How the BTU Act Will Change the Industry

By Joseph Seymour | July 22, 2013

The BioLite CampStove has captured the imagination of the outdoor community, and for good reason.  The small, compact camp stove (the size of a Nalgene water bottle) produces heat for cooking and power for charging USB-connected devices. Separately, the stove’s components are not groundbreaking: a combustion chamber, circulatory fan and thermocouple. Their integration and functionality, however, are changing the camping culture from packing up propane fuel and packing out empty canisters, to one that uses local fuels and also keeps one’s iPhone charged. Numerous testimonials praise the device’s convenience, though, oddly, many of those same stories express pleasant surprise that a wood-heating device could actually deliver on performance promises. A constant barrier to its broader use is the  pervasive belief that using biomass (wood) for heating is primitive. But thanks to Sens. Angus King, I-Maine, Susan Collins, R-Maine, and Jeanne Shaheen, D-N.H., we have a solution.

On May 22, King and Collins introduced S. 1007, the Biomass Thermal Utilization Act, or BTU Act for short. Weeks later, Shaheen joined the bill, giving the measure increased legitimatecy and a tri-partisan appeal. Specifically, the BTU Act would recognize biomass thermal technologies within the renewable energy provisions of the federal tax code, correcting years of inequity among the renewables. One provision of the BTU Act would include high-efficiency biomass heating technology in Section 25D of the Internal Revenue Code, the residential renewable energy 30 percent investment tax credit. The second provision is a tiered tax credit for 15 or 30 percent of the installed cost of biomass-fueled heating (or cooling) systems for commercial or industrial applications in Section 48 of the tax code.  Together, these measures would—pardon the cliché—level the playing field for highly efficient and advanced biomass thermal technologies.

Since that muggy spring Wednesday, I have made connecting with state and regional advocates and potential champions a priority. My members, the Pellet Fuels Institute, and others under the broad biomass tent, are telling their colleagues and Congress the story that the BTU Act could write, and it is a compelling one at that. According to an analysis from William Strauss of FutureMetrics consultancy, the BTU Act would actually generate substantial income for the federal Treasury on top of reducing household and business energy bills. How, you ask, could a tax credit benefit both groups?  The answer is no secret to millions of homeowners and hundreds of businesses utilizing locally sourced, renewable, and affordable biomass fuel. After accounting for fuel savings from switching from oil, the benefit of locally sourced fuels and its supporting supply chain, and also the savings circulating through one’s community, the Treasury could anticipate $40 million-plus in new revenue three years after its enactment. And that would be in addition to the more important benefits of several thousand new jobs, healthier forests, stronger rural communities, and an improved climate.

If the BTU Act were a baseball team, its list of win-win-win qualities would put it in clear contention for the playoffs. But we are nowhere near October, figuratively or otherwise.  Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member  Orrin Hatch, R-Utah, have, as the Washington newspaper The Hill described, “adopted a blank slate approach that requires all their colleagues to make the case for their favorite tax breaks” as part of the Senate’s focus on tax reform. The deadline for comments was July 26, and it will be a measure of our industry’s passion to see if, finally, biomass thermal tax policy is included.  An omission would come quite close to literally leaving money on the table.

Positive testimonials sell more effectively than any form of marketing. Today’s advanced biomass thermal and combined-heat-and-power technologies are making believers in places like Berlin, N.H., Kennebec, Maine, and Deschutes County, Ore. The BTU Act would accelerate that market transformation nationally, bringing high-efficiency systems into the mainstream with a capital M. Consistent performance will yield additional sales and a growing market, countering the perception of biomass thermal as outdated or dirty.  I have faith that this industry can respond to that pent-up market demand. If only I had as much faith in our legislators. But that, again, is what we are here for.

Author: Joseph Seymour
Executive Director, Biomass Thermal Energy Council