Monday, March 31, 2008

Tax credit could spark stove upgrades

Portland Press Herald
March 31, 2008

People who switch to new, more efficient models would save $500 under Susan Collins' plan.

By JONATHAN E. KAPLAN, Washington D.C. correspondent March 30, 2008


WASHINGTON — Congress is considering a $500 tax credit to entice owners of older wood-burning stoves to buy new, cleaner stoves. The idea is to combat rising energy prices in an environmentally friendly way.

About 80 percent of homes in Maine use heating oil for warmth, making consumers susceptible to price fluctuations, and about 40,000 Mainers own wood-burning stoves, according to data from the Maine Office of Energy Independence and the U.S. Census Bureau.

Sen. Susan Collins, R-Maine, who proposed the tax credit in the Senate, and the Environmental Protection Agency want owners of older wood stoves to switch to newer, government certified stoves. They say newer stoves emit 60 percent to 80 percent less pollution and they are 50 percent more efficient.

"Unfortunately, many of the wood stoves purchased decades ago are outdated, inefficient, and are contributing to both indoor and outdoor air pollution," Collins said. "The emissions from these old wood burning stoves present a serious health concern, contributing to such respiratory ailments as asthma and bronchitis."

Ian Burnes, the deputy director of policy and planning at the Maine Office of Energy Independence, said, "The more we can rely on indigenous resources, the more stable it will be for our economy and ultimately good for the environment as well."

The Hearth, Patio & Barbecue Association, a Washington, D.C., lobbying group that represents wood-stove manufacturers, estimates that replacing 20 stoves would remove one ton of particulate from the air, said spokeswoman Leslie Wheeler.

Despite the environmental benefits, the agency has had a difficult time persuading owners of older stoves to replace them – in part because it can be expensive.

The EPA in 1988 began requiring wood stoves to emit less pollution because of concerns about unhealthy air quality.

Smoke from wood stoves and fireplaces contributes about 6 percent of total air pollution, mostly during the winter months, according to the EPA. The particulate matter in smoke can lead to and exacerbate chronic lung and heart diseases.

The EPA has awarded $600,000 in grants during the past two years to communities across the country to help them entice owners of the older stoves to replace them with new stoves.

In Libby County, Montana, in 2005, a congressional "earmark" provided $1 million, manufacturers chipped in $1 million and the EPA awarded $100,000 to help stove owners defray the costs of buying a new stove.

Under Collins' plan, a consumer who buys a new wood-, pellet- or biomass-burning stove and gives back his older stove could claim the $500 tax credit. Pellet stoves rely on sawdust or wood chips and biomass stoves can burn nutshells, corn kernels, barley, dried cherry pits and soybeans, according to the Department of Energy.

Manufacturers of wood stoves are having a good year as consumers looked to lower their energy bills during this never-ending winter.

Business has "picked up tremendously," since 2007, when winter was followed by a quick rise in temperatures, said Wheeler, the spokeswoman for the industry association.

There is "a boom" in the sales of wood stoves, said Bret Watson, the president of Jotul North America, which is based in Gorham. The company now has 82 employees, a record for company employment in North America, Watson said.

He added that the industry favors financial incentives rather than government enforcement measures to get people to make the change, arguing that a tax credit helps lower- and middle-income consumers and that the new stoves pose less of a fire risk than the older ones.

The new stoves are more efficient and emit less pollution, but the stoves hold less wood than the older ones did so they need to be replenished more frequently, said Richard Hill, a mechanical engineering professor at the University of Maine in Orono.

The tax credit would have a "significant impact on the industry," Wheeler said, noting that the least expensive stoves start at $1,500.

The credit must make its way through the budget process before it becomes law.

Although the Senate adopted Collins' proposal, the House of Representatives did not include a similar provision in its budget resolution. Rep. Tom Allen, a Democrat, and Sen. Olympia Snowe, a Republican, would support such a tax credit, said spokesmen for both lawmakers. Rep. Michael Michaud, a Democrat, has co-sponsored similar legislation in the House.

"Stoves are an important heating source for many Mainers," Michaud said in a statement. "I support this legislation because it would support cleaner air, healthier homes, and greater fuel efficiency."

The House and Senate must reconcile the differences before April 15 and the chairmen of the House and Senate tax-writing committees must agree to it as well before it is included in the 2009 budget.

A similar tax credit was included in the Senate version of a massive energy bill that passed in 2003, but it was not included in the final measure. The nonpartisan Congressional Budget Office estimated that the tax credit would cost $7 million over a five-year period.

The office has not reviewed Collins' proposal.

Washington D.C. Correspondent Jonathan E. Kaplan can be contacted at (202) 488-1119 or at:

jkaplan@pressherald.com

Copyright © 2008 Blethen Maine Newspapers

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