05.21.15

U.S. Senator Tammy Baldwin Announces Support for Biomass Thermal Utilization Act

Bipartisan legislation will provide tax incentives to those who upgrade to clean, affordable biomass wood-pellet boilers

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin today announced her support for the bipartisan Biomass Thermal Utilization (BTU) Act which is led by Senator Angus King (I-ME) and would provide tax incentives to upgrade to clean, affordable biomass wood-pellet boilers. Under current law, thermal biomass systems do not qualify for investment tax credits for capital costs incurred in residential and commercial installations, unlike a host of other renewable energy technologies. The BTU Act would achieve parity between biomass systems and those other renewable systems in the U.S. tax code and encourage people to upgrade to more efficient wood-pellet boilers.

“Thermal biomass energy is a responsible and environmentally-friendly source of energy that can save money and help create jobs,” said Senator Baldwin. “I’m proud to join this bipartisan effort to ensure biomass energy systems, like wood pellet boilers, receive the same treatment as other sustainable energy technologies under our tax code.  This is a win for consumers, and it will help grow markets for Grown in Wisconsin sustainable wood products.”

“We appreciate senators like Tammy Baldwin that understand the importance of bipartisan support for parity among renewable energy sources. Incentivizing renewable energy is needed, but should be done fairly.  Biomass heat creates long-term jobs in rural economies and the BTU Act will be an important step in that direction.  We hope that both the House and the Senate see the value in this step toward environmentally friendly and economically beneficial renewable energy,” said Tony “T.J.” Morice, Marth Companies Vice President of Marketing, Operations and Business Development. Marth Companies is a leader in the wood pellet manufacturing industry and is located in Marathon, Wisconsin. 

The BTU Act would amend the federal tax code to incentivize biomass energy, as it already does for several other forms of renewable energy, by adding biomass fuel property to the list of existing technologies that qualify for the residential renewable energy investment tax credit. Currently, a host of renewable energy technologies qualify for investment tax credits for capital costs incurred in residential and commercial installations. This legislation seeks to achieve parity between those renewable systems and thermal biomass systems.

According to industry advocates, thermal biomass systems substantially reduce heating bills during the winter months. Additionally, biomass heating investments help provide additional sources of revenue to Wisconsin’s agricultural and forest communities.

Specifically the BTU Act would:

  • Underscore that heat from biomass is an underutilized energy source in the United States.
  • Add biomass fuel property to the list of existing technologies that qualify for the residential renewable energy investment tax credit. To qualify, the biomass fuel property 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.
  • 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. The credit would be two tiered: for technologies that operate at thermal output efficiencies between 65 and 80 percent, the investment tax credit is limited to 15 percent of installed capital cost. Technologies operating at thermal output efficiencies greater than 80 percent would be eligible for the full 30 percent investment tax credit.