentage of
the pellet stoves sold in the US, including many very efficient ones, they
could significantly move the market by taking leadership and disclosing their
actual, tested efficiency numbers.
Efficiency has become a thoroughly
muddled, confusing, and controversial issue as they are several ways of
measuring efficiency and results can be misleading. One of the greatest problems
with this approach is the lack of third party tested efficiency data. The EPA
list has verified
efficiency
data for only about two dozen units comprising mostly of the highest
performing catalytic stoves. B
y only using stoves that have actual
third party efficiency listing, a program would be basically limiting the
selection to one non-catalytic Jøtul stove and a variety of large catalytic
stoves. Only one pellet stove company, Seraph, has provided real efficiency
data to the EPA thus far.
Setting
efficiency as an eligibility requirement would help encourage manufacturers to
provide third party efficiency data to the EPA, which most have been reluctant
to do in the past. The proposed new EPA stove regulations will require all
stoves to be tested and listed for efficiency, but there is widespread concern
that the EPA will not require, or even have the capacity to make, efficiencies
available to the public within the first year or two after promulgation.
The State of Oregon’s
residential energy
tax credit
for wood and pellet stoves is the only one that has put the effort into a
workable and innovative system to incentivize the purchase of more efficient
stoves without excluding inefficient stoves from eligibility. The more
efficient the new stove is, the higher the tax credit the consumer receives. If
the stove does not have an actual measured efficiency on the EPA list, the
amount of the credit varies by stove type. Non-catalytic stoves are worth the
least credit, catalytic stoves the second least, and pellet stoves the most. If
the stove has an actual reported efficiency, then the consumer receives a tax
credit based on how much more efficient the stove is than the minimum Oregon
has established. The maximum rebate is $1,500.
Both Massachusetts and Maine have attempted to
use stove efficiency as an eligibility metric but the metrics were not clear or
feasible and it had to be dropped.
A local utility program in
Fort Collins, Colorado
offers homeowners zero-interest loans if they upgrade their wood burning
appliance or fireplace to a more efficient class of heater, according to the
default efficiencies provided by the EPA. For example, homeowners can upgrade an
uncertified stove to a certified stove, or a wood stove to a new pellet stove,
but not the other way around. This unique method of incentivizing the purchase
of more efficient wood appliances has the potential to help consumers save
money, but only if the EPA provided more accurate efficient data on pellet
stoves.
We find it is a good practice to
include efficiency in the criteria, but we must acknowledge that the managers
of these programs are struggling with some unintended barriers and
consequences. Oregon is fixing one problem, which had led the tax credit
calculation to favor non-catalytic stoves over the cleaner catalytic or pellet
stoves. This put the agency in charge of the program, the Oregon Department of
Energy, at odds with the Oregon Department of Environmental Quality. The Oregon
tax credit amount is based on the efficiency improvement over the EPA’s default
efficiency. So a non-cat tested at 70% would have a 7% improvement over the 63%
default. A pellet stove tested at 75% would not have any improvement over the
78% EPA default efficiency. The program thus unintentionally puts pellet stoves
at a disadvantage because the EPA has set unrealistically high default
efficiency for pellet stoves.
4. Rebate amounts
Providing a higher rebate amount
for pellet stoves than wood stoves is another common “best practice.” Maryland
provides $700 for pellet stoves and $500 for wood stoves, steering households
who may be on the fence towards a pellet appliance, which will be cleaner. With
lower install costs for pellet stoves, the higher rebate may also be a reason
more than 70% of consumers use the rebate for pellet stoves in Maryland.
Right-sizing the rebate amount is
also something that all programs must grapple with. Funding that goes too quickly, or not quickly
enough can sometimes cause problems. One money saving incentive that more
jurisdictions are employing is bounty, or paying consumers $200-$400 to remove
an old stove from circulation without replacing it with anything. For areas
with excessive wood smoke pollution, this may be a far more effective per
dollar of investment than a change out program.
