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

Outdoor boilers cleaner than wood stoves, boiler lobby tells Utah legislators

Legislators move to overturn outdoor boiler regulations

In a heated fight over whether outdoor boilers should be allowed in areas of Utah with poor air quality, the outdoor boiler lobby is trying to sway lawmakers with data that purports to show that boilers are cleaner than wood stoves.

However, the opposite is usually true.  Wood stoves tend to be far, far cleaner than conventional outdoor wood boilers.  Data provided by Central Boiler was deliberately misleading, and was dismissed by experts.

(Update: The outdoor wood boiler lobby was not successful and in March 2013 Utah passed regulations that restrict what types can be installed in Utah.)

The lead Utah resident pushing for regulations that would allow outdoor boilers, Daniel Leavitt, represented himself as a concerned citizen to the Utah Air Quality Board, and the Utah paper refers to him as a resident who operates his outdoor wood boiler to heat his home. But what the paper didn't mention is that Leavitt is also a prominent Utah lawyer specializing in government relations and the brother of the former Governor of Utah. In addition, Leavitt was being paid by Central Boiler, the boiler manufacturer leading the campaign.

In February, Utah adopted regulations that allowed the installation of Phase 2 outdoor boilers in most of the state but banned them in populated areas that do not meet federal air quality attainment standards. Central Boiler had fought against the regulations but were ultimately unsuccessful. 

After the regulations were promulgated, the boiler manufacturer took its case to the legislature. On March 7, a near unanimous legislative committee sided with Central Boiler. They approved HB394, which “prohibits the Air Quality Board from regulating the sale, installation, replacement, or operation of an outdoor wood  boiler differently than other solid fuel burning
 devices.” Om March 11, the bill was passed by the Utah House and moved to the Senate.

Central Boiler submitted comments arguing that Phase 2 outdoor boilers “are cleaner than EPA certified wood stoves.” David Leavitt, the "concerned citizen" hired by Central Boiler, is also carrying that message. "These outdoor wood boilers are vastly more efficient than burning anything indoors," he told the Deseret News.  

“Utah legislators should understand that even the best wood stoves and wood boilers are only as clean as the wood that is loaded in them,” said John Ackerly, President of the Alliance for Green Heat, a independent non-profit promoting cleaner and more efficient wood heating. Outdoor wood boilers have fireboxes usually ranging from 14-60 cubic feet while a wood stove firebox is 2-3 cubic feet.

"Outdoor boilers are often loaded with large, unseasoned and unsplit logs and trash, unlike stoves. This is a key reason that states regulate outdoor wood boilers and not stoves. Central Boiler advertisements showing efficiencies in the 90s are based on calculations that have been repudiated by the EPA," Ackerly added.

The Utah Department of Environmental Quality (DEQ) said the objections that that Central Boiler and Hearth, Patio and Barbecue Association (HPBA) had with the regulations were “similar” and publicly responded to them. Privately, some people say the positions of Central Boiler and HPBA had key differences but the public record does not reveal what they were.  

According to the Utah DEQ, the issues raised by Central Boiler and HPBA included:

• DEQ appears to place greater weight to various out-of-state agencies and others who are generally skeptical towards the emissions reduction results achieved under the US EPA hydronic heater program.
• DEQ has not provided scientific data or other rationale supporting what types of outdoor wood boilers were allowed under the rule.
• DAQ has not published any data showing that outdoor furnaces currently make impacts within the nonattainment and maintenance areas or that they will contribute to the exceedance of the NAAQS.
• The 1000 ft. setback from schools is not necessary based on modeling conducted by the State of New York.

In response to the first proposed regulations, Central Boiler argued that the “rule lacks scientific support and would unfairly prohibit Utah residents from purchasing and using clean-burning wood furnaces.” A main thrust of Central Boilers argument is that Phase 2 boilers “are cleaner than EPA certified wood stoves.” Specifically they claim that “average emissions for a Phase 2 OHH are 77% less than those from EPA-Certified woodstoves.” The full submission by Central Boiler can be found here.

"These outdoor wood boilers are vastly more efficient than burning anything indoors," Levitt said.

In response to repeated misleading advertising practices, the EPA sent letters to outdoor boiler manufacturers requesting them to desist from certain claims and statements.  

