Policy
Congress
Updated: June 2024
The role of Congress was relatively limited for residential wood heating until 2020 when wood heating appliances were included under Section 25D of the Internal Revenue Code, giving a 26% tax credit on wood and pellet heaters that are at least 75% efficient and installed before December 31, 2022. Currently, the tax credit is now at 30% for wood and pellet heaters installed between December 31, 2021 and January 1, 2033. Stay up to date on the status of the tax credit on our Federal Tax Incentives page.
Tax credits for wood residential wood heaters in the United States began in 2005, expired in 2007, and were restarted in 2009 at $1,500, dropped to $300 in 2010 and stayed at that level off, and on, through the end of 2020. For more details on this lower tax credit that Congress periodically offered to wood and pellet heaters, click here.
Many bills have been introduced to gain more parity between thermal biomass and other renewables over the past 5 years. Residential solar and geothermal have enjoyed a federal 30% tax credit for many years. Wood and pellet heaters only recently joined the 30% tax credit ranks.
​Congress did set the stage for federal regulation of wood and pellet equipment by passing the Clean Air Act in 1970. Section 111 of the Clean Air Act (42 U.S.C. 7411) gives the EPA authority to regulate particulates and other pollutants from wood and pellet stoves and boilers. In 1988, the EPA implemented a New Source Performance Standard (NSPS) for wood heaters. This standard was updated in 2015.
Congress did set the stage for federal regulation of wood and pellet equipment by passing the Clean Air Act in 1970. Section 111 of the Clean Air Act (42 U.S.C. 7411) gives the EPA authority to regulate particulates and other pollutants from wood and pellet stoves and boilers. In 1988, the EPA implemented a New Source Performance Standard (NSPS) for wood heaters. This standard was updated in 2020.
Recently introduced legislation concerning wood heating and wood products include the 2023 Community Wood Facilities Assistance Act, the Firewood Banks Act of 2022 (not enacted), and the 2021 Biomass Thermal Utilization Act (not enacted). Two energy acts introduced in 2021, the Clean Energy Innovation and Deployment Act (not enacted) and the American Energy Efficiency Act (not enacted), included combined heat and power systems that uses qualified renewable biomass ("closed-loop biomass"). The Community Wood Facilities Assistance Act is still active in the 118th Congress, currently having been referred to the Committee on Agriculture, Nutrition, and Forestry.
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Members of Congress also can put pressure on federal agencies to focus more on residential wood heating. Senator Shaheen (D-NH) with the Energy Information Agency led that Agency to expand its reporting on wood heat. And, Senator Collins (R-ME) worked with the federal Department of Housing and Urban Development to change guidelines to allow FHA-insured homes to use wood pellet heating systems as a conventional heating source.