5. Professional
Installation
Requiring professional installation
is standard for virtually all incentive programs. Wood and pellet stoves are
potentially dangerous appliances and must be installed with the utmost concern
for safety. Hundreds of homes burn down every year due to poor installations and
lack of attention to clearances.
Homeowners seeking to avoid the added cost of
a stove installation are often tempted to self-install. In some cases,
installation can be greater than the cost of a stove itself. State codes vary
about permits and installation requirements for wood stoves, so state incentive
programs that require professional installation can play a large role in helping
to address this safety issue. Pellet stoves, which do not require a full
chimney system, tend to entail less problematic, unsafe installs. However, with
any appliance that presents a fire hazard, a professional installation by a hearth
professional is a good practice.
Options for incentive programs
include requiring that stoves be installed by hearth professionals that have Chimney
Safety Institute of America (CSIA)
http://www.csia.org
or National Fireplace Institute (NFI)
http://www.nficertified.org
certifications. Another option is simply to require a certified contractor, or
someone who has been approved to do specialty energy efficiency or
weatherization work, install the stove. An added benefit of requiring hearth
professional stove installation is that CSIA, NFI, and MHA would also be more
likely to help advertise the incentive program if they are involved.
Most current state incentive
programs, if they require professional installation at all, do not limit the
eligible installers to hearth professionals. For example, Maine’s program
initially required stoves to be installed by contractors with a solid fuel
license, but did not provide for hearth professionals to do installations. In
New York, a Energy Star
professional is required.
Maryland’s program also initially
required professional installation, but later waived the requirement after
receiving a number of consumer complaints. Maryland began accepting
self-installations provided that the owners provided documentation that the
stove has been inspected post-install by either a county inspector or an
insurance adjuster. While we believe requiring professional installation is the
best practice, requiring inspection at a minimum can be a good compromise.
6. Low-income
considerations
Some incentive programs offer
higher rebate amounts to low-income families. This tends to be very common in
change-out programs, and less common in non-trade out incentive programs. In
New
York, however, change-out of an old one stove is required to receive a
rebate for a new one, unless the household is low-income, when the rebate is
offered without a change out.
Change out programs tend to have
limited budgets, but are usually very popular among consumers. Whether it’s a
change out, or a straight incentive program, it is best if taxpayer funds are
spent on consumer who need it most and not wasted on “free riders” who would
make the purchase anyway without the incentive. When rebates disappear in a few
hours or even a few weeks, it likely means the rebate was too generous and a
lesser rebate could have resulted in a more installs.
To ensure stove change-out program funds
benefit low-income consumers, the programs can be opened to them first and heavily
advertised in low-income regions.
Maryland
considered a higher rebate for low-income families, but was dissuaded by added bureaucracy
it involves and lack of data to demonstrate that it would be successful.
The use of
income to qualify households for incentives or subsidies has had little support
in renewable energy programs, even though it could be done relatively easily. Incentive
programs for solar or geothermal rarely, if ever, disqualify families with high
household incomes of $250,000 per year or more. Wealthy people like subsidies
as much as low and middle-income people and it’s often very unpopular to steer
taxpayer subsidies away from the richest families, who often have oversized
homes.
As long as professional
installation is required, incentivizing more affordable stoves from big box
stores can make funding go much further and enable more low-income households
to participate. Good quality EPA-certified stoves start at $700 and one of the
most popular stoves in the country sells for $900. If stoves could be bought at
a deep discount in bulk, program administrators may also get CSIA professionals
to establish a discounted fixed price for a certain type of installation. Professional
installation can be done by CSIA accredited chimney sweeps if local NFI trained
staff at specialty hearth stores will only install their own products. Such a
fixed price would be possible for pellet stoves and for wood stoves on single
or two story homes where the pipe is mounted on the exterior of the house. If
larger rebates are not provided to low-income families, this is a vital way to
help them overcome high upfront costs.
7. Minimizing
Free-Riders
A perennial problem with all rebate
and incentive programs is that some people who take the rebate or the incentive
would have made the purchase anyway, and so the funds serve little
purpose. Determining whether a program
has a high or low number of “free-riders” is also difficult.
