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Forest camping

Residential Appliance Incentives

D. European Programs

Many countries throughout Europe have experienced a substantial increase in residential wood heating—especially in the form of ultra-clean pellet stoves and boilers—due to strict policy measures combined with generous incentives. This has allowed for more widespread adoption and technological advancement of biomass appliances than is currently being realized in the United States.

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Figure 23: Savings on a $10,000 Biomass Appliance (stoves, masonry stoves, boilers, etc) (International Energy Association)

In many cases the motivation is to reduce CO2 emissions and to meet renewable energy targets, but in many countries with abundant biomass resources, incentives are put into place in order to stimulate job growth. This has largely been the case in Upper Austria—a state about the size of New Hampshire--where consumers can take advantage of multiple incentives to purchase pellet boilers. The manufacturing of these boilers and the fuel distribution network, in turn, supports 4,500 jobs in the region.2

Often, incentive programs are implemented in tandem with regulatory policies that progressively tighten emission limits and efficiency requirements over time. The result is stronger investment in biomass boilers that are both cleaner and more efficient (Fig. 24). Public information and education campaigns are also used to reinforce these positive trends.

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Figure 24: Upper Austria Installed Capacity of Biomass Boilers & Unit Efficiency Increasing Yearly (Biomass Heating in Upper Austria)

One reason that many European countries provide such strong incentives for home biomass heating is that they are mandated to increase their renewable energy production under a directive from the European Union Parliament. This requirement is similar to the U.S. state Renewable Portfolio Standards. The European mandates, however, are much more far reaching, requiring each nation within the European Union to commit to the directive by drafting Energy Actions Plans.3 Unlike many Renewable Portfolio Standards in the United States which typically only target electricity production, the European standards have provisions for renewable heating. The result is that many European nations have sought to reach their renewable energy targets by incentivizing biomass appliances.

The success that many of these programs have realized in terms of growing the market for the cleanest, most efficient biomass heating systems is well documented. It also offers a good example of the effect that well crafted incentive programs can have. The Market Stimulation Program in Germany, for example, uses both grants and loans, which are flexible so that they can be adjusted according to budget constraints or to maintain program goals. Additional grants and bonuses are even provided for more innovative technologies such as secondary emission reduction devices. Furthermore, if a stove or boiler does not meet certain standards for efficiency and emissions, the government will not offer a subsidy. One drawback of the program is that it operates on a fixed yearly budget, which is sometimes exhausted before the end of the year, as was the case in 2006. This can cause consumer uncertainty and can have a drastic effect on the market (Fig. 25).

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Figure25:  The Effect of an Incentive Halt on the German Pellet Heating Market (Verma V.K. et al.)

Another good example of European incentives is a finance law passed in France, which altered the tax code to promote sustainable development, energy conservation, and renewable energy. Under this law, a tax credit was created that covers 50% of the cost of a biomass heating device. A 50% tax credit is also provided for a home energy audit when otherwise not required by law. Like many European incentive programs, biomass heating systems must meet a minimum efficiency standard as well as other technical requirements. The effects that these tax incentives had toward growing the biomass heating market--and thus reaching toward national renewable energy goals--are abundantly clear in figure 26.


Figure 26: Incentives’ Effect on the French Pellet Heating Market (Verma V.K. et al.)

1 International Energy Association. Global Renewable Energy-Policies and Measures. Accessed May 2011. < >
2 Egger, Christiane et. al. Biomass Heating in Upper Austria: Green Energy, Green Jobs. O.O. Energiesparverband. 2010
3 European Comission. Renewable Energy. Accessed on May 7, 2011 <>
4 Verma, V.K. et al. Small scale biomass heating systems: Standards, quality labeling and market driving factors-An EU outlook. Biomass and Bioenergy. 2009.
5 International Energy Agency. Tax Credit for Energy-saving and Renewable Energy Equipment. Accessed on May 7, 2011 <>

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