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BTU Act reintroduced, biomass thermal, power could benefit

July.05 Power Plant Biomass

Several legislators have again introduced an act that would level the playing field for biomass heating technologies—and potentially, some biomass power facilities.

The Biomass Thermal Utilization Act of 2017 has been introduced to the House by Sens Angus King, I-Maine, Susan Collins, R-Maine, Rep. Peter Welch, D-Vermont, and Mike Kelly, R-Pennsylvania.

First introduced in 2013, 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 that already exist for other forms of renewable energy.

According to a fact sheet released by Sen. King’s office, the bill would add biomass fuel property to the list of existing technologies that qualify for the residential renewable energy investment tax credit (to qualify, the system 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), and 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).

“We’re extremely grateful to Senator King and other leaders in the Senate who have brought the BTU Act forward this year,” said Jeff Serfass, executive director of the Biomass Thermal Energy Council. “It is time high efficiency, advanced wood heating technology was accorded the same investment tax treatment that exists for every other renewable energy technology. We hope that the current attention on comprehensive tax reform will open up an opportunity for serious consideration of this modest, but regionally very important renewable energy incentive.  Ultimately homeowners and businesses with high heating costs will be the beneficiaries, coupled with creation of new markets for sustainably harvested wood resources.”

“Automated wood heating systems are an economical and environmental win for rural forested states like Maine, New Hampshire, Vermont, and northern New York,” said Rob Riley, president of the Northern Forest Center. “Switching from fossil heating fuels keeps heating dollars local, lowers carbon emissions, and provides markets for sustainably harvested wood from the region’s forests. The BTU Act will help accelerate adoption of this technology, and we are grateful to Senator King and his colleagues for introducing this important legislation.”

The bill could also provide opportunity for the biomass power industry. The Biomass Power Association lauded the bill, as it would enable biomass power facilities to qualify for a Section 48 tax credit when making upgrades that would enable the facility to sell steam heat to nearby businesses.

“We thank Sens. King and Collins for introducing the BTU Act, and for all he has done for the biomass industry, said BPA president Bob Cleaves. “In addition to power supplied on the grid, biomass facilities generate an additional product that they could monetize—that is steam heat. It is often prohibitively expensive to make the necessary upgrades that would enable the sale of heat to local businesses and organizations, but the BTU Act would help our members make that investment. This is especially critical when power prices are low and biomass power facilities are looking for additional revenue streams.”

Cleaves added that enabling businesses to purchase inexpensive steam heat from a biomass facility, particularly in a climate that is cold like Maine, will help bring costs down and encourage economic growth in communities that need it.