The EPA listed actual efficiencies of Phase 2 outdoor wood boilers at 39 to 78% efficient in 2013 with an average of 63%.  In 2016, after all boilers were required to meet EPA emission and safety regulations, efficiencies rose to an average of 74% and a top rated unit at 82% efficiency. As of November 2017, many units are above 85% efficiency and the highest at 90% efficiency.

Update, 3/13/13: The Alliance for Green Heat is organizing a sign-on letter to the Utah Legislature urging them to not vote for the Senate bill without at least a full hearing. Click here for more details. 

Congress May Extend Biomass Stove Tax Credit

Alliance for Green Heat, July 25, 2012 - The 25C tax credit for wood and pellet stoves and boilers that began at $1,500 in 2009, dropped to $300 in 2011, and then expired last January, may return.  While nothing is expected to be passed in Congress before the election, a variety of bills could be passed soon after, during what is known as a “lame duck session”.

One possibility is that Congress will simply extend the 2011 version of the bill, which would cap the tax credit for 75% efficient (LHV) biomass heaters at $300.  There has been talk of implementing this retroactively, so that purchases made earlier this year would be eligible for the tax credit.  Another option would be for legislators to create a standalone bill that could change the eligibility criteria and raise the credit up to $500 or even $1,000.

Various organizations in the biomass space are pushing for an extension of 25C, including the Alliance for Green Heat, Hearth, Patio & Barbeque Association, the Pellet Fuels Institute and the Biomass Thermal Energy Council.  For more background on the tax credit, see http://www.forgreenheat.org/incentives/federal.html, and for background on attempts to establish an alternative performance-based credit, see http://www.forgreenheat.org/incentives/homestarpage.html.

The currently expired 25C tax credit was a cost-based credit, meaning it was based on what the consumer spent on their biomass heater – not the amount of energy saved.  Many in the energy community, including the three big non-profit players in DC – the American Council for an Energy Efficient Economy, National Resources Defense Council and the Alliance to Save Energy – have been trying to craft and push a performance-based credit. This would involve having an energy auditor measure the expected energy savings and then basing the total credit on that. 

The 2010 Home Star bill and the 2012 HOMES Act were both performance-based systems but the legislation never passed.  Congress asked the GAO to study which system would be more cost-effective and would result in greater energy savings.  The report found strengths and weaknesses in both approaches and did not make any recommendation about which one was better.  Here is part of their summary:

Under criteria for evaluating a tax credit design, both the performance-based and cost-based credits have advantages and disadvantages with neither design being unambiguously the better option based on current information.

Both a cost-based and a performance-based credit are designed to reduce energy use and CO2 emissions by providing incentives for energy conservation investment. However, they differ in their relative effectiveness and costs. In general, a performance-based credit is more likely to effectively reduce energy use and CO2 emissions because it rewards energy savings from the investment rather than the cost-based credit’s rewarding of spending regardless of whether this spending results in energy savings.

However, the performance-based credit may have significant up-front costs for energy audits, not required by the cost-based credit, which could reduce its effectiveness by discouraging investment. In addition, for taxpayers who do invest, these up-front costs may mean that a performance-based credit may have significantly higher taxpayer compliance and IRS administrative costs than a cost-based credit. A credit’s fairness depends on subjective judgments of how a credit varies with a taxpayer’s income level.

Various groups took issue with the GAO’s report, including the National Association of Home Builders (NAHB) who found that it missed the bigger picture. They said in a recent blog post that “failure to extend the 25C tax credit undermines a successful policy that created jobs in the hard hit residential construction sector and yielded long-term gains for homeowners’ energy bills.”

Maryland to Give Rebates for Wood & Pellet Stoves

For Immediate Release
Thursday, April 12, 2012 

Contact: 301-841-7755

Maryland to Give Rebates for Wood & Pellet Stoves

The Maryland Energy Administration (MEA) is starting a $50,000 pilot program that will provide rebates for partial payment of qualifying wood and pellet stoves.  The pilot program will start later this year and operate on a first come, first serve basis.

“This program will extend our renewable energy incentives both to a different technology and to a potentially a diverse group of participants including those in rural parts of Maryland,” said Frederick Hoover, Director of Clean Energy at MEA in a letter to Delegate Heather Mizeur.  The Maryland delegate was the lead sponsor of the bill HB 996, the Renewable Energy for All Act, which laid the groundwork for this pilot program.

