Families across the U.S. still rely heavily on fossil fuels to heat their homes during the winter months. These fuels include propane, heating oil and natural gas, according to Renewable Energy World. Some families rely on electricity-powered heaters, which are more efficient than fossil fuels. Still, when a region experiences days of extreme cold, these families’ electrical bills may skyrocket.
BTU Act of 2013
Several U.S. senators, including Susan Collins (R-Maine) and Angus King (I-Maine), worked together to develop the Biomass Thermal Utilization Act of 2013 (BTU Act of 2013). This act created an amendment to the Internal Revenue Code, providing for tax credits for “residential energy efficient property.” The BTU Act of 2013 enables homeowners and businesses to apply a tax credit to their qualified biomass fuel purchases.
The act goes further and defines qualified biomass fuels as “plant-derived and available on a renewable or recurring basis.” The fuel must be used to heat buildings or water used in buildings.
Energy industry managers forecast potential for plant fuels to provide a realistic source of home heating fuels in the Northeast. In a study called “Heating the Northeast with Renewable Biomass: A Bold Vision for 2025,” industry leaders estimate that wood and agricultural residuals could potentially heat over 1 million new homes and businesses throughout New England and New York. Families and businesses switching to biofuel could reduce the usage of propane and heating oil by as much as 1.3 billion gallons.
If the home heating industry is successful in making this switch, the Northeast could benefit, allowing this region of the country to reduce its dependence on old-fashioned heating oil.
Biomass Fuel & Solar Power
Sustainable options like biomass fuel may have been prompted by other green initiatives, such as the government’s focus on solar energy. In 2010, total U.S. solar capacity was 2,326 megawatts. In February of 2014, this propelled to over 12,000 megawatts, an increase of over 400 percent, as reported by the Refrigeration School. Government support helps lower the cost of alternative energy sources, helps raise awareness about their existence, and helps encourage new and better technologies to emerge. If solar energy could make such a drastic jump in just a few years with the power of policy behind it, why couldn’t biomass fuel follow in suit?
Changing Heating Technologies
Currently, many homes in the Northeast use old-fashioned heating oils, which must be brought to each home by a large tanker. Families are familiar with how much heat they will get from each oil delivery. When their supply of oil gets low, it’s time to order more. Homeowners still reliant on heating oil pay more and more every winter as the price of oil and propane rises. What many might not be aware of yet is that if they take advantage of the BTU Act’s tax credits, they can benefit twice: they will save money by applying the credit to switch heating systems, and they will end up paying less to heat their homes in the long run.
Alternative Energy Leaders
Some U.S. states—Massachusetts, New York, Connecticut, Maryland, Maine, the New England States and even Colorado and New Mexico—have introduced state legislation that allows residents to take advantage of new heating methods. In many of these states, families are being offered alternative energy tax credits to help them switch to renewable heating methods.
Europe has already changed the policies of several countries, affecting a changeover to renewable heating. In Denmark, for example, it is now illegal for new buildings to rely on fossil fuels to provide heat. Other countries that have introduced alternative energy policies include Austria and Sweden.
As with solar energy, government can help spur a larger-scale adoption of biofuel. The BTU Act adds an investment tax credit for high-efficiency biomass heating technology to the federal tax code for two populations. Section 25D offers a 30 percent investment tax credit for residential applications of renewable energy in the form of biofuel. Section 48 is a tiered tax credit, and it covers 15 to 30 percent of the installed costs of a new biomass-fueled system for commercial or industrial applications.
Special thanks to Monica Gomez for this bog post. Monica is a freelance clean energy writer and often encourages people go green help the environment.