WASHINGTON, D.C. – U.S. Senators Angus King (I-Maine) and Susan Collins (R-Maine) are reintroducing bipartisan legislation that would incentivize the use of energy efficient biomass heaters in homes and businesses instead of relying on fossil fuel energy. At the end of 2020, after years of advocacy from the Maine delegation, a 26 percent tax credit for highly efficient residential wood heating systems available through the end of 2023 became law. This Congress, the updated Biomass Thermal Utilization (BTU) Act would amend the federal tax code to incentivize the use of energy efficient wood boilers, stoves and heaters through tax credits for capital costs incurred in commercial and industrial installations. The bill will also extend the residential credit passed last year through 2028. Many other forms of renewable or efficient energy have been eligible for tax credits for a number of years; this bill seeks to achieve parity between those systems and thermal biomass systems. By offering these incentives, the legislation would encourage people and businesses to upgrade away from oil boilers to efficient wood-pellet boilers.

“Biomass has proven to be an affordable and sustainable alternative to keep homes and businesses warm during the cold Maine winters, while also creating new opportunities for Maine’s forest products industry,” said Senator King. “Our bipartisan bill would encourage homeowners to pivot to this cleaner, cheaper method of heating, and support our state’s historic forest industry in the process. Utilizing our state’s plentiful natural resources to meet our energy needs is a win-win, supporting local economies and providing Maine consumers with cost-effective and efficient fuels.”

“Wood biomass is a cost-effective, renewable, and environmentally friendly source of energy that helps individuals heat their homes in the winter months and creates jobs here in Maine,” said Senator Collins.  “By providing biomass thermal energy technologies the same tax treatment as other forms of renewable energy, this legislation would encourage the use of highly efficient biomass heating systems.”

"Passing the BTU Act would be a big win for the Maine economy and the health of the forest. The increased demand for biomass heating systems would put more Mainers to work and incentivize businesses to make the switch from oil and gas heating systems,” said Dana Doran, Executive Director of the Professional Logging Contractors of Maine. “If this bill passes, it will create jobs, reduce Maine's carbon emissions, and allow forests to be properly managed by strengthening the market for low grade wood fiber. We are very thankful for the continued leadership of Senators King and Collins on this vital piece of legislation."

“We applaud Senators King and Collins for reintroducing the BTU Act. This important legislation will increase the affordability of today’s efficient and clean burning wood and pellet heaters,” said Jack Goldman, President & CEO of the Hearth, Patio & Barbecue Association. “This means more money in consumers’ pockets and cleaner air in their community. Small businesses who have just gone through an unprecedented year of uncertainty and losses will greatly benefit from having a tax credit to incentivize customers to do some shopping and purchase that next-level wood or pellet heater.”

Specifically, the BTU Act would:

• Underscore that heat from biomass is an underutilized energy source in the United States.
• Add biomass fuel property to the list of existing technologies that qualify for the business investment tax credit (IRC section 48) at an initial rate of 30 percent before expiring at the end of 2028. To qualify, the biomass fuel property must operate at a thermal efficiency rate of at least 75 percent and be used to either heat space within the dwelling or heat water.
• Restore the existing residential renewable energy investment tax credit for residential wood heating systems (IRC section 25) to 30 percent, and extend it through 2028.

According to industry advocates, thermal biomass systems can reduce heating costs by 20 to 50 percent. Wood pellets, a common biomass fuel, cost roughly the equivalent of $2.00 per gallon of heating fuel. Additionally, nearly every cent of biomass heating investments is returned to the local economy whereas 80 percent of every heating oil dollar is sent out of the state. In New York State and New England, it has been estimated that for every 100,000 tons of pellets manufactured, 342 direct jobs are created. 

In addition to Senators King and Collins, the legislation is cosponsored by Senators Maggie Hassan (D-N.H.) and Jeanne Shaheen (D-N.H.).