“We are thrilled that the cleanest wood and pellet stoves will finally be part of Maryland’s renewable energy rebate program,” said John Ackerly, President of the Maryland based non-profit, the Alliance for Green Heat.  “Throughout the US, rural low and middle-income families struggle to pay their heating bills while generous rebates and tax-incentives flowed to some of our wealthiest citizens to install solar panels.  A $3,000 pellet stove can displace as much fossil fuel as a $30,000 array of solar panels,” Ackerly explained.

The Alliance for Green Heat led a coalition of Maryland organizations, businesses and consumers during the two-year push to establish this program.  The program was supported by the Maryland Clean Energy Center, the Chesapeake Climate Action Network, the Metropolitan Washington Council of Governments, the Mid Atlantic Hearth Patio & Barbecue Association and many other groups.  Hearth retailers in the state, led by Richard Thomas of Courtland Hardware and Suzanne Turner of Survival Products also campaigned for the program. The coalition was especially trying to help rural Maryland residents who do not have access to natural gas and heat with the most expensive fossil fuels: oil, propane and electricity. 

“At a time when millions of Americans are out of work and struggling to pay bills, this is a way to help families affordably heat their homes and switch to a renewable, local energy source,” Ackerly said.

Delegate Heather Mizeur, who represents Maryland District 20 that shares a border with Washington, DC, included this message to her constituents:

“While grant programs help Marylanders purchase solar, wind, and geothermal energy systems, the cost of these systems is out of reach for most families. The Renewable Energy for All Act would incentivize the purchase of biomass systems that generate heat energy via wood and corn pellet products, helping families switch to a less expensive heat source and participate in our clean energy future. … Homeowners with less efficient stoves could also receive a $200 change-out grant to replace their old stove with a more efficient, cleaner burning unit.”

During negotiations with the Maryland Energy Administration HB 996 was amended to focus on a pilot program with MEA funding.  The House committee of jurisdiction voted against the amended bill, but MEA has reaffirmed their commitment to undertake the program.

HOMES Act includes rebates for wood appliances

The HOMES Act, H.R. 4230, recently introduced by Rep. McKinley (R-WV) and Peter Welch (D-VT), would incentivize homeowners to undertake comprehensive energy-saving improvements. By creating a rebate program, the legislation would help homeowners afford specific home energy efficiency retrofits, including a combination of better windows, insulation, heating equipment, etc. that lower energy consumption and cost. The bill would authorize $500 million for the rebates each year from 2013 to 2016. Included are wood and pellet stoves that emit 3.0 grams an hour or less and boilers that emit .07 lbs per million BTU.

The HOMES Act, which stands for Home Owner Managing Energy Savings, is a departure from tax credits or rebates for particular appliances that the IRS used and Home Star would have used. It is based on performance and requires a professional energy audit to show how much energy is saved. It starts at $2,000 for homeowners who can demonstrate 20 percent savings and goes up incrementally to $8,000 or 50 percent of the project’s cost, whichever is less.

The emissions limits alone would include a vast majority of pellet stoves (90% or 178 out of 199 pellet stoves on the Washington state list are 3.0 or under). For wood stoves, it would include less than half of existing models (40% or 231 out of 572 wood stoves on the Washington State list are 3.0 or under). For outdoor wood boilers, there are four out of 30 boilers (two wood and two pellet) on the EPA’s list of qualified outdoor boilers that would qualify for the emissions threshold.

In addition, stoves have to be third party tested to a minimum of 75% efficiency (HHV) and boilers 80% efficiency. The HOMES Act pulled some language from the Home Star legislation, which never passed but stricter emission limits were added for boilers. Below is the full text of requirements for biomass appliances:

(c) Qualified Home Energy Efficiency Expenditures- For purposes of this section, the term `qualified home energy efficiency expenditures'--

(1) means any amount paid or incurred by a homeowner for a qualified home energy efficiency retrofit, including the cost of diagnostic procedures, labor, and modeling; and

(2) does not include--

(A) improvements to swimming pools or hot tubs; or

(B) any amount paid or incurred to purchase or install a biomass, wood, or wood pellet furnace, boiler, or stove, unless the system--

(i) is designed to meet at least 70 percent of the heating demands of the home;

(ii) in the case of woodstoves, is certified by the Environmental Protection Agency;

(iii) in the case of a wood stove replacement, replaces an existing wood stove with a stove that is certified by the Environmental Protection Agency, if a voucher is provided by the installer or other responsible party
certifying that the old stove has been removed and made inoperable;

(iv) in the case of a furnace or boiler, is in a home with a distribution system (such as piping, ducts, vents, blowers, or affixed fans) that allows heat from the furnace or boiler to reach all or most parts of the home; and

(v) is certified by an independent test laboratory approved by the Secretary as having--

(I) thermal efficiency (with a high heating value) of at least 75 percent for stoves and 80 percent for furnaces and boilers;

(II) particulate emissions of less than 3.0 grams per hour for wood stoves or pellet stoves; and

(III) less than 0.07 lbs per million BTU for outdoor boilers and furnaces.

