Incentive Legislation and Programs

BTEC strongly supports tax legislation that promotes the installation of clean, high-efficiency biomass heating systems in residential, commercial, and industrial settings. Tax incentives have been introduced ranging from a $1,500 tax credit for residential heating systems, to a 30% Investment Tax Credit (ITC) for overall project costs of residential, commercial, and industrial biomass heating systems.

Past Legislation:

S. 727 (114th Congress) – Biomass Thermal Utilization Act of 2015 (BTU Act)

• The bill would provide a 30% tax credit for high efficiency residential biomass heating equipment and a two-tiered Investment Tax Credit of 15 or 30% depending on operating efficiencies for commercial and industrial biomass systems. Read more at govtrack 

H.R. 1145 (114th Congress) – Biomass Thermal Utilization Act of 2015 (BTU Act)

• The bill is the House companion measure to S. 727, and would provide a 30% tax credit for high efficiency residential biomass heating equipment and a two-tiered Investment Tax Credit of 15 or 30% depending on operating efficiencies for commercial and industrial biomass systems. Read more at govtrack 

Click here to view the Tax Credit archive 

BTEC supports the establishment of a production tax credit (PTC) for renewable thermal energy. A similar credit already exists for the production of renewable electricity (Internal Revenue Code, Title 26, Section 45). A renewable thermal energy PTC could be implemented through a modification of the existing Section 45 credits or the development of a new section in the tax code.

Active Legislation: none noted

BTEC supports the development of combined heat and power (CHP) and district energy facilities that incorporate high-efficiency, biomass-fired heating systems.  BTEC supports a federal energy policy that enables electric utilities to meet a portion of their renewable or clean energy requirements through energy efficiency improvements such as the use of these biomass-fired CHP systems.

Past Legislation:

The Local Energy Supply and Resiliency Act (LESRA) of 2015.

• Technical Assistance Program: The bill establishes a grant program to provide technical assistance for identifying, evaluating, planning and designing distributed energy systems. This program helps for-profit and nonprofit entities identify opportunities, assess feasibility, overcome barriers to project implementation, conduct financial assessments, and perform the required engineering. Authorized appropriations: $250 million over 5 years.
• Loan Program: The bill establishes a loan program, which will help states, tribes, utilities, and universities deploy projects that recover or produce useful thermal energy from waste heat or renewable thermal energy sources, generate electricity locally, distribute electricity in microgrids, distribute thermal energy, or transfer thermal energy to building heating and cooling systems. These investments will strengthen the reliability of the local energy supplies and boost resiliency of energy infrastructure, as well as reduce greenhouse gas emissions and maximize job creation. Read more

S. 1205 (113th Congress) – LOCAL ENERGY SUPPLY AND RESILIENCY ACT OF 2013 (LESRA)

• Would fund a Technical Assistance Program for the evaluation of district energy, renewable thermal, and waste heat facilities. It would also fund a revolving loan guarantee program for qualifying energy infrastructure. Biomass thermal fuels and technologies would qualify. Read more at govtrack

H.R. 4916 – POWER (Power, Efficiency, and Resiliency) Act of 2014

• The bill would increase the Investment Tax Credit (ITC) for qualifying combined heat and power (CHP) systems from 10% to 30% and include a 30% ITC for waste heat to power (WHP) technologies. The bill would also increase the cap on eligible MWs from 15 to 25. Biomass-fueled CHP is eligible. Read more at govtrack

BTEC supports the federal recognition and establishment of renewable energy credits (RECs) from renewable thermal energy. Thermal RECs would incentivize the production of biomass thermal energy and other renewable, carbon-neutral sources of heat. Thermal RECs could also be incorporated into federal energy policy frameworks designed to increase generation of renewable and/or clean energy. Several states, including New Hampshire and Massachusetts, have taken steps to include thermal RECs in their energy mandates, while numerous others are evaluating their inclusion.

Active Legislation: none noted

The Federal Agriculture Reform and Risk Management Act of 2013 (better known as the Farm Bill) provides for the reform and continuation of agricultural and other programs of the U.S. Department of Agriculture through fiscal year 2018.  A majority of the law’s funding is allocated to nutritional programs; however the law also provides mandatory and to-be-appropriated funding for a variety of energy programs including advanced biofuels production, biomass research, and the deployment of renewable energy technologies like biomass thermal in rural and agricultural settings.

Sec. 9002 Biobased Markets

• Funding – Authorizes $2 million to be appropriated annually for FY2014 – FY2018.  Authorizes mandatory funding of $3 million annually for FY2014 – FY2018, and it authorizes $2 million to be appropriated annually for FY2014 – FY2018.

