Tuesday, December 16, 2014

Wood and Pellet Stove Tax Credit to be Extended through Dec. 31, 2014

Stove manufacturers routinely claim
75% efficiency to be eligible for the
tax credit, even when stoves are far
below 75%.  The average wood and
pellet stove may be around 70%.
Updated on December 16, 2014 - Extension of the $300 federal tax credit to purchase a new wood or pellet stove was approved by the Senate tonight and had been approved by the House last week.  President Obama is expected to sign it shortly.

The legislation extends a host of tax provision through Dec. 31 2014, making it almost entirely a retroactive tax credit.   A two-year deal for the tax credit fell through.




The tax credit, which started out at $1,500 applied to all stoves that were at least 75% efficient.  The stove industry used a loophole to help ensure that all EPA certified wood stoves and all pellet stoves could claim to be 75% efficient.  As a result, many consumers are unwittingly buying stoves that may be less than 60% efficient, or even less than 50% efficient.  Pellet stoves in particular can be very low efficiency, saddling consumers with unnecessarily high pellet fuel bills.

Because of this loophole, the stove tax credit has long been criticized in the energy efficiency community as being dominated by “free riders” because the credit applies to virtually every stove and does not push consumers toward the most efficient ones. Instead of giving consumers an incentive to buy higher efficiency or “greener” appliances, like Energy Star appliances that help people save money, the government has been giving a discount to all wood and pellet stoves (other than uncertified, exempt wood stoves.) 

Of the hundreds of stove models on the market, manufacturers have only disclosed actual, third party verified efficiencies for about 20 models and they are listed here. Blaze King is the only stove manufacturer who discloses actual efficiencies for all their models.  To date, all the major pellet stove manufacturers have refused to disclose any actual efficiencies.  Seraph Industries, a very small pellet stove maker, has disclosed their efficiencies and they are quite high.

The EPA, nor any other federal or state agency involved in wood and pellet stove education, warns consumers that they are not necessarily buying a 75% efficient stove, as promised by manufacturers who issue certificates assuring consumers that their stoves are eligible for the tax credit.

The Alliance for Green Heat has been a long-time advocate of a robust tax credit, but only for stoves that are genuinely cleaner and more efficient.  The federal tax credit has never incorporated particulate emissions into its eligibility requirements.

Consumers who bought a stove in 2014 can claim the credit on their 2014 taxes, assuming they have not exceeded the $500 limit for residential energy improvements.  


In addition to the federal tax credit, more states are beginning to offer incentives, including Idaho, Oregon, Maryland, Montana and New York.