Summary of the bill:
http://ase.org/resources/home-owner-managing-energy-savings-homes-act-2012

Entire text of bill:
http://thomas.loc.gov/cgi-bin/query/F?c112:1:./temp/~c112gmJBK5:e15634:

Central Boiler Responds to Rhode Island Outdoor Boiler Story

Last month, we posted a story which also ran in our newsletter about attempts in Rhode Island to pass legislation on outdoor wood boilers. We received several interesting communications as a result and wanted to update that story - and correct ourselves.

One of the communications was from Central Boiler, who gave us permission to quote from their email. They rightly pointed out that we failed "to make mention of the most recent Rhode Island Department of Environmental Management’s Regulation No. 48 which became law April 14, 2011." That regulation requires that all outdoor boilers installed after July 1 are Phase 2 qualified and Central Boiler was not opposed to this regulation.

Central Boiler also noted that the Alliance for Green Heat mistakenly indicated that Pennsylvania has established a 150 foot set back, whereas in fact it is 50. We stand corrected.

Also, Central Boiler said that they had "NOT taken out any ads regarding the Bills" in Rhode Island, as the Alliance had alleged. However, the Alliance has in its possession a paid advertisement on page 11 of the March 30 edition of the Rhode Island “Bargain Buyer” signed by Central Boiler and apparently taken out by a Central Boiler dealer or agent. The ad urges owners of outdoor wood boilers to contact their legislator to oppose H5783.

The Alliance for Green Heat believes that the EPA should have established a mandatory program for outdoor wood boilers years ago, requiring that only Phase 2 boilers be installed anywhere in the country. We also support the provision in H5783 that would have required that non Phase 2 boilers be removed upon the sale or rental of a home and that outdoor boilers be set back 150 feet from the property line.

While the Alliance for Green Heat and Central Boiler do not agree on many things, we appreciate the open and respectful dialogue we have with them.

Commentary: Innovative Rhode Island Hydronic Heater Bill Stalls

Rhode Island residents and legislators have some innovative ways to combat the residential hydronic boilers that are often highly polluting. H5783, which went through numerous changes, required anyone selling or renting property with a traditional hydronic heater to remove it, as Oregon does with non-EPA certified stoves.

The bill would also require traditional hydronic heaters to be located at least 150 feet from the nearest property, requiring some owners to move or potentially stop using their boiler.

However, the bill did not pass during the 2011 session. Rhode Island is that last northeastern state to establish property setbacks for hydronic heaters. The leading hydronic heater company, Central Boiler, has vigorously lobbied against various bills that would have provided regulations for outdoor boilers. They have also taken out paid ads urging boiler owners to contact their elected representatives.

The Alliance for Green Heat believes that H5783 Substitute A was a very reasonable bill that balanced the interests of stakeholders. It required that only Phase 2 boilers could be installed after January 1, 2012 and established a 150-foot property set back requirement, which is more than Central Boiler wants but less than what air quality experts are advocating for. Pennsylvania recently adopted a 150-foot rule.

The bill did not have any seasonal restrictions such as the ones that Indiana and areas in Massachusetts have successfully included in their regulations, nor does it have other protections. However, the phase out provision that requires removal upon sale or rental of home is a promising provision that should be considered by all states.

Traditional hydronic heaters that are not qualified under the EPA’s voluntary program are viewed as the scourge of residential wood heating by many in the US, including some within the wood heat industry. States that have not passed bills establishing set backs and other important protections should do so, and they should look at some of the provisions in H5783. We believe H5783 could have been even stronger, but too often bills in places like Rhode Island and Connecticut have failed because companies like Central Boiler have resources to stop them while clean air advocates were pushing for measures that were politically unrealistic.

This is at least the third year that the Rhode Island legislature has failed to pass a hydronic heater bill, leaving their constituents vulnerable to excessive wood smoke. We hope next year the legislature will muster the common sense to do what all other states in the Northeast have already done.