Sec. 9004 Repowering Assistance Program

• Funding – Authorizes mandatory funding of $12 million for fiscal year 2014, and additional funding of $10 million for each of fiscal years 2014 through 2018.
• Important Program Details
  • Provides payments to bio-refineries to switch from fossil fuels to renewable biomass to produce heat and power.

Sec. 9005 Bioenergy Program for Advanced Biofuels

• Funding – Authorizes $20 million to be appropriated annually for FY2014 – FY2018. Provides mandatory funding of $15 million for each of fiscal years 2014 through 2018.
• Important Program Details
  • Biomass fuels like pellets qualify.

Sec. 9007 Rural Energy for America Program

• Funding – Mandatory funding of $50 million is provided for fiscal year 2014 and each fiscal year thereafter. Authorizes to be appropriated $20 million annually for FY2014 – FY2018.
• Important Program Details
  • Creates a three-tiered application process for loan guarantees and grants.
  • Repeals the use of REAP funds for feasibility studies.

Sec. 9008 Biomass Research and Development

• Provides mandatory funding of $3 million for each of fiscal years 2014 through 2017, and discretionary funding of $20 million for each of fiscal years 2014 through 2018.

Sec. 9010 Biomass Crop Assistance Program

• Funding – Provides mandatory funding of $25 million for each of fiscal years 2014 through 2018.
• Important Program Details
  • CHST matching payments may not exceed $20 per dry ton and available for a period of two years.
  • Not less than 10% or more than 50% of funding may be used for CHST.
  • Provides that funding under the subsection shall be available for technical assistance.
  • Rewrites Sec. 9011 of Farm Security and Rural Investment Act of 2002 – changes enrolled land eligibility; includes residue from crops receiving Title I payments as eligible material, but extends exclusion to any whole grain from a Title I crop, as well as bagasse and algae.
  • One-time establishment payments are limited to no more than 50% of cost of establishment, not to exceed $500 per acre ($750/acre for socially disadvantaged farmers or ranchers).
  • Not later than four years after enactment, USDA shall submit a report on best practice data and information gathered from participants.

Sec. 9012 Community Wood Energy Program

• Funding – Authorizes to be appropriated $5 million annually for FY2014 – FY2018. BTEC supports federal funding of the Community Wood Energy Program (CWEP) at the fully authorized level of $5 million/yr.
• Important Program Details
  • Authorizes grants of up to $50,000 to be made to establish or expand biomass consumer cooperatives that will provide consumers with services or discounts relating to the purchase of biomass heating systems or products (including their delivery and storage

More information:

• 2014 Farm Bill Energy Title Legislation Fact Sheet

Past Tax Credit Legislation (2008 – 2012)

S. 3352 (112th Congress) – Expanding Industrial Energy and Water Efficiency Incentives Act of 2012

• The bill would create a two-tiered Investment Tax Credit of 15 or 30% depending on operating efficiencies for commercial and industrial biomass systems. Read more at govtrack

S. 1000 (112th Congress) – Energy Savings and Industrial Competitiveness Act of 2011

• The bill would provide a suite of industrial energy efficiency tax incentives and revise federal energy purchase mandates to include thermal energy from biomass. Read more at govtrack

H.R. 4230 (112th Congress) – HOMES Act of 2012

• Would provide tax credits of up to $8,000 for whole home energy efficiency improvements, including eligible biomass thermal appliances. Read more at govtrack

S. 1294 (112th Congress) – Oil Independence for a Stronger America Act of 2011

• Would establish a renewable biomass thermal energy loan program for non-federal, commercial and multi-family residential buildings. Read more at govtrack

S. 1914 (112th Congress) – Cut Energy Bills at Home Act

• Would amend the existing Internal Revenue Code Section 25 tax credit to provide a credit ($5,000 maximum) for performance based residential energy improvements. Read more at govtrack

H.R. 5918 (111th Congress)- Help Businesses Save Money by Switching to Clean, Affordable Energy Act

• Would establish a 30% Investment Tax Credit for commercial and industrial biomass heating appliances. Read more at govtrack

S. 1643 (111th Congress) – Cleaner, Secure, and Affordable Thermal Energy Act

• Would establish a new credit for 30% of the installed cost ($4,000 maximum) for home heating conversions from fuel oil to a biomass heating system. Read more at govtrack

S. 3188 (111th Congress)– American Renewable Biomass Heating Act of 2010

• Would establish a 30% Investment Tax Credit for commercial and industrial biomass heating appliances. Read more at govtrack

H.R. 2080 (111th Congress) – American Renewable Biomass Heating Act

• Would extend the existing Internal Revenue Code Section 25 tax credit for residential biomass heating systems from $1,500 to $6,000. Read more at govtrack