Transforming Wood Heat in America:
A Toolkit of Policy Options
About this Report: This year-long project, partially funded by the US Forest Service Wood Education and Resource Center (WERC), explores the existing and potential policy options for incentivizing more efficient and clean burning residential wood heat. The project involved intensive stakeholder consultations with industry, non-profits and government. A primary goal was to explore how to increase the ability of Americans of all socio-economic groups to use wood heat and reduce reliance on fossil fuels. The report was written by John Ackerly and Tatiana Butler of the Alliance for Green Heat with the assistance of the Wood Heat Task Force (see link below). Many thanks to Alliance research fellows: Keith Krosinsky, Elizabeth Klusinske and Jordan Townsend.
The full version of the report, as well as a 16 page summary report, are available for download by clicking on the links below. The full version can also be accessed from this webpage by navigating the chapters listed in the sidebar on the right-hand side of the screen.
As traditional fossil fuel prices continue to rise and concerns about environmental impacts and dependency on foreign oil deepen, governments are increasingly turning to renewable energy. Modern wood heat systems should be part of all federal and state renewable energy programs. With wood heat, the challenge is to phase out and changeout dirtier and less efficient stoves and boilers, and start incentivizing the cleanest ones. We are far behind Europe in the process, but in recent years, scores of officials and policy makers are starting to look at harnessing the potential of modern, highly efficient wood heat.
Wood heat is by far the most common residential renewable energy in America with about 2% of the population using it as a primary heating source, and 8% of the population using it for secondary heat. Because of the sheer number of installations, estimated at about 15 million units by the DOE, wood heat offsets far more fossil fuel than all the other residential renewable energies combined – solar PV, solar thermal, geothermal and wind. By the yardstick of reducing fossil fuel wood heat is a renewable energy success story. However about 75% of the existing installations of wood and pellet systems in the U.S. are outdated and too polluting. This report explains how we can harness the capacity of biomass heat by incentivizing the cleanest stoves and boilers.
The Alliance for Green Heat interviewed over 150 stakeholders for this project including air quality experts, foresters, incentive program officers, industry leaders, manufacturers, EPA regulators and many others. In addition, a Wood Heat Task Force from these stakeholder groups provided extensive input and feedback.
– Years ago, wood heat became an energy efficiency measure, not a renewable energy in Congressional incentive policy. This has left even the very cleanest wood heat technologies with only a 10% tax credit up to $300, whereas other residential renewable energy systems like solar and geothermal receive 30% with no cap. In Europe modern, high efficiency wood and pellet systems often receive ten times that support, on par with other renewable energies. Since modern wood heat is a cost effective way to move the country towards less dependence on fossil fuel and is affordable to low and middle-income families, it makes little sense for it to be left out of the federal renewable energy tax policy.
- Some state renewable energy programs are beginning to include biomass appliances. Three of the most prominent state-wide programs are the Oregon and Montana tax credit for stoves and the New Hampshire rebate for pellet boilers. Alabama also provides a tax deduction to switch from electric or gas heat. Five states have low interest loan programs that include wood burning appliances. Other state rebate programs have expired. Several states have long-standing incentive programs to change out older stoves, and replace them with new EPA certified ones including Idaho and parts of California and Washington State. Both Vermont and Michigan had statewide rebates for changeouts that have expired. While these programs are primarily designed for air quality goals, they also are a very cost-effective ways to more efficiently produce renewable energy and reduce fossil fuel use.
In states that do not include modern, high efficiency wood heat in renewable energy programs, interviews with incentive program managers reveal that there is no consistent reason why modern wood systems have not been included.