More states are starting or changing their stove incentive programs to tighten eligibility, require professional installation, and often, to install an outside air supply. Until recently, incentive programs only required that wood stoves be EPA certified. And even though the EPA certifies many pellet stoves, it does not recommend EPA certified pellet stoves be required in incentive or change-out programs. Change-out programs designed and managed by the EPA and HPBA allowed virtually any new wood or pellet stove to be installed. The new trend led by states is changing all that.
The Oregon program, which began in 2013, is the most complex in terms of requirements, but provides up to a $ 1,500 tax credit. To date, the highest tax credit awarded was $ 960, according to Deby Davis of the Oregon Department of Energy.
For larger tax credits, the Oregon program requires that stoves have actual measured efficiencies and be listed on the EPA list of certified wood stoves. Only 19 stoves to date have provided the EPA with actual efficiencies and those brands are getting a bump in sales in Oregon and Maine. If the manufacturer of the stove has not provided the EPA with an actual measured efficiency, the Oregon tax credit is $ 144 for non-catalytic stoves, $ 216 for catalytic and $ 288 for pellet stoves.
The Maine program had required actual efficiencies but is in the process of changing to require emission limits only. The emission limits of 3.5 grams per hour for wood stoves and 2.5 for pellet stoves mirror the emission limits in Oregon. Despite a very generous $ 5,000 rebate for residential boilers, the Maine program provides only $ 250 per stove and it is still unclear how successful the program is.
The Maryland program is slightly stricter on emissions, with an upper threshold of 3.0 for wood and 2.0 for pellet stoves, but does not require pellet stoves to be EPA certified. As a result, it may be incentivizing some very low efficiency pellet stoves. The program is unique in that the $ 500 – $ 700 rebate is only available to homes that do not have access to natural gas. None of the three programs require that an uncertified stove be traded in for a new stove.
These programs mark a trend towards stricter eligibility for stoves incentivized with taxpayer funds. But managers of these programs are struggling with some unintended barriers and consequences. In Oregon, the program excludes all pellet stoves but one because only one pellet stove manufacturer, Seraph, has provided verified efficiency to the EPA. In Maine, the program initially required stoves to be installed by contractors with a solid fuel license, but did not provide for hearth professionals to do installations. That glitch is being changed as well.
The tax credit calculation in Oregon favors non-catalytic stoves over the cleaner catalytic or pellet stoves, which puts 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 set unrealistically high default efficiency for pellet stoves.
Oregon, Maine and Maryland require professional installation and Oregon and Maine require inclusion of outside air supply. In Oregon, this could mean simply a $ 35 vent that provides air within several feet of the stove. All three programs avoid “free riders” to some extent because even if the incentive does not lead to the sale, the state achieves important goals of professional installation, cleaner appliances, outside air where applicable, etc. Free riders is a term used for consumers who get a rebate but who would have made the same purchase regardless of the incentive.
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. This is leading Oregon and other states to consider keeping or even starting to use efficiency requirements in their incentive programs.