Senators Propose Adding Wood and Pellet Heat to Renewable Energy Incentives

For years, homeowners have enjoyed a 30% tax credit on the cost of installing solar panels on their home or adding geothermal heat.  In Europe, virtually every country also includes automated, high efficiency pellet stoves and boilers. Why hasn’t it happened here?

Senators Angus King (I-ME), Susan Collins (R-ME), and Jeanne Shaheen (D-NH) introduced the Biomass Thermal Utilization (BTU) Act to do just that. The tax credit for solar panels has disproportionately benefited wealthy urban and suburban residents, who can already afford fossil fuel energy, but want to help the planet. By adding tax credits for modern wood and pellet stoves, you benefit a more rural demographic that is not necessarily trying to be “green” but who are merely wanting to use a more affordable fuel than fossil fuels to heat their homes. 

Congress can pick and choose which technology it wants to favor, and which demographic it wants to favor.  But a more technology neutral approach has many benefits and the case for high-efficiency wood and pellet appliances is a strong one: it displaces about the same amount of fossil fuel as the average solar panel installation. Wood and pellet stoves have a shorter payback period, which makes it more likely that a middle-income family chooses a pellet stove. The technology is less expensive thus it costs the tax-payer far less to displace the same amount of fossil fuel. Utilizing thermal biomass helps ordinary families without access to natural gas that struggle to pay high heating bills. The BTU Act extends technology options to low and middle income families.

The BTU Act will add a provision to include biomass fuels to the list of existing technologies that qualify for the residential renewable energy investment tax credit in Section 25d of the Internal Revenue Code. To qualify, the property utilizing biomass fuel must operate at a thermal efficiency rate of at least 75% HHV and be used to either heat space within the dwelling or to heat water. The BTU Act allows for both wood and pellet appliances to be eligible but the 75% higher heating value (HHV) means that only the most clean and efficient ones will be incentivized.

The justification for solar subsidies is not just the displacement of fossil fuel, but also to help an emerging technology off the ground so that it can be cost competitive without subsidies.  Pellet stoves and boilers need a similar boost.  The higher up front cost of a pellet stove or boiler is a major deterrent and until there is greater demand, when the per unit cost is likely to drop. Like solar, there needs to be a more robust infrastructure to permit, install and repair the appliances.  Over 10 million Americans use wood or pellet stoves to heat their homes but only perhaps 20% have modern high efficiency appliances that do not emit smoke. If our country is to switch to modern, clean, high efficiency wood and pellet heating, we need to incentivize those appliances.  Our current approach is not working.

Urge your Senator to become a sponsor of the BTU Act, click here:

http://www.forgreenheat.org/act/act.html

For more information: BTEC link

http://www.biomassthermal.org/legislative/action.asp

U.S. Government Winter Fuels Outlook Includes Pellets and Wood for First Time

EIA Administrator Sieminski says wood pellets represent a “significant opportunity” for consumers to save money

October 10, 2012 - The U.S. government released its annual assessment of prices and availability of heating fuels today and for the first time it included information on pellets and firewood. After gas and electricity, wood is the third most common heating fuel in America, but the annual Winter Fuels Outlook had never discussed it prior to the 2012-13 heating season.

The Winter Fuels Outlook is put out by the U.S. Energy Information Administration (EIA), an independent statistical and analytical agency within the Department of Energy. Reports published by the agency are the premier source of energy information in the country and are used to guide economic policy and educate the public.

During today’s press conference, EIA Administrator Adam Sieminski mentioned the “significant opportunity” for consumers to supplement their oil heat with wood pellets, as well as with electricity.

The inclusion of wood and pellets in the Winter Fuels Outlook came after over a year of discussions and meetings between the EIA and a coalition of wood and pellet groups. Senator Shaheen (D-NH) also raised the importance of pellets as an alternative to oil in New England with Administrator Sieminski.

According to the EIA, wood and pellets now produce more residential heat in the US than propane and nearly as much as oil. Wood produces 0.5 quadrillion Btu (quads) per year, propane 0.49 quads and oil 0.6.

EIA projects that average household expenditures for heating oil and natural gas will increase by 19 percent and 15 percent respectively over last heating season. The agency expects the country will experience colder temperatures compared to last year's mild winter, with oil and gas prices remaining virtually the same.

In terms of wood and pellets, the report said:

Wood consumption in homes has risen over the past 10 years, reversing a trend seen in the last two decades of the 20th century. In 2009, U.S. households consumed about 0.5 quadrillion Btu (quads) of wood. Household fuel oil consumption, by comparison, was only slightly higher at 0.6 quads. In homes across the United States, wood is most commonly used as a secondary source of heat and is second only to electricity as a supplemental heating fuel. Twenty percent of New England homes (1.1 million) used wood for space heating, water heating, or cooking in 2009 (EIA, Residential Energy Consumption Survey, 2009). This is nearly twice the national rate. Almost half of all rural households used wood in this area of the country. In contrast, only 12 percent of urban New England households used the fuel.

According to data previously published by the EIA, the average American household heating with wood consumes two cords of wood per year. This number includes homes that use wood or pellets as a primary, secondary or occasional heat source. The EIA also documents that consumption in rural areas is more than twice that of urban areas. The EIA estimates that 91% of homes that heat with wood use firewood, 8% use wood scrap and 6% use pellets.



Wood use also trends strongly with income level, according to EIA survey data, with households making $20,000 or less using more than twice the amount of wood as households making $120,000 or more. 

“The EIA’s focus on wood and pellets is an important and timely step in the right direction,” said John Ackerly, President of the Alliance for Green Heat, a non-profit consumer organization based in the DC area. “If EIA can report on pellet prices along with oil and propane, consumers will be better equipped to make the best choices for them, which may be to use a local, renewable fuel,” Ackerly added.

For a full copy of the Winter Fuels Outlook: http://www.eia.gov/forecasts/steo/index.cfm 

Wood and pellet stoves in Congressional Winter Fuels Outlook

Winter Fuels Outlook includes wood for first time

For the first time, wood and pellets are included in the annual Winter Fuels Outlook produced by the Congressional Research Service (CRS). The Alliance worked with CRS, the offices of Senator Shaheen and Congressman Van Hollen and others to ensure that wood and pellets are recognized as an important winter fuel.  The CRS report summarizes a more detailed report from the Energy Information Agency, which has still not included wood and pellets.