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The IRS Biomass Tax Credit: Which Stoves Qualify?


Q: I understand that the IRS tax credit applies to biomass stoves achieving an efficiency rating of 75% or better. But I see wood stoves with lower efficiency ratings on their EPA hang tags being advertised as eligible for the tax credit. Are those manufacturers trying to put one over, or what?

Pat Hinds

Sweepy  The answer has roots dating back to the late 1980's when emissions regulations were in their infancy.  At that time, the EPA decided, for some reason, to put an average efficiency number on the emissions label of every biomass burner they tested.  Back then, the presumed average efficiency was 63% for non-catalytic wood stoves, and 72% for catalytic stoves.  Those are the numbers the EPA chose to put on their labels, regardless of what efficiency rating a given model might have scored in actual laboratory testing.

Well, the IRS is not the EPA.  To qualify for an IRS tax credit, manufacturers are required to have each model tested for efficiency, and achieve a score of 75% or better.  This testing produces efficiency numbers far more accurate than the boilerplate averages on the EPA hang tags, but there's a loophole: there are several ways to compute the efficiency of a wood stove, some of which return higher numbers than others, and the IRS doesn't specify which protocol manufacturers are required to use.  As a result, nearly every manufacturer of wood and pellet stoves in the US marketplace can produce efficiency test results that qualify for the tax credit.

This has created a good news / bad news situation for consumers: the good news is, they can be virtually assured that whichever biomass heater they select will qualify for the tax credit; the bad news is, they can't count on the accuracy of anybody's published efficiency ratings.

But that's about to change.   The EPA's Phase III Performance Standard for Residential Wood Heaters, passed in February, 2015, requires all manufacturers to submit their models to an EPA accredited test laboratory for efficiency testing using the same protocol, and submit the results by 2020, to be printed on the EPA's website and hang tags in place of the old averages.   The manufacturers will also be required to publish the same ratings on their websites and promotional materials, so the consumer will finally have a reliable way to compare various wood stove models based upon efficiency.  In the meantime, the EPA is publishing the new efficiency test results as they come in.  Check out the Actual Measured Efficiency column on the EPA's List of Certified Stoves.


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