Pro-wood heat group opposes more time to sell dirtier stoves

On November 21, 2018, the EPA announced it was taking comment on a 2-year sell-through provision for wood stoves and on other issues in the 2015 wood heater regulation. The Alliance for Green only submitted comments on the 2-year sell-through that would allow manufacturers to build and sell Step 1 wood and pellet stoves that emit up to 4.5 grams an hour and retailers to see them until June 15, 2022.  All stakeholder comments will be available to the public by going to www.regulations.gov and typing in EPA-HQ-OAR-2018-0196. 

Comments of the Alliance for Green Heat

Responding to

The United States Environmental Protection Agency

Comments on the Advance Notice of Proposed Rulemaking; Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces

Docket No. EPA-HQ-OAR-2018-0196

Feb. 13, 2018

The Alliance for Green Heat (AGH) offers the following comments on the U.S. Environmental Protection Agency’s (EPA) Advance Notice of Proposed Rulemaking (ANPRM),Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, published at 83 Fed. Reg. 61,585 (Nov. 30, 2018). 

AGH is a national, non-partisan, non-profit association that promotes advances in wood stove technology to ensure that wood and pellet stoves become steadily cleaner and more efficient.  AGH has held four Stove Design Challenges to highlight the potential of innovative design in wood and pellet stoves and to educate policymakers and consumers.

AGH opposes any proposal to provide “sell-through” periods or to extend other compliance deadlines when there are sufficient products available that comply with EPA’s applicable standards.  Achievable emission regulations, such as EPA’s NSPS for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, are based on levels that manufacturers can meet through the use of technology that has been adequately demonstrated for the source category. These standards, that recognize such demonstrated technologies, are vital to driving the innovation process that encourages more manufacturers to develop and manufacture cleaner and more efficient stoves.  

1.    There is no technical or legal justification to change the timeline for Step 2 compliance

EPA fails to provide any compelling technical or legal basis to justify aproposed sell-through for wood stoves.  The assertion that some manufacturers and retailers would financially benefit from a delay or sell-through is not consistent with the mandates of section 111.                                                                                                                                      

Section 111(a)(1) of the Clean Air Act defines “standard of performance” as  “a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction . . . .”  42 U.S.C. § 7411(a)(1) (2013) (emphasis added).  The proposal in the ANPRM to revise the applicable deadlines does not explain why such an approach would be consistent with the requirements in section 111.  Moreover, when developing the NSPS in 2015, EPA already took into account the cost of achieving the applicable standards as well as the available technology, which is why the Agency provided 5 years for the implementation of the Step 2 standards. The ANPRM fails to state how a sell-though is consistent with the requirements in section 111 and presents no other legal justification. 

2.    The 5-year timeline in the 2015 NSPS was sufficient

The 5-year timeline provided in the 2015 NSPS was sufficient for achieving the environmental and innovation goals of the NSPS while providing flexibility to industry.  AGH supports the timelines outlined in the 2015 NSPS that allows industry flexibility during the period between 2015 and the 5 years following.  Indeed, at the time these deadlines were promulgated, industry and EPA agreed that these time frames were sufficient for industry to transition to cleaner stoves.  Unfortunately, given the information in the record for this ANPRM, it appears that industry has been spending more resources on obtaining time extensions from Congress, the Executive Branch, and the courts than devoting such financial support to research and development (R&D) and testing.  

3.    A sell-through is not justified to protect non-catalytic stoves

Apparent from the docket for this rulemaking, a form letter comments for retailers made it easier for this market segment to comment on the need for a stove sell-through.  Much of that letter made the case that the range of choice of non-catalytic stoves for consumers would diminish.  The letters noted that, while “traditional catalytic wood heaters on the market today might meet the Step 2 requirements” in the lab, the stoves on the market may not meet the requirements “over a lifetime of real-world, in-home use.” The letter went on the express confidence that “[n]ew technologies will emerge as the result of regulation with technology that will surpass Step 2 emission limits while maintaining the ease of operation that consumers demand through the lifecycle of the stove.”

