Senate Committee approves extension of biomass stove tax credit

Alliance for Green Heat, Sept. 14, 2012 - The Senate Committee on Finance marked up a bill last month dealing with the extension of energy efficiency tax credits, and included the $300 “25C tax credit” for home installation of biomass stoves and boilers. The bill, known as the Family and Business Tax Cut Certainty Act, would allow residential consumers to continue to be eligible for the tax credit until December 31, 2013, a two-year extension of the previous deadline.

The Senate Committee on Finance estimates the extension to reduce tax revenues by $2.4 million dollars over the two years, but believes "extending the credit for energy efficient improvements and property expenditures will encourage homeowners to make their homes more energy efficient, thus helping to reduce residential energy consumption." Click here for a copy of the full bill: http://www.finance.senate.gov/legislation/details/?id=1cb48bce-5056-a032-5255-272274d52b64. Click here for previous news and analysis about the 25C tax credit: http://www.forgreenheat.org/incentives/federal.html

The bill could be passed by the full Senate in the lame duck session after the November elections and before the end of the year. Some similar version would also have to pass the House of Representatives and be reconciled by a committee representing the two chambers.

Although aimed at encouraging efficient energy consumption, the bill’s vague efficiency standards definitions create what some may call a loophole for appliance manufacturers. The bill requires boilers and stoves to have a 75% thermal efficiency rating at the lower heating value (LHV); however, manufacturers are able to self-certify their efficiency using any of several formulas. The result is that virtually every pellet stove and EPA-certified wood stove on the market was claimed to be 75% efficient. This has little effect on increasing stove sales overall, but prevents the bill from incentivizing the most efficient stoves. The Alliance for Green Heat believes this is a disservice to consumers and ultimately to the industry itself, because consumers, regulators, and the renewable energy community do not see movement toward higher efficiency. The bill in its current version reinforces the image that wood stoves are a static technology that has not changed much in decades.

Wood Stove Bill in Rhode Island Should be Model for all States

A Rhode Island bill, HB 7371, would make the state the first eastern state to adopt the progressive policies of Washington and Oregon on wood stoves. The bill, introduced by representative Art Handy and four other delegates, would phase-out wood stoves without EPA certification in densely populated residential areas.

House bill no.7371 states that beginning on January 1, 2013, an individual must obtain a permit before installing a wood stove in any residential home. Permits will only be issued for EPA certified models unless they are 50 feet from any lot line and 200 feet from a neighboring home. Property owners cannot sell, rent, or lease any home with an uncertified stove that is less than 50 feet from any lot line and 200 feet from a neighboring home. Additionally, only "clean wood" can be burned, meaning natural wood free of chemical paints, varnishes, preservatives, resins, or glues.

Washington and Oregon go even further than the Rhode Island bill, by applying to all stoves in all areas of the state – not just densely inhabited ones. “In states where there would not be the political will to pass a bill that impacts the entire state, this is an excellent measure to reduce the wood smoke that has the most impact on the most people,” said John Ackerly, President of the Alliance for Green Heat.

This commonsense approach may only apply to a minority of households and would not impact those households which are most likely to heat with stoves. “Ultimately, we need to see a quicker phase out of all old, uncertified stoves and this is an excellent step in that direction,” Mr. Ackerly said.

Exceptions will be made for those demonstrating financial hardship. If a person's household income is less than 250% of the federal poverty level, he or she may continue to operate an uncertified wood stove regardless of proximity to the lot line or neighboring home.

The Alliance for Green Heat supports this bill and urges legislators to pass it.

HB 829, Summary of Renewable Energy for All Act

Purpose: to establish a renewable energy grant program in Maryland for residential wood and pellet heating units. Unlike the current renewable energy grant programs for solar, wind and geothermal, this program is designed mainly for low and middle-income families. Unlike those programs, which can provide very large grants mainly to wealthy families, this would provide a maximum grant of $1,500 so that available funds can benefit many families. The program would establish the strictest emission limits on wood and pellet stoves in the United States.

Benefits:
• Displaces expensive and carbon intensive heating fuels: oil, electricity and propane.
• Keeps heating dollars in the U.S. and often in Maryland.
• Provides jobs in rural communities.
• Provides energy independence and security.
• Provides more economic security for low-income families who would otherwise have to pay high-cost fossil fuel utility bills.
• Drives customers to the cleanest stoves and thus avoids the installation of hundreds of dirtier models.
Grant amount: 30 – 40% of purchase and installation price up to a maximum of $1,500 per family. Installation by a certified installer required.
• 30% Household income > $75,000
• 40% Household income < $75,000
• Extra $250 for the trade in of a non-certified EPA stove. The installer and/or stove retailer is responsible for handling trade-ins.

Rationale: This provides 1. larger grants for low-income families who most need it, 2. An incentive to choose the cleanest stoves on the market today, and 3. an additional incentive to get older, polluting stoves out of circulation instead of being sold on second hand market.

Equipment eligibility: Pellet stoves that emit less than 1.5 grams per hour and wood stoves that emit under 3.0 grams per hour.
Rationale: EPA currently allows up to 7.5 gr/hr for wood stoves and no upper limit for pellet stoves. The only other statewide limits are in Washington that allows up to 4.5 gr/hr and Oregon that allows up to 2.5 gr/hr for their tax incentive program. This would establish Maryland as a leader in promoting the cleanest stoves on the market today.

Household eligibility: For woodstoves, families whose primary heat is electricity, oil or propane; for pellet stoves, any household in the state.
Rationale: This would target 1. Families who have the most expensive heating systems, and 2. Rural families who do not live in densely inhabited areas and 3. Rural families who do not live in the air quality non-attainment zone that extends up and down the DC – Baltimore corridor .