The Biomass Thermal Utilization Act

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What is the BTU Act?

“Whelen Froling Boilers” is a 4 boiler installation of Froling dry chip boilers installed by Froling Energy at Whelen Engineering in Charlestown NH.

The BTU Act of 2021 seeks to recognize and promote the many economic and environmental benefits that biomass thermal energy provides by extending the existing Section 25d investment tax credit for residential biomass heating systems and opening the door to Section 48 of the Internal Revenue Code to incentivize biomass thermal (business). Currently, a host of renewable energy technologies qualify for investment tax credits for capital costs incurred in residential and commercial installations. Simply, this legislation seeks to achieve parity between biomass thermal and other renewable systems.

Why is the BTU Act important?

“PJ Noyes bldg. silo” is a containerized pellet boiler installed by Froling Energy at PJ Noyes in Lancaster NH.

The BTU Act adds high-efficiency biomass thermal technologies to the list of renewable energy technologies that currently benefit from investment tax credits under section 25D (residential) and Section 48 (business) of the tax code.

This investment credit currently applies to biomass thermal (residential), solar thermal and geothermal technologies, but not to biomass thermal (business). The BTU Act corrects this oversight. The BTU Act only qualifies the most efficient and advanced technologies for the credit.

Investment credits are needed for advanced biomass thermal technologies because of their comparatively high upfront capital cost. This “capital hurdle” must be overcome to build the market and gain economies of scale that will bring system costs down. Furthermore, through the BTU Act, biomass heating systems (business) will benefit from accelerated depreciation, improving the economics of the projects.

Similar policy has been very effective in reducing the cost of solar (PV and thermal) and geothermal technologies.

The BTU Act Resource Center

BTU Act Fact Sheet >> Read the Bill >>
HPBA Wood and Pellet Heater Investment Tax Credit one-pager >> PFI Income Tax Credit Frequently Asked Questions >>

How can you help pass the BTU Act?

EMD Millipore Ribbon Cutting is 6 MW chip steam boiler built by AFS Energy and installed at Millipore Sigma’s plant in Jaffrey NH.

The Coalition leads efforts to gain support among representatives and senators in the House and Senate. To gain support, coalition members will be asked to contact the representatives and senators in which their organization has facilities and operations that benefit from the passage of the BTU Act. BTEC send periodic updates and prompts action for Coalition members to take.

Join the BTU Act Coalition by contacting Peter Thompson (peter.thompson@biomassthermal.org) or 202-596-3974 x302

About the Biomass Thermal Energy

“Froling Energy Dry Chip Truck Delivery”

A thermal biomass system is a stove, furnace or boiler that runs on plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues, plants (including aquatic plants), grasses, residues, and fibers. The system produces thermal energy for heating residential and commercial, as well as process heat for industrial applications.

Wood pellets, chips and cordwood are the most common fuels for biomass heating systems, although agricultural wastes will see growth in the future. Wood pellets are generally made from wood waste, compressed under heat and pressure, with no additives. They have high energy density, low moisture content, and are as easy to transport and use as traditional fossil fuels. Wood chips offer a slightly less refined form of biomass fuel.

Advanced combustion technologies allow the use of biomass fuels with very high efficiencies and low emissions. Leading technologies have been developed in Europe, and are now entering the U.S. market. Domestic U.S. manufacturers are also developing advanced technologies.

BTEC Sustaining Members