This assertion in the form comment letter has simply not played out in the market.  AGH notes that 27 models of non-catalytic stoves had achieved 2020 compliance as of October 2018, and that number will likely rise when the EPA next updates the list of certified wood stoves.  While the ratio of catalytic to non-catalytic models of stoves will rise, AGH believes it is premature to artificially protect the market for non-catalytic stoves by extending a sell-through to all classes of stoves, including pellet stoves.

AGH also highlights the rise of “hybrid stoves,” stoves that use both catalytic and non-catalytic technology to reduce particulates.  These stoves offer more options to homeowners to reduce particulates, options neither catalytic nor non-catalytic stoves can fully provide on their own.

         4.    Insufficient cost data on Step 2 stoves

While we are likely to see a small rise in the price of many stoves as a result of Step 2 compliance, there is a noticeable lack of data supporting such a conclusion.  The consolidation of models may help manufacturers sell more of each model, which is likely to help keep impacts on the price of stoves to a minimum.  Some stove prices may decrease or remain the same, as we saw when some uncertified stoves were required to become certified in 2015.  Prices of stoves are likely to be equally, if not more greatly, impacted in a positive way by improved automation processes, and in a negative way by tariffs and prices of steel. 

    5.    Insufficient data on the assertion that consumers will hold off buying new stoves

There is very little data about the proportion of consumers buying a wood or pellet stove for the first time, as compared to those who are replacing an older stove.  And often families switch from wood to pellet stoves, or vice versa.  First time stove buyers and those who will buy a stove anyway, may be far more numerous than those who would have bought a new stove if it were $100 cheaper. Trends show that extremely affordable stoves are still available at big box stores, including some Step 2 models. What may be more likely to occur is that more consumers will buy the more affordable stoves from big box stores instead of specialty hearth stores. There also are a growing number of certified stoves on the second-hand marketplace; these stoves still offer a better alternative than even older, uncertified stoves.   We hope that this comment process results in more data about the assertion that a sizable population of consumers will hold on to older stoves.  

6.    2018 was a great year for stove sales

Industry argues that manufacturers do not have the resources to undertake the certification process for Step 2 stoves, and that retailers cannot financially weather the transition.  Wood stove and especially pellet stove sales are significantly influenced by cold winters, the state of the economy and other factors which can be more significant than this NSPS. However, we note that industry – both manufacturers, retailers and chimney sweeps -- have just experienced a very successful year.   A successful 2018 is helping to propel industry in the final leg leading up to 2020.  

Hearth & Home magazine routinely interviews retailers about the state of their businesses.  Only one retailer in the February 2019 issue mentioned maintaining an inventory of Step 1 products, and the retailer did not express concern regarding the business climate. The majority of retailers sell hearth, patio and barbecue products, and often the retailers express viewpoints regarding all three sectors. These magazine interviews also show that retailers have increasingly diversified products.  We reproduced all the specific comments about stoves in the February 2019 issue of Hearth & Home.  Reproduced below are retailer comments from pages 68 – 70 of the magazine. To protect the identity of the retailer, the magazine only quotes identify the state in which the retailer resides rather than the name of the retailer.

Arkansas: “2018 turned out to be a good year overall.”

California: “We have been in business for 33 years and this was the best year yet.”

California: “Hearth department was up 8%.”

Connecticut: “This was one of our top Decembers since we’ve been in business; 2019 looks to be a great year, even though we had a very good 2018.”

Illinois: “Woodburning is slowly fading away, even in a rural wooded area like ours.”

Louisiana: “Our service business is up 67%.”

Nebraska: “Hearth sales were stagnant from 2017.  All in all, business was good, but we’re interested in seeing where the trade war steel prices go, along with tariff surcharges.”

New Jersey: “Another year has flown by.  Solid growth once again.”

