Letter urges Congress to make BTU Act part of tax extenders bill

The Biomass Thermal Energy Council and 140 members of the BTU Act Coalition are urging members of the U.S. Senate and House of Representatives to include the Biomass Thermal Utilization Act of 2019 as they address tax extenders legislation.

The BTU Act aims to amend the federal tax code to incentivize the use of energy efficient wood boilers, stoves and heaters through tax credits for capital costs incurred in residential and commercial installations. The bill provides for a 30 percent investment tax credit against installed capital cost for residential biomass heating installations and a 15 percent or 30 percent credit against installed capital cost for business installations, depending on the level of efficiency met by the system. The legislation was reintroduced in the House and Senate on Feb. 28. 

The BTEC and BTU Act Coalition sent letters to the House Ways and Means Committee and the Senate Finance Committee June 13. With the letter, the BTEC and BTU Act Coalition note similar legislation to the BTU Act of 2019 has been introduced during every session of Congress since 2009.

According to the letter, the bill would help strengthen American energy independence, address forest health and fuel hazard crises through the creation of new markets for low grade wood, lower greenhouse gas (GHG) emission, create jobs, and stimulate local economic development across America.

“Many federal renewable energy investment tax credits were extended as part of the Tax Cuts and Jobs Act at the end of 2017 and others left out of that package were renewed as part of the budget deal in early 2018,” the BTEC and BTU Act Coalition wrote in the letters, noting that members of the House and Senate are now considering the reauthorization of these credits. “One aspect of energy tax credits that has been troubling to us is that the investment credit provisions recognize some renewable thermal technologies (e.g. solar and geothermal) but not biomass thermal. Yet the code does recognize investments made in generation of electricity from biomass. We ask you to consider a long-term energy tax policy that does not pick winners and losers but gives equal consideration to all qualified renewable energy technologies, including those for thermal energy, which represents about one-third of total energy consumption in America.”

According to the letter, the committees’ consideration of the BTU Act of 2019 “will send a powerful signal that advances wood heating technology, such as that embraced in many cold, forested regions of the country, is deserving of parity tax treatment like that enjoyed by solar thermal, geothermal and all other renewable energy technologies.”

“Harnessing the potential of biomass thermal energy can increase rural economic development, job creation, and energy savings,” the letter continues. “When other heating fuels hit record highs in recent winters, modern wood heating systems provided cost savings of nearly 50 percent through utilizing fuels that come from our productive forests. The main hurdle that is precluding homeowners and businesses from converting to biomass thermal systems is the upfront capital costs of conversion. By granting a modest investment credit, Congress can break down that barrier and kickstart market uptake of the advanced wood heating technologies. The BTU Act seeks only a five-year authorization, through the 2023 tax year.”

Full copies of the letters can be downloaded from the BTEC website.