This is
regarded as a cost of doing business for many rebate programs, such as those
for purchase of Energy Star appliances. For stoves, the number of “free-riders”
is far higher if consumers don’t learn about the incentive until they are
making a purchase in a showroom.
However, if only the cleanest stoves are incentivized, and professional
installation is required, programs can have the impact of resulting in cleaner,
safer installs. They can also reward those manufacturers who invest more in
R&D and produce cleaner stoves, spurring more innovation.
8. Household/area
eligibility:
While pellet stoves can be acceptable
in rural and more densely populated neighborhoods due to their more consistent
low emissions, there are legitimate concerns about programs that encourage or
subsidize the installation of wood stoves in densely inhabited or urban areas
from a health and nuisance perspectives. Maryland’s program, for instance, is
only available to homes that do not have access to natural gas, a backdoor way
of limiting installs to more rural, sparsely inhabited areas where available
heating fuels are expensive and residents can benefit the most from energy cost
relief. Initial data from the program
shows there have been more wood and pellet stove grants awarded per capita in
the more rural and less affluent counties than the more populated central region
of the state, indicating there has been some success in this method.
A
Woodstove
Change-out Program in parts of
Connecticut, Massachusetts and Rhode Island provided a $3,000 voucher to
households who receive Medicaid, Low-income heating assistance, or the Women’s
Infant and Children’s Nutrition Program.
Incentive programs can also work
closely with low-income heating assistance (LIHEAP) programs, to ensure that
families who receive LIHEAP are aware of the program and can access it.
Instead of using access to natural
gas as an indicator of housing density, zip codes or counties could be
designated as areas where an incentive may be appropriate. Another option would be to limit
wood stove installs in more densely populated areas to only when an old,
uncertified wood stove is being removed and recycled.
8. Energy Audit:
Energy audits are rarely used even in programs to incentivize modern,
bulk fed pellet boilers, much less stove programs. But increasingly, incentives
for stoves are available as part of a deeper energy retrofit that starts with
an energy audit. Auditors can educate homeowners about the importance of
upgrading to safer, more efficient equipment, spot dangerous installations, and
assist in removing dangerous stoves. The Building Performance Institute (BPI)
is taking the lead in developing
guidelines for energy auditors to inspect wood stoves. Requiring
energy audits in conjunction with professional installation would assist in
states providing a more holistic energy service to consumers when incentivizing
wood stoves. The Alliance for Green Heat and University of Maryland Extension
produced a draft of
steps to inspect a wood stove as a resource.
9. Dedicated outside
air:
Several incentive programs in
Oregon, Maine and in some HUD Power Saver programs require a dedicated outside
air supply, but the requirement is far from accepted in hearth professional
circles. In very tight homes, which are still relatively rare in the United
States, outside air supply is important, but to require it for all homes not
only adds a potentially unnecessary cost, it could even be a drawback. If a home were found to be very tight, and
has competing venting needs, such as a vented kitchen hood, a wood stove may
compete for indoor air which could even reverse the flow of air down the
chimney. In such a case, a dedicated outside air vent may be recommended for
the stove. In Oregon, the requirement could mean simply a $35 vent that
provides air within several feet of the stove. Many leading experts
question the use
of outside air.
10. Education:
Any program incentivizing new wood
burning appliances should be coupled with educational materials on correct
stove use and efficient burning practices. New appliances used incorrectly can
negate the benefits of a new stove, contribute to more air pollution, and turn
public opinion against wood burning and the program. It is well known that in
terms of achieving ideal efficiency and cleanliness, choosing the right stove
is only half the battle; the other half is the fuel and the operator. No matter
how modern or clean a wood stove is, it is crucial that the operator use dry,
split wood and give their stove enough air to maintain a clean burn. The
EPA Burn Wise program, is a great
resource for consumers that should be promoted by incentive programs. Consumers
could even be asked when they receive an incentive to sign a pledge promising
to only burn dry wood.