Oregon: “We opened a new hearth showroom in fall of 2018.”

Pennsylvania: “Best calendar year in the last five years.  Also, very profitable.”

Virginia: “Wow, what a year!  I’ve worked here for 27 years and have never seen it this busy.  Thanks President Trump.  Business is a boomin’.  Can’t wait for this coming season.  Woo-hoo. $$$.”

Virginia: “2018 ended with record sales and installations of vent-free gas fireplaces, log sets and inserts.”

Wisconsin: “No slowing down in sales of high-end fireplaces, wood and gas.  Wow, what a time in our industry.”

Wisconsin: “Overall year-end we were way up.  Wood seems to be really strong.”

Wisconsin: “Busy year.  Easily could have had greater sales if we could find another good employee.  We have had some warranty issues and manufacturers did not stand behind their product.”

Wisconsin: “Wood and gas fireplaces are strong.  Plain steel wood stoves is a weak spot.  We’re clearing inventory of all non-2020 compliant wood stoves.  Will restock only 2020 compliant.”

7.    The number of stove models will temporarily shrink

While the number of different stove models will temporarily shrink due to the increased stringency of the standards, not all consumers will notice because there will continue to be a variety of products on the market.  Many manufactures are getting around any perceived limitation of products by certifying one firebox, then offering it in a variety of models –  such as with a pedestal, with legs, or even as an insert.   More manufacturers are beginning to offer a variety of stove models, so the standards’ impact on consumers will decrease even further.

8.    There is minimal public support for sell-throughs 

In 2014, EPA received 1,750 Comments in response to proposals that set 2020 as the deadline for Step 2 compliance.  Just 5 years later, the process led by the current administration’s EPA generated only 75 comments for the sell-through for furnaces and boilers, including comments from less than 10 individual citizens.  In addition, there is no state, county or city that supports providing a sell-through for what constitutes the dirtiest appliance class among wood heaters.  Clearly, the populations that are most greatly impacted by such a sell-through, recognize that this deregulatory action increases pollution far more than the financial benefit for manufacturers.

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AGH appreciates the opportunity to submit these comments. If there are any questions regarding any statements above, please contact John Ackerly at 301-204-9562.

Trump Administration to change Obama era wood stove and boiler emission regulations

Delaying or weakening emission regulations will impact thousands of communities nationwide

The EPA is “taking steps to provide relief to wood heater manufacturers and retailers” according to a statement released by the EPA.  The EPA expects to issue a proposed rule this spring that could potentially weaken parts of the regulations enacted under the Obama administration.

January 2019 update: The EPA has proposed giving a 2-year sell through for wood boilers and furnaces, allowing manufacturers to make and sell Step 1 units right up until May 2020.  Those units could then be sold through May 2022 by manufacturers directly or by retailers. Attorney Generals from seven states filed comments saying the EPA did not have the legal authority to provide such sell-throughs, portending a legal fight.

March 2020 update: The EPA issued its final rule and decided not to provide any sell-through periods for any class of wood heater.

The April 2018 move to provide relief is supported  by companies such as Central Boiler, the largest outdoor wood boiler manufacturer in North America, who has been aggressively lobbying to delay and weaken the standards that were to come into effect in 2020. But to some smaller companies who have already invested in the R&D to meet the stricter 2020 standards, the EPA announcement undermines the significant investment they’ve made in designing cleaner and more efficient wood heaters. 

Thousands of cities, towns and communities are impacted by excessive wintertime levels of wood smoke, posing health risks and undermining support for an iconic renewable energy technology.

It is widely expected that part of the relief that EPA will be providing to industry is a three-year delay in the emission standards that were  set to take effect in June 2020.  Republicans in the House of Representatives had already passed legislation for a three-year delay, but the Senate has not.  A court filingby the EPA said that it “intends to take final action on this first proposed rule by this fall,” and that would allow manufacturers to slow down their R&D and certification testing.

