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Forest Lake

Why Wood Heat Should be Incentivized

A. The Case for Wood Heat Incentives

In general, biomass heat fulfills the same public policy objectives that are the basis for the incentives and subsidies that other renewable energies receive, such as reducing consumption of foreign oil to increase American energy independence, reducing emissions of greenhouse gasses and air pollutants such as mercury and sulfur dioxides, and strengthening local economic development and job creation. Specifically, incentivizing clean, efficient home heating appliances can achieve these goals in an economically efficient manner while at the same time empowering more homeowners to use renewable energy.

Despite the widespread use of traditional wood stoves, modern biomass combustion systems have a relatively small market penetration and pose a significant price barrier to consumers- especially the low-middle income consumers to whom renewable energy technology is financially out of reach. Over 95% of Americans believe that improved appliance efficiency is important for personal financial reasons. 1Although these cleaner and more efficient systems represent a new class of technology, they are still typically less expensive than other renewable technologies such as solar and geothermal. This means that applying a similar incentive amount enjoyed by other renewable will not only be effective in encouraging more wide scale adoption of this technology, but that it can also make this technology affordable for lower income homes. Even traditional stove installations are still nowhere near the scale that they could be at.

A 1994 report indicated that wood heat consumption could double within the next twenty years, 2but instead it declined for many years and is only now beginning to come back. Incentives are needed to make biomass heat more competitive in the market, and to bring the cost of the cleanest burning, most efficient stoves down to an affordable level for low income Americans. As market penetration increases, the incentives can be scaled back or eliminated completely.

Incentives can help transform biomass heating in the US into a cleaner, more efficient and more effective renewable energy. Since the only major public policy downsides of wood heat are emissions and sustainability concerns (see Chapter 4, Section B: Sustainability) incentive programs are well-suited to address these concerns by encouraging adoption of the cleanest and most efficient equipment and hastening the removal of old, polluting stoves. Incentive programs can drive the industry to become cleaner, while helping to lower the cost of the cleanest equipment so it can be more affordable to average American families.

1 Cooper, M. Public Attitudes Toward Energy Efficiency and Appliance Efficiency Standards: Consumers see the Benefits and Support the Standards. Consumer Federation of America. March 2011. Pg. 1
2 Warsco K. Conventional Fuel Displacement by Residential Wood Use. Forest Products Journal. Vol 44. No 1. Jan. 1994. Pg 68.

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