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30% tax credits on new stoves

Post in 'The Hearth Room - Wood Stoves and Fireplaces' started by semipro, Mar 1, 2009.

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  1. tradergordo

    tradergordo Minister of Fire

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    http://www.woodheat.org/planning/buyright.htm

    The EPA does not require stove efficiencies to be reported but for obscure bureaucratic reasons assigns default figures of 63 percent for non-cats and 72 percent for cats (and 78 for pellet stoves). Some manufacturers have paid for independent efficiency tests and show the resulting figures on their promotional brochures. But because efficiency test methods have not been standardized and regulated, you can’t be sure the figures are based on the same tests and calculations. On the other hand it appears that all EPA certified stoves are over 60 percent efficient and some can deliver around 80 percent of the fuel’s potential heat to the house. This is far better than the low-tech uncertified options, many of which are in the 50 percent range and lower. An overall efficiency higher than 80 percent is not desirable because the resulting low exhaust temperature means weak draft and the risk of water vapor condensation which damages the chimney.

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  2. wellbuilt home

    wellbuilt home Minister of Fire

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    I'm doin my part for the economy. I popped a big wad of cash on my new Equinox . My wife runs thru the mall with money dripping out of her purse .
    Whats a few % any way. I thought i was going to get stimulated ? No government cheese for me ? I never have any luck . John
  3. gyrfalcon

    gyrfalcon Minister of Fire

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    Doesn't zactly sound like you need any government cheese, eh?
  4. BrotherBart

    BrotherBart Hearth.com LLC Mid-Atlantic Division Staff Member

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    The government has put the onus on the manufacturer to get their stove efficiency certified and then to put a certification up on their website for customers to print out and retain as backup for the tax credit deduction.

    It is an expensive certification process and I don't think many are going to do it. Oil is cheap and will be for the rest of the year so they would be putting out money for possibly no return.

    We shall see.

    Edit: Here is about as much as is known at the moment about the credit from the HPBA web site.

    http://www.hpba.org/index.php?id=34
  5. Wet1

    Wet1 Minister of Fire

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    Good info, thanks for post this BB.

    Keep in mind this is for at least 2009 AND 2010, so they are looking at two years worth of sales here...
  6. asylum575

    asylum575 Member

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    I've got my eye on a Napoleon 1100C cast iron stove in brown enamel and would love to defer some of the cost with the rebate. However, I inquired from Napoleon if they had any info on efficiency. This is their response:

    "Unfortunately we have nothing that will documents this efficiency, as
    woodstove efficiencies are not fixed"

    I would think the manufacturers could move some inventory if they got on board with the EPA. Then again, do you really want Gov't to run your operatio. I guess I see both sides of the coin.
  7. begreen

    begreen Mooderator Staff Member

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    This is kind of incentive makes me barf. It makes the politicos seem like they are doing a good thing, but in fact, they don't have to put a lot of money behind it because they've set an unreasonable target. Kind of like promising your kid $100 if... he sands and paints the whole house. It's similar to WA state energy credits for solar. It's a decent credit, but only applies toward WA state made products. Want to guess how long it takes to set up manufacturing in this sector?

    What we should have is a tiered credit. Greater than 70% efficient stoves - tier 1, maybe a 10% credit, greater than 75% tier 2 - 15% credit, greater than 80% - tier 3, 20% credit. That would stimulate conversion to more efficient stove immediately, and would provide competitive incentive for the future.
  8. BrotherBart

    BrotherBart Hearth.com LLC Mid-Atlantic Division Staff Member

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    I want them to do away with all tax credits and quit using the tax code for a policy tool. One page that asks what I made and multiply by .10 and send a check.
  9. johnn

    johnn New Member

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    The little wife argues strongly, that the tax credit only applies to those earning below a certain income brackett. Anyone know for certain?(She loves to argue, load me up.)
  10. begreen

    begreen Mooderator Staff Member

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    She's probably referring to AMT. That can play havoc with credits and tax incentives. It is exactly why BB's point is well taken. Don't ask me how I know. :mad:
  11. gyrfalcon

    gyrfalcon Minister of Fire

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    Thanks very, very much for that.