But the EPA can pick and choose which parts of the Obama era wood heater regulations that it wants to rewrite and they say they will issue a series of federal register notices asking stakeholders for comment and input on substantive issues.  Experts believe that a statement released by the EPA indicate that emission test methods are being considered. 

Environmental groups, industry and the EPA have been wanting to move away from testing and certifying wood stoves with crib wood – 2x4s and 4x4s – which has been the standard testing fuel since the first set of wood stove regulations in 1988.  All parties want to switch to using cordwood, the fuel used by homeowners, recognizing that stoves have been fine tuned to run better on crib wood, rather than cordwood.  This has resulted in stoves that may run at 4 grams an hour of smoke in the lab, but may be 10 grams an hour or more in the hands of homeowners. In a statement this week, the EPA said it is concerned that its regulation“may not be achieving the environmental benefits it was supposed to provide.”  

The EPA appears likely to accelerate the transition to testing with cordwood but industry seems to favor an ASTM cordwood test method while some states and others are developing a new method that reflects how stoves are used by homeowners.  This method, call the Integrated Duty Cycle (IDC) method is still in draft form and is a drastic departure from the traditional way that stoves have been tested since the 1988.  

The EPA could also decide to weaken emission limits for wood boilers, which would primarily benefit the outdoor wood boiler industry led by Central Boiler.  

Since the 2015 regulations went into effect, scores of wood and pellet stoves and boilers have been tested to meet the 2020 standards and most prices have not gone up significantly.  The 2015 regulations began a process of requiring that manufacturers test and report their efficiencies, and delaying the 2020 deadline would set back efficiency disclosures, harming the ability of consumers to choose more efficient appliances. 

States are allowed to set stricter standards but not looser ones, and if the EPA were to weaken the federal rule too much, some states could either stick to the original standards set by the Obama administration in 2015 or develop new ones. States like New York, Oregon, Vermont and Washington are already battling long-term wood smoke problems and have started to chart their own course for wood heater regulations. If several states adopted a different cordwood test method or stricter emission standards, they could have a “California effect” of moving the entire market.

“We are very concerned that the Trump Administration  may weaken consumer and environmental protections for wood stoves,” said John Ackerly, President of the Alliance for Green Heat, an independent non-profit that promotes cleaner and more efficient residential wood heating. “Wood and pellet stoves are vital to help families affordably reduce fossil heating fuels, but we can’t move this technology forward unless they can burn cleaner in people’s homes,” he said. 

March 11, 2020 update: The EPA finalized amendments to the 2015 NSPS and did not provide a retailer sell-through or any extensions for central heaters or room heaters.  They did remove pellet fuel minimum requirements but retained the list of prohibited fuels in the 2015 NSPS.

$300 wood heater tax credit extended through 2020

Dec. 28, 2020 - Congress passed legislating signed by President Trump that gives eligible wood heaters a 26% tax credit in 2021and 2022, reducing to 22% in 2023 and expiring on Dec. 31, 2023 unless its extended.  This far larger credit, under Section 25D of the tax code, puts an end to the smaller $300 credit that was under Section 25C.

This map shows which states historically
have the highest percent of residents
claiming the energy tax credits, including
the credit for wood and pellet stoves.

Dec. 19, 2019 - Congress passed spending package that retroactively extended the $300 tax credit for wood and pellet stoves and boilers back to Jan. 1, 2018 and through Dec. 31, 2020.  This is the third retroactive extension in five years, making the tax credit an ineffective tool for both businesses and consumers to drive purchases towards higher efficiency applianes.

Stoves must be 75% efficient or higher to be eligible.  Check the EPA database of wood heaters to determine eligibility.

In January 2018, President Trump signed into law a budget deal that included a one year, retroactive extension of the wood heater tax credit for 2017.

