Renewable Energy Incentives
Tax Credits & Rebates
Renewable energy is increasingly encouraged with benefits for the planet, individuals, businesses, and economies, but switching to renewables can be daunting due to initial costs. Federal, state, and local incentives encourage renewable energy adoption to reduce dependence on dirty fossil fuels, increase local economic health and help citizens save money.
What Are Renewable Energy Incentives?
With the promising future of renewable energy, federal, state, and local governments have invested in renewable sources through tax credits, rebates, grants, loans, and tax holidays. For qualifying installations, incentives can help offset the costs of installation and encourage more people to implement these eco-friendly solutions.
Qualifying projects and tech, for example, include:
- Heat pumps
- Small wind turbines
- Biomass fuel heaters
- Solar energy systems
- Electric Vehicles
- Efficiency measures such as Energy Star appliances, LED bulbs, and more efficient motors of various types.
State Rebate Programs
State programs are generally geared toward meeting greenhouse gas emissions targets. Additional benefits from using renewables, such as reducing peak power demands or retaining local wealth are also considered. Here in the Northeast, for instance, we are heavily dependent on heating oil imported from other countries. By purchasing wood fuel instead of fossil fuels, billions of dollars can be kept in our region to re-circulate and improve living standards.
Many governments encourage the use of renewable wood heat as a means for achieving renewable energy goals. In our home state of New Hampshire, one goal established by Governor Lynch in 2006 is to achieve 25% use of renewable energy by 2025. Biomass is a key component of the solution, allowing us to switch that heavy demand for heating oil over to domestically sourced wood. Vermont wants to transition to 90% renewable energy by 2050.
We try to stay abreast of all renewable energy incentives. Below are some notable government biomass incentives, but you can always check with your state's energy department to find programs in your state.
• A rebate payment of 40% of the system and installation cost, up to a maximum of $10,000.
• Minimum three ton capacity for pellet fuel storage.
• Must be a resident of New Hampshire and their primary residence.
• A rebate payment of 40% of the system and installation cost, up to a maximum of $65,000.
• Minimum three ton capacity for pellet fuel storage.
• An additional rebate payment of 30% for the installation of a thermal storage tank, up to a maximum of $5,000.
There is a tax holiday on all pellet boilers and installation equipment.
Rebate Program (Efficiency Vermont and Vermont Renewable Energy Resource Center)
Efficiency Vermont offers:
• For pellet boilers - $3,000 cash back after purchase plus a $3,000 CEDF Grant.
• Rebates are for new, high-efficiency wood pellet boilers and furnaces that are installed as primary central heating systems.
• Replacement of natural gas-fired heating systems is not eligible.
• Systems must be classified as indoor systems and installed inside.
• Systems must be wood pellet only.
• Systems must have at least one-week fuel-storage and automated on/off and fuel feed.
Commercial buildings over 5000 sq. ft. may be eligible for funding of up to $1.25 per sq. ft. Please contact Renewable Energy Vermont for more details.
The Vermont Renewable Energy Resource Center include:
• $3,000 per installed pellet boiler.
• Fuel storage capacity such that the system may continuously operate for a period of at least 14 days under peak load conditions.
• Automated fuel feed from a bulk storage container/area to the burn chamber in an integrated path.
• Automated on/off fuel feed control based on a demand for heat.
• Bulk fuel storage container systems must be able to receive automated bulk delivery of pellets.
• Customers are eligible for a $500 Pellet Storage Upgrade Adder for pellet storage systems that have at least 20 days of storage under peak load conditions.
• Residential and commercial installations qualify.
Efficiency Maine incentives include
- 33% up to $6,000 towards equipment and installation.
- Eligible 1 to 4 unit residential buildings serving as a principal residence for occupants, new or retrofit.
- The system must include a bulk fill system that would provide continuous heat without human intervention for 2 weeks (estimated at 1 ton • pellet capacity) or has a minimum 500-pound capacity fill the bin and a permanently installed backup heating system (propane, oil, natural gas) that automatically switches fuel sources and provides continuous central heat to the home using the same thermostatic control and heating distribution system as the pellet boiler if the biomass heating system runs out of pellets.
Federal Tax Credit
Explore these further on the U.S. Department of Energy's website.
As of December 2020, installations of wood-fueled boilers and stoves for home heating with an efficiency of 75% or better qualify for a 26% federal tax credit. Beyond 2022, this wood boiler tax credit will be 22%. At this time, the government boiler incentive will not go beyond 2023, so if you're considering switching, now's the time to do it while you can get a tax rebate for pellet stoves and wood boilers.
The tax credit should equate to federal tax savings of around $5,000 per installation and is processed through the homeowner's IRS tax return. The tax credit can be applied to the entire cost of the boiler installation including buffer tanks. Tax credits only apply to completed system installations taking place within the tax year and are not retroactive.
The Investment Tax Credit or ITC, which has been available for other renewable energy installations for years, was finally granted for efficient wood heating after almost a decade of effort by the wood heating industry. Please visit this link for more history on the federal tax credit.
Many people have wanted to switch to renewable home heating, but higher installation costs have been a deterrent to pellet boiler purchases compared to gas and oil heating systems. Between the tax credit and rebates, savings can reach $16,000, making pellet boiler installation costs very competitive with installation costs for oil or gas boilers.
What Tarm Biomass Products Qualify for Incentives?
All Tarm Biomass Fröling PE1 wood pellet boiler installations qualify for the 22% federal tax credit, as well as many of our other products. Some states require boilers to have a certain efficiency level, such as New Hampshire's 80%, while others accept from a list of approved products, like those certified by the Environmental Protection Agency (EPA). Here are some of the efficiency ratings for Tarm Biomass products:
- Fröling PE1: 78%
- Fröling P4: 85%
- Fröling S3 Turbo 50: 80.35%
Read your state's incentive requirements to learn which qualifications you'll need to meet. Our product pages contain more detailed information, and you can always contact us to discuss qualifying products.
Please consult a tax accountant before making any final decisions. We at Tarm Biomass will provide the required certificates of efficiency and stand ready to answer any questions about pellet boiler installation options.
Start Burning Wood Today!
Renewable heating with wood sources has a lot of advantages. Government incentives address one of the largest barriers to installation: cost. Convert to renewable energy, save money and help the planet with high-efficiency products from Tarm Biomass.
If you have any questions about installing wood boilers, finding a qualifying product or placing an order, please reach out to our customer service representatives today!