Federal Tax Credits for Energy Efficiency – Wood Stoves, Pellet Stoves, Fireplace Inserts
Posted by Norman Fong, October 19th, 2011

The Federal Tax Credit for Energy Efficiency – Wood Stoves, Pellet Stoves, Fireplace Inserts expired in 2011. The President chose not too extend this tax credit. Local energy utility companies like PG&E have their own energy efficiency rebates. To find out if rebates or other incentives are available in your area, visit the ENERGY STAR Rebate Finder.
What other rebates are available?
Delta County, Colorado has a rebate. Other areas have change-out programs.
Be sure to place carbon monoxide and smoke detectors near the stoves to ensure safety.
Wood Stoves, Pellet Stoves, Fireplace Inserts Rebates
A chill is in the air and temperatures are dropping fast. Wood stoves, Pellet Stoves, and Fireplace Inserts that heat specific rooms are popular and are aggressively marketed. Everybody want to save money, so here is a tax credit that helps make a new wood stove or pellet stove more affordable.
For 2011, the Federal Tax Credit for energy efficiency drops to 10%, up to a $500 maximum. (2011 Federal Tax Credit information for Biomass Stoves)
- Oil and gas furnace and boiler incentives are capped at $150
- Additional $50 for efficient furnace fans
- Wood heating system, biomass stove incentive capped at $300
- Oil furnaces, boilers, and gas boilers must be 95% efficient. (It was 90% in 2010)
- Existing home and principal residence. New construction and rentals do not qualify.
- Expires December 31, 2011 – Consult the What other rebates are available? below for other possible rebates.
The 2011 tax credit reverted to 2005-2008 levels. Anyone who previously took advantage of the program can not apply for incentives that exceed $500. IE If you claimed $500 between 2005 – 2008 on a previous energy efficiency project, or at least $500 tax credit from 2009 – 2010, you are ineligible for the 2011 energy efficiency tax credit.
If you used say $200 of the $500 energy efficiency tax credit from 2005 – 2008, and did not utilize the 2009 – 2010 energy efficiency tax credit, you would still have a $300 credit available.
What are Pellet Stoves?
Pellet stoves burn compressed sawdust and typically hold 24 hours worth of pellets. Look for easy to load and clean openings in Pellet stoves. These stoves are more efficient than wood burning models, but need power to run circulation fans.
In 2009, burning pellets costs about 15% less than oil, and 40% less than electrical heat, but 25% more than natural gas. Prices change yearly though.
The Government has a powerful renewable energy incentive designed to reduce our reliance on foreign oil and increase clean, efficient home heating with wood logs and pellet fuels. The stoves must have a thermal efficiency rating of at least 75% as measured using a lower heating value. Vendors have labeled which of their products qualify. Regency Fireplace products has a list of products that qualify.
This credit reduces the amount of tax you owe. The credit is a reduction of total income tax at the bottom of your return. This tax credit is a non-refundable tax credit. Consult your tax adviser for details. Use it or lose it!
The US Government’s Energy Information Administration has a Heat Calculator Spreadsheet to help you compare alternative heating source like wood and pellet stoves.
Filed under: Alternative Energy, Conservation, Eco Friendly, Effort, Energy, Green, Home, Indoor Air Quality, Medium, Money, Shopping | Tags: Federal Energy Tax Credit, Fireplace Inserts, Pellet Stoves, Wood Heat Stoves |










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