Two pieces of legislation in the House of Representatives (Green Act and HR 4506) in 2019 would have increased the tax credit to either $400 - or 30% of purchase and installation costs, that would be more than a $1,000 credit for most purchases in specialty hearth retailers and more than  a $5,000 credit for most whole house boiler and furnaces installs.  Both of those bills were opposed by oil and gas interests who are fighting to keep their markets and by President Trump, who dismisses the need for more rapid deployment of renewable energy sources.

The two bills that would have raised the amount of the tax credit also clarified the eligibility of stoves and boilers, saying that efficiency should be measured using the North American higher heater value (HHV) calculation.  This would close several loopholes used in the past by most of the stove and boiler industry that used a European calculation with lower heating values (LHV) and sometimes using internal or optimal testing, instead of the average efficiency calculated by approved third party labs.

The tax credit in the December 2019 spending package could leave room for the main industry association, the Hearth, Patio and Barbecue Assocation (HPBA) to advise their members that they can keep self-certifying which stoves are eligible for the 75% tax credit, even if that stove or boilers is listed below 75% efficiency on the EPA's list of certified stoves and boilers. The loophole works like many Washington loopholes in that until the IRS clamps down on entities abusing a tax credit, they keep doing it.  The common sense definition of "a thermal efficiency rating of at least 75 percent" as stipulated by Congress should refer to the North American system that is accepted by the EPA and other HVAC industries.

The Alliance for Green Heat urges consumers to check with the EPA's list of certified wood and pellet heaters to confirm the efficiency of a unit and not rely on written or verbal assurances by manufacturers or retailers.

The Alliance for Green Heat is also calling on HPBA and stove manufacturers to publicly support and abide by a policy of only recognizing the average, overall efficiency of stoves based on third party testing at an EPA approved lab. In the past, virtually every stove on the market claimed to be eligible for the 75% efficient tax credit and tens of thousands of consumers were misled and purchased far less efficient heaters.   The American Council for an Energy Efficiency Economy (ACEEE) has also called on Congress and the IRS to define and enforce the 75% efficiency eligibility limit.

AGH will update this blog as it becomes more clear which companies are self-certifying stoves at less than 75% efficiency.

For more background on the wood heater tax credit, click here.

The wood heater tax credit comes and goes

Labs now test wood and pellet stoves
for efficiency but some manufacturers
ignore those tests and tell consumers
their stove are 75% efficient and
thus qualify for the $300 tax credit.

Dec. 2020 -  The $300 wood heater tax credit was about to expire on Dec. 31, but it got extended in a big way.  In 2021 and 2022, high efficiency stoves and boilers will now get a 26% tax credit on purchase price and installation costs.  In 2023, the credit will drop to 22%.  Heaters must be 75% efficient or higher, based on the efficiency provided on the EPA list of certified heaters.   See more details here.

Dec. 2019 - A federal tax credit had not in been in place for wood or pellet heaters in 2018 and 2019, but in December of 2019 it was made retroactively available back to Jan. 1, 2019 and through Dec. 31, 2020.  Congress stated that stoves needed to be 75% efficient to qualify, but manufacturers have ignored that and claim that almost all stoves qualify.

The Green Act, released by House Democrats in 2018 would have given wood and pellet heaters that are 75% efficient or higher a 30% tax credit, just like solar.  A similar bill in 2019 came very close to passing but didn't.

Feb. 9, 2018 - Today President Trump signed into law a budget deal that included a one year, retroactive extension of the wood heater tax credit for 2017.  Thus, consumers who bought stoves that are presumptively 75% efficient or higher may qualify for a $300 tax credit on their 2017 taxes.  Stoves purchased in 2018 or 2019 are not covered.  Click here for more detail on the 2017 tax credit extension.

Nov. 18, 2016 - Republican leaders on Capitol Hill say they do not intend to consider a tax extenders bill, that could have extended the $300 tax credit for wood and pellet stoves into 2017.  Currently, that credit is set to expire on Dec. 31, 2016.  Next year, a tax reform package could revive a wood and pellet stove tax credit, and make it retroactive to Jan 1, 2016.

