Sen. King introduces biomass heating bill

By Anna Simet | May 22, 2013

Sen. Angus King, I-Maine, has introduced a bill that would provide incentives to install residential, commercial and industrial biomass heating systems by modifying renewable energy provisions of the current tax code.

Altering Section 25 D of the Internal Revenue Code, the Biomass Thermal Utilization Act of (BTU Act) would provide a 30 percent investment tax credit to qualifying residential heating systems, as it already does to many other renewable energy technologies. To be eligible for the credit, systems must operate at a thermal efficiency rate of 70 percent, and be used to heat homes or water.

The bill also changes Section 48 to provide a tiered tax credit for the installed cost of biomass-fueled heating or cooling systems for commercial or industrial applications. According to the bill, 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. 

Both credits would have no maximum and be available for systems placed in service on or before December 31, 2016.

The bill is highly applicable to Sen. King’s home state, as several organizations and 36 schools in Maine operate on thermal biomass systems, according to his office. “When Mainers purchase wood pellets, they’re not only buying a home grown and home harvested product, but they’re also directly contributing to the creation of jobs and the economic health of our state,” King stated along with the release of the bill.

The BTU Act, which is being co-sponsored by Sen. Susan Collins, R-Maine, is being supported by the Biomass Thermal Energy Council, Maine Pellet Fuels Association and Pellet Fuels Institute.