BTEC, PFI thank Sen. King, Rep. Welch for commitment to BTU Act

By Biomass Thermal Energy Council, Pellet Fuels Institute | February 18, 2015

The Biomass Thermal Energy Council and the Pellet Fuels Institute have thanked Senator Angus King, I-Maine, and Rep. Peter Welch, D-Vt. for their commitment to renewable biomass energy and their bipartisan effort to ensure that biomass for heating and cooling systems is represented within the U.S. tax code.

King has announced plans to introduce the Biomass Thermal Utilization Act of 2015. Known as the BTU Act, the legislation will extend to biomass heating systems the tax credits that are currently available to all other renewable energy sources. Welch has announced similar plans for a House companion bill.

“Biomass thermal technologies for heating and cooling have never benefited from the investment tax credits in the federal tax code that other renewable energy technologies have enjoyed for many years,” said Jennifer Hedrick, executive director of PFI. “The members of PFI applaud Sen. King for his leadership and we look forward to working with Rep. Welch and his colleagues in the House to introduce a companion bill.”

”The BTU Act would enable home and business owners across the country to move from volatile and often more expensive fossil fuels to locally sourced renewable biomass fuels like wood chips, pellets, and agricultural residues,” Joseph Seymour, executive director of BTEC.  “The introduction of the BTU Act now sends a signal to the Congress that advanced biomass heating technologies should be considered in the context of broad energy and tax reform legislation.”

While renewable energy technologies like wind, solar, geothermal, and biomass power have received investment tax credits for numerous years, biomass thermal technologies have not received similar acknowledgment in the U.S. tax code.

The BTU Act specifically contains two major provisions that would correct the current oversight, crediting biomass heating systems in the tax code by:

- Including residential high-efficiency biomass thermal property in Section 25D of the tax code, with a 30 percent credit for equipment with an efficiency rating of at least 75percent;

- Promoting commercial and industrial biomass thermal investments through a tiered credit for 15 percent or 30 percent of the installed cost of biomass-fueled heating (or cooling) systems, with a 15 percent credit for systems 65-80 percent efficient, and a 30 percent credit for systems 80 percent efficient and above.

Both credits would have no cap and would be available for biomass thermal systems placed in service in 2015.  

An analysis from William Strauss of FutureMetrics predicts that the BTU Act could generate an increase of net tax revenue of over $40 million from increased local economic activity three years after the BTU Act’s passage.