11. Partners and
Outreach
A “best practice” for virtually any
incentive program is building a network of engaged partners who are committed
to the particular goals of the program. For instance, if benefitting lower
income populations is a goal, partnering with a local or state low-income
heating assistance program can help get the word out to that population. Conversely,
we found one incentive program in Alabama, where even the local hearth retail
stores did not know it existed.
If the program is run by a state
energy office, bringing in the expertise of the state air quality office is
also important to ensure that agencies aren’t working at cross-purposes, as what
happened in Oregon.
12. Reducing
emissions
Using
a rebate or incentive to steer consumers toward the cleanest wood or pellet
stove has some positive emission benefits on its own. Some states, such as
Idaho, have for years required people to turn in an old, uncertified stove to
get an incentive for a new one. This
resembles an ongoing, state-wide change-out, more than a stand alone incentive
program, as it is not open to people who do not already have an old stove.
Possibly the oldest continuously operating stove incentive program is in
Arizona, where the state gives an incentive to put a EPA certified stove in a
fireplace, to reduce the use of fireplaces for heating. And, in New York, the
return of an old stove is waived for lower income families who want to buy a
new pellet stove and do not have access to natural gas.
13. Providing moisture meters and subsidizing
wood sheds:
Moisture meters are effective yet
inexpensive tools for ensuring homeowners only burn dry wood. One option is to
provide a free ($10) moisture meter to every home that has a stove installed.
One major woodstove manufacturer has begun to include a free moisture meter
with each purchase of one of its wood stoves. States have the option of teaming
up with the EPA’s Burn Wise program, which is promoting voluntary efforts like
this to help wood stove owners burn cleaner and more efficiently.
Incentive programs could subsidize,
prioritize or even require homes to have or build woodsheds. This would help
ensure that subsidizing a new stove will result in reduced smoke from the home,
or homes with woodsheds could receive a higher rebate, which incentivizes
proper storage and educates people about its importance. An even more ambitious
and more innovative concept would be to provide a firewood shed with every
project. The EPA Burn Wise has a
modular woodshed
plan that cost $217 in materials and can be built off site or onsite. Some experts question if a $150 rebate to
help build a wood shed to keep wood dry may produce similar or more air quality
benefits as a $1,000 rebate for a stove. The logistics of this is not
necessarily easy, but it is something worth considering.
14. Monitoring and
Evaluation
Assessing the effectiveness of
the program using agreed upon method is important. Many renewable energy
incentive programs, including those that involve solar and geothermal, struggle
with accurate and meaningful assessment often because the agency in charge of
the programs wants to show it as a success.
Meaningful third party assessments can be expensive and may not be
worthwhile unless the program is ongoing and there is an opportunity to change
the program, something that outside interest groups may oppose. But tweaking
program requirements is almost always necessary, and key stakeholders play a
vital role in this.
For wood
and pellet stoves, assessing the success of a program can be especially
difficult because there is no easy way to meter heat output or fossil fuels
avoidance. Particulate emission testing can be done in smaller, valley
settings, but is difficult to monitor in state-wide settings. Surveys of all participants via mail and
email could be very useful and are an underutilized tool for gaining insights
into program results. Surveys of hearth retailers can also be important.
Conclusion:
“Best practices” in stove incentive
programs are likely to be increasingly important as more options for smart
deployment become possible. States with more expertise and more background in
wood heat are more likely to have ability to incorporate more best practices
into their programs. Trying to include too many best practices can make
programs too complicated for both consumers and the implementing agency, so it’s
important for program designers to tailor the requirements to the program
goals. Using a state’s program requirements for a solar incentive program is
often a good starting place when developing wood and pellet stove incentive
programs.
At this point in the evolution of
stove technology, we feel that pellet stoves are particularly ready to be part
of more incentive programs. However, public disclosure of efficiencies by
manufacturers will make this process much quicker.
Almost all programs have had to make
adjustments after establishing requirements that did not work as planned. While this is a normal part of the learning
curve of establishing a program for any appliance or technology, we hope this
short report may lead agencies to ask the right questions and consider
effective options.