Senator Bingaman introduces bipartisan legislation to provide incentives for high-efficiency biomass heating systems in commercial and industrial installations
The Biomass Thermal Energy Council (BTEC) joined a chorus of industry and non-profit voices in strong support of Senators Jeff Bingaman (D-NM), Olympia Snowe (R-ME), and Diane Feinstein (D-CA) for their introduction of a bill to help businesses across the country meet their heating needs with renewable biomass.
The "Expanding Industrial Energy and Water Efficiency Incentives Act of 2012" would establish a tiered corporate tax credit for 15% or 30% of the installed cost of biomass-fueled heating (or cooling) systems for commercial or industrial applications. The credit would have no maximum and would be available for biomass thermal systems placed in service on or before January 1, 2016.
"This bipartisan bill will provide highly efficient biomass thermal equipment the same incentive that exists for every other renewable energy technology, including solar thermal and electric, wind, and geothermal," said Joseph Seymour, executive director of the Washington D.C.-based Biomass Thermal Energy Council. "The bill's aggressive two-tiered structure will promote the most advanced and cleanest biomass thermal technologies, and will help the commercial and industrial sector – two of the nation's biggest consumers of thermal energy – switch to renewable biomass fuels that we produce here in America."
The U.S. Energy Information Agency has estimated that approximately one-third of U.S. energy consumption is for thermal energy used in heating, cooling, and processing. By offsetting fossil fuel use in the heating sector with renewable biomass, the bill would reduce American consumption of foreign oil and other non-renewable fossil energy by millions of gallons and lower the associated greenhouse gas emissions.
To qualify for the first tier (a 15% credit), biomass boiler and furnace property would be required to operate at efficiency levels between 65% and 80%, as measured by the Higher Heating Value (HHV). The second tier (30% credit) would be available for those operating at 80% efficiency and above. Large scale biomass thermal systems have already been widely deployed in Europe, where government incentives have played a vital role in helping reduce fossil energy and creating new clean energy jobs.
Numerous leading environmental, non-profit, and industry stakeholders joined BTEC in issuing support for the legislation.
Brenda Quiroz Maday, executive director, Biomass Energy Resource Center (BERC), in Montpelier, VT said her organization's mission is to support communities and corporations' efforts to adopt sustainably managed biomass resources throughout the country. "We have assessed the technical and economic feasibility of several biomass thermal lead systems and can attest to the high percentage of those that have positive returns," she said. "The bill will help more projects reach reality."
According to BERC's experience working with communities and potential installers, the high initial cost associated with the installation of a biomass system is often the only thing standing in the way of helping provide clean and renewable heat for people. "The incentives provided in this piece of legislation will help those wishing to promote clean, renewable energy as well as sustainable jobs in rural locations overcome this hurdle," said Quiroz Maday.
Similarly, Sustainable Northwest, based in Portland, OR calls the legislation an important step towards recognizing the value of thermal energy in the country's renewable energy portfolio. "The two-tiered investment tax-credit structure encourages smart investments to offset fossil fuels with cleaner and cheaper sources of energy and promotes the best and most efficient use of these technologies," said Goebel. Thermal energy generated from biomass resources is a critical part of reaching our nation's renewable goals."
Sealaska is the Alaskan Native Corporation for Southeast Alaska. Its wholly owned subsidiary Haa Aani is responsible for creating new economic opportunities for the region's rural communities. The company has invested almost $1 million dollars in its headquarters building in Juneau, Alaska to install a biomass heating system, the first commercial building in Alaska to be heated with biomass from wood pellets.
This conversion, coupled with Haa Aani's delivery systems of biomass to its customers, is proving that in Alaska, biomass thermal heating systems provide vast potential for decreasing dependence on fossil fuels, said Richard P. Harris, executive vice-president, Sealaska Corporation. "Incentives like this will help convince consumers that there is public policy support for conversion to biomass space heating and encourage businesses to make the capital investment to update their heating units and switch to locally fueled biomass systems."
Brian Bradshaw, co-chair, Heating the Midwest with Renewable Biomass, said nationally, over 20 billion gallons of liquid propane and fuel oil valued at over $50 billion are used to heat industrial and commercial facilities annually with significant percentages of Midwest industrial and commercial buildings' heat relying on these expensive fuels, especially in rural areas. "Increased use of regional wood and agricultural materials for thermal heating and combined heat and power projects offer significant economic benefits," he said.
Similarly, David Dungate, president ACT Bioenergy LLC, based in Schenectady, NY said the company's typical biomass boiler customers are in rural communities that are being punished by high fossil fuel costs. The incentives, said Dungate, will help those companies more easily make the decision to invest in biomass boiler systems with superior performance. "Because increased boiler efficiency results in both reduced fuel consumption and reduced air emissions; incentivizing the highest efficiency boilers makes economic and environmental sense."
Expansion of the Act will ease the burden of project capital costs and make it easier for end users to implement biomass technologies," said Robert Maine, general manager, Cambridge Environmental Technologies. "We urge Congress to pass this bill."
For more information on the biomass thermal industry and related policy, please visit www.biomassthermal.org
