It’s Official: Wood Heat Tax Credit for Homeowners Passed by Congress

Recently, parts of The BTU Act (Biomass Thermal Utilization Act) were passed through Congress and signed into law, officially placing wood pellet stoves on a level playing field with other renewables that have been receiving appliance tax credits for a long time.

What does this mean for residential wood pellet heating?

A three-year investment tax credit (ITC) for high-efficiency wood-fired home heating equipment is now official!

The credit applies to the installed cost of home heating and hot water systems that utilize wood pellets, chips and cordwood at efficiencies greater than 75 percent high heat value.

The tax credit is for 26 percent in 2021 and phases down to 22 percent in 2022 and 2023.

For example, a wood pellet stove that costs $4,000 to install in 2021 will result in a savings of approximately $1,000 when applied to the homeownerā€™s 2021 tax return.

Charlie Niebling, a consultant for wood pellet producer Lignetics, has been working to enact the BTU Act for more than a decade. He has called the tax credit plan a ā€œgame changerā€ for residential wood heating.

“Our message to Congress for years has been…don’t pick winners and losers,ā€ explained Niebling. ā€œ[Wood heat] deserves the same recognition in the federal tax code that solar and wind do.”

If you’d like details about this bill passing, read moreĀ here.

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