WASHINGTON, D.C. – March 12, 2015 – (RealEstateRama) — Following an event last month at Mt. Abram Ski Resort in Greenwood to highlight the economic and environmental benefits of biomass, U.S. Senator Angus King (I-Maine) today fulfilled his pledge to reintroduce the Biomass Thermal Utilization Act of 2015, legislation that incentivizes the development of biomass as an affordable, clean, and home-grown source of energy.
“Biomass offers an efficient, inexpensive, and environmentally-friendly way for people to heat their homes and businesses, which is why it would only make sense to incentivize purchasing it like we do other low-cost types of energy,” Senator King said. “With this change, we could reduce our dependence on fossil fuels, lower energy costs, and support the local economy – a true hat-trick for Maine.”
Specifically, the bill would amend the federal tax code to incentivize biomass energy through tax credits for capital costs incurred in residential and commercial installations. Tax incentives already exist for other forms of renewable energy and this bill seeks to achieve parity between those renewable systems and thermal biomass systems.
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 residential renewable energy investment tax credit. 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
- Add open-loop biomass heating property to the list of existing technologies that qualify for the commercial renewable energy investment tax credit in the federal tax code. Qualifying biomass heating property must operate at thermal output efficiencies of at least 65 percent and be used to generate heat, hot water, steam, or industrial process heat. The credit would be two tiered: for technologies that operate at thermal output efficiencies between 65 and 80 percent, the investment tax credit is limited to 15 percent of installed capital cost. Technologies operating at thermal output efficiencies greater than 80 percent would be eligible for the full 30 percent investment tax credit.
By offering tax incentives, the legislation would encourage people and businesses to upgrade away from oil boilers to efficient wood-pellet boilers. Last month, Senator King toured Mt. Abram Ski Resort in Greenwood where, in addition to announcing his plans to reintroduce the BTU Act, he surveyed the ski area’s renewable energy upgrades, including two fully semi-automatic wood-pellet fired boilers. Together, the boilers, which were manufactured in Bethel, heat the ski area’s base lodge with wood pellets produced by a company in Strong.
According to industry advocates, thermal biomass systems reduce heating bills 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 manufactured.
Senators Susan Collins (R-Maine), Jeanne Shaheen (D-N.H.), and Jeff Merkley (D-Ore.) are all cosponsors of the BTU Act.