Renewable energy and energy efficiency incentives appear less likely under a Trump administration with both houses of Congress controlled by Republicans.  A $300 tax credit for stoves was not significant enough to really tip the scales for that many consumers, and when it did they were just as likely to buy a very low efficiency stove, due to misleading advertising by most stove manufacturers claiming that nearly all of their units are 75% efficient.  This loophole that industry created has diminished support for the stove tax credit among key energy efficiency groups and may reduce its chances of being included in a bill in 2017.

Dec. 18, 2015 - The United States Congress passed a massive omnibus spending bill to fund the government and provide tax breaks to businesses and individuals.  Among them is the $300 tax credit to purchase a wood heating appliance.  The bill extends that credit through Dec. 31, 2016 and is retroactive to Jan. 1, 2015.

In a far more widely anticipated move, Congress extended the 30% tax credit for residential solar PV panels through 2019 and then gradually reduce it.  This credit was set to expire at the end of 2016 and offers that industry a level of support and certainty for strong growth.

For wood and pellet heaters, the bill extends the $300 tax credit, contained in Section 25C of the IRS tax code, which states taxpayers are entitled to a $300 tax credit for the purchase of a wood or pellet heating appliance that is 75% efficient or greater.  Consumers need to obtain a certificate from the manufacturer, stating that the appliance is qualified for the credit.

For consumers who purchased a wood or pellet stove in 2015, or who will do so in 2016, they will likely be entitled to the $300 credit if they have not used up their $500 lifetime maximum credit for energy efficient property. 

Wood and pellet stove manufacturers routinely mislead the public by claiming that virtually every single stove they make is at least 75% efficient, flouting the letter and intent of the law, which was to only qualify stoves at 75% efficiency or higher. As of May 15, 2015 all stoves and boilers certified in the US are tested for efficiency using the CSA B415.1-10 efficiency test.  This efficiency test provides a guideline for how to test and not all stoves will achieve an efficiency of 75%.

“Higher efficiency wood and pellet heaters deserve renewable energy incentives to help American families reduce reliance on fossil fuels and to encourage companies to build higher efficiency appliances,” said John Ackerly, President of the Alliance for Green Heat, an organization that advocates for wood and pellet heating. “In the past, some in industry has made a mockery of this tax credit, misleading tens of thousands of consumers into thinking they are buying higher efficiency stoves.  Its time to start measuring efficiency and reporting it honestly and only qualifying those heaters that are 75% efficient or higher,” Ackerly said.

The Alliance for Green Heat estimates that a third of all wood and pellet stoves could meet the 75% efficiency threshold, giving consumers a wide range of choices.  Appliances that are 75% efficient using the European lower heater value (LHV) are usually between 69 – 71% efficient using the North American higher heating value (HHV).  A leading industry expert, Rick Curkeet concluded in a 2008 letter to an industry trade association that "the intent of the solid fuel appliance incentive program recently enacted by Congress is ... to require a minimum of 69.8% efficiency."

Stove manufacturers are now required to disclose their efficiency and more than a quarter of all EPA certified stoves now have actual, verified efficiencies posted on the list of EPA certified stoves,  A few stove companies, such as Blaze King, Jotul, Kuma, Seraph, Travis, Woodstock Soapstone publicly disclose actual efficiencies of most of their models on the EPA website and almost all of those models appear to qualify for the tax credit.  However, other manufacturers still list one efficiency with the EPA, but maintain another efficiency definition that allows them to claim their stoves are 75% efficient to qualify for the tax credit.

Unlike other heating and cooling appliances, prior to May 2015 wood and pellet heating appliances did not have to test or report efficiencies and there are still few accepted norms on advertising practices.  Websites and promotional materials of many major stove brands contain exaggerated efficiency claims, some of which may come from the company’s internal laboratory, not from a reputable, third party lab.