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Congress to Extend Wood Heater Tax Credit through 2016

Posted by Earth Stove on December 19, 2015 with No Commentsas , , , , , ,
Labs test wood and pellet heaters for
efficiency and ones that are 75%
efficiency or  higher  can qualify
for the $ 300 tax credit.

The United States Congress is on the verge on finalizing a massive omnibus spending bill that would 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 is poised to extend the 30% tax credit for residential solar 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. 
For wood, pellet stove, and boiler manufacturers, the process of issuing a certificate claiming their appliance is 75% efficient may be more complicated than in the past.  In previous years, manufacturers claimed that every single stove they made was at least 75% efficient, flouting the letter and intent of the law, which was to only qualify stoves at 75% efficiency or higher, measured by the lower heating value (LHV). 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, using the lower heating value,” Ackerly said.
The Alliance for Green Heat estimates that up to half of all wood and pellet stoves and boilers 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 do not have to publicly disclose their efficiencies and very few of them doA 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.  The EPA considers higher heating value as a more accurate measure of efficiency for devices in the U.S. and therefore uses only those number on its list of EPA certified wood and pellet stoves.  
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.  

Heated Up!

Wood and Pellet Stove Tax Credit Extended through Dec. 31, 2014

Posted by Earth Stove on July 16, 2015 with No Commentsas , , , , , , ,
Stove manufacturers routinely claim
75% efficiency to be eligible for the
tax credit, even when stoves are far
below 75%.  The average wood and
pellet stove may be around 70%.

Updated on December 16, 2014 – A short term extension of the $ 300 federal tax credit to purchase a new wood or pellet stove was signed into law by President Obama on Dec. 19, after having passed the House and the Senate.

The law extends a host of tax provision through Dec. 31 2014, making it almost entirely a retroactive tax credit.   A two-year deal that would have extended selected tax credits through Dec. 21, 2015 fell through.





The tax credit, which started out at $ 1,500 applied to all stoves that were at least 75% efficient.  The stove industry used a loophole to help ensure that all EPA certified wood stoves and all pellet stoves could claim to be 75% efficient.  As a result, many consumers are unwittingly buying stoves that may be less than 60% efficient, or even less than 50% efficient.  Pellet stoves in particular can be very low efficiency, saddling consumers with unnecessarily high pellet fuel bills.

Because of this loophole, the stove tax credit has long been criticized in the energy efficiency community as being dominated by “free riders” because the credit applies to virtually every stove and does not push consumers toward the most efficient ones. Instead of giving consumers an incentive to buy higher efficiency or “greener” appliances, like Energy Star appliances that help people save money, the government has been giving a discount to all wood and pellet stoves (other than uncertified, exempt wood stoves.) 

Of the hundreds of stove models on the market, manufacturers have only disclosed actual, third party verified efficiencies for about 20 models and they are listed here. Blaze King is the only stove manufacturer who discloses actual efficiencies for all their models.  To date, all the major pellet stove manufacturers have refused to disclose any actual efficiencies.  Seraph Industries, a very small pellet stove maker, has disclosed their efficiencies and they are quite high.
The EPA, nor any other federal or state agency involved in wood and pellet stove education, warns consumers that they are not necessarily buying a 75% efficient stove, as promised by manufacturers who issue certificates assuring consumers that their stoves are eligible for the tax credit.
The Alliance for Green Heat has been a long-time advocate of a robust tax credit, but only for stoves that are genuinely cleaner and more efficient.  The federal tax credit has never incorporated particulate emissions into its eligibility requirements.
Consumers who bought a stove in 2014 can claim the credit on their 2014 taxes, assuming they have not exceeded the $ 500 limit for residential energy improvements.  

In addition to the federal tax credit, more states are beginning to offer incentives, including Idaho, Oregon, Maryland, Montana and New York.  

Heated Up!