White paper highlights economic benefits of biomass thermal bill
A recent white paper published by FutureMetrics investigates the positive economic impacts of the Biomass Thermal Utilization Act of 2013, which was introduced in the U.S. House of Representatives in May. The report was prepared by William Strauss, chief economist of the Biomass Thermal Energy Council.
The legislation, S. 1007, was introduced by Sen. Angus King, I-Maine, on May 22 and referred to the Committee on Finance. To date, Sens. Susan Collins, R-Maine, and Jeanne Shaheen, D-N.H., have signed on to co-sponsor the measure.
The bill aims to provide incentives to install residential, commercial and industrial biomass heating systems by altering Section 25 D of the Internal Revenue Code to provide a 30 percent investment tax credit to qualifying residential heating systems. To be eligible for the credit, systems must operate at a thermal efficiency rate of 70 percent, and be used to heat homes or water.
The bill would also alter Section 48 to provide a tiered tax credit for the installed cost of biomass-fueled heating or cooling systems for commercial or industrial applications. Qualified biomass heating property would be required to operate at thermal output efficiencies of at least 65 percent and could be used to generate heat, hot water, steam or industrial process heat. The first tier would apply to technologies that operate at thermal output efficiencies between 65 and 80 percent, and the investment tax credit would be limited to 15 percent of installed capital cost. The second tier would apply to technologies operating at thermal output efficiencies greater than 80 percent, which would be eligible for the full 30 percent.
According to the white paper, the substitution of biomass fuels for heating oil and propane systems will have a “dramatic positive effect on the economies of thermal energy dependent states.” The report notes that when used in modern high-efficiency boilers, biomass fuels can lower the cost of heat by 40 percent to 60 percent compared to heating oil.
In the report, Strauss notes the positive impacts of biomass conversion come from four primary sources. First, he said that money that would have been spent on heating oil or propane stays in the region. Second, heating bills for homes, businesses and manufacturers are dramatically reduced, leading to additional disposable income spent within local economics. Third, the supply chain for biomass creates new jobs for loggers, truckers, and biomass fuel manufacturers. Finally, the sales and installation of heating systems also support and generates jobs, leading to sales tax revenues and income tax revenues.
A full copy of the white paper can be downloaded from the FutureMetrics website.