In the United States (US), 140 organisations and members of the BTU Act Coalition have submitted letters to the Senate Finance Committee and to the House Ways and Means Committee urging the inclusion of the Biomass Thermal Utilization Act of 2019 (BTU Act – HR.1479, S.628) as the committees address potential extensions of renewable energy tax incentives. The Act provides a two-tiered investment tax credit to biomass thermal systems for commercial, industrial and residential applications.
The Biomass Thermal Energy Council (BTEC) and the 140 members of the BTU Act Coalition submitted letters to the House Ways and Means Committee and the Senate Finance Committee Energy Working Group, urging inclusion of the Biomass Thermal Utilization Act of 2019 (“BTU Act” – HR.1479, S.628) as the committees address potential extensions of renewable energy tax incentives.
The BTU Act Coalition members represent a broad cross-section of stakeholders, including rural economic development interests, clean energy advocates, forest conservation interests, and manufacturers of advanced, high-efficiency biomass heating technology and fuels from across America.
Investment tax credits have expanded the deployment of numerous renewable energy technologies since 2005. It is time to extend this market-making tax policy to thermal energy from renewable biomass. Thermal energy represents about one-third of energy consumption in America and the tax code has long recognized solar thermal and geothermal. We only seek similar recognition, said Jeff Serfass, BTEC Executive Director.
BTU Act extends high-efficiency renewables to include wood
The BTU Act extends to high efficiency, clean wood heating systems the investment tax credits that currently exist for every other renewable energy technology. Specifically, the BTU Act provides for a 30 percent investment credit against installed capital cost for residential biomass heating installations (section 25D of the internal revenue code), and a 15 percent or 30 percent credit against installed capital cost for business installations, depending on level of efficiency met by the system (IRC section 48).
Forests are facing increasing threats from insects, disease, wildfires, development pressures, and rapidly shifting markets. Private and public forests need new markets, especially for low-grade wood. Community-scale heating, combined heat and power (CHP), and district heating (DH) projects will help build strong local markets in support of responsible stewardship of these lands.
Absent new market innovation, these forest health issues put at risk the many benefits that Americans receive from the nation’s forests. Harnessing the potential of biomass thermal energy can increase rural economic development, job creation, and energy savings.
When other heating fuels hit record highs in recent winters, modern wood heating systems provided cost savings of nearly 50 percent through utilizing fuels that come from productive forests.
The main hurdle that is precluding homeowners and businesses from converting to biomass thermal systems is the upfront capital costs of conversion. By granting a modest investment tax credit, Congress can break down that barrier and kickstart the market uptake of advanced wood heating technologies.