    I'm wondering if this provides any hope (from the FAQ):

    "Q: How will the 75% efficiency requirement be determined?
    A: The 2009 Economic Stimulus legislation, signed into law on February 17, 2009, stated that a lower heating value will be used to measure the efficiency of a biomass-burning stove. HPBA has provided the IRS with extensive information on product efficiency. This method will include a broader range of efficient biomass products for the tax credit and be consistent with the original legislative intent. "

    Might "Extensive information on product efficiency" include enough info to allow some range of stoves to get that certification without going through an individual testing process? Normally, of course, they'd insist on it, but right now, the whole attitude is to push the money out into the marketplace as fast as possible, especially with stuff related to alternative energy. OTOH, the Treasury Dept. has its hands full right now, to say the least. I'd be a lot happier if it was on EPA to decide this.

    I'd sure say the more expensive stove makers would be making a huge mistake if they pass up the opportunity to have their stoves qualify for this. An effective 30 percent discount when you're looking at a $2,500 purchase is huge, especially in this economy.
  12. gyrfalcon

    gyrfalcon Minister of Fire

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    As far as I've heard, that's not the case, strictly speaking. But if you're caught in the AMT thing, it might mean that effectively in your situation, I guess. You should talk to a tax accountant.
  13. Harley

    Harley Minister of Fire

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    Ahmen - except the way things are heading, BB - you may have to move the decimal point over to the right by a few to get a flat tax in place.
  14. Later

    Later New Member

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    I have paid my income tax for years and felt that was my duty to a country that stood for freedom. I don't feel that way any more.
  15. billofat

    billofat New Member

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    ... the caloric value of the fuel is used as the "energy input" value when calculating the efficiency of a unit ( Efficiency = Energy Out / Energy In ).

    The Europeans use the Lower Heating Value (LHV) when calculating efficiencies, which assumes that any water vapor produced by combustion is not reclaimable heat and therefore is not counted as "usable energy".

    In the US, engineers tend to use the Higher Heating Value (HHV), which assumes that water vapor produced in combustion is a "real" loss and is counted as such. The difference is that some boilers now use "condensing" technologies ... condensing the water vapor in the exhaust path and reclaiming that heat (the latent heat of vaporization) -- these units would be over 100% efficient if the Lower Heating Value was used (they tend to be around 90 to 95% efficient with the Higher Heating Value).

    For example, Oak has a LHV of 7478 Btu/Lb and a HHV of 8550 Btu/Lb ... so a unit that has an efficiency of 65% using a typical test method, would "magically" become 74% efficient if the LHV were used instead of the HHV. It is a typical marketing and sales game designed to "scientifically" inflate efficiency numbers.
  16. EddyKilowatt

    EddyKilowatt Member

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    Well, a sizeable fraction of the country haven't felt that way any more for several years. We've gone on paying our taxes, though.

    Remember "My Country, Right or Wrong?" Take your turn in The Loyal Opposition and keep supporting your country and its democratically elected leaders.

    We'd have gone down the tubes back about 1798 if people got all pissy every time they lost an election.



    Eddy
  17. begreen

    begreen Mooderator Staff Member

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    There's lots of important information in this thread. As the year unfolds many purchase may be influenced by this credit. Please leave the politics aside for another time and place.
  18. karri0n

    karri0n New Member

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    Excellent first post Bill W. This puts a lot of these stoves into the range that they are talking about if your info is accurate.
  19. johnn

    johnn New Member

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    tradergordo:;I have visited your site by clicking on your signature, and down near the bottom clicked on "this brief comment" (which is anything but brief) and happily learned much more about EPA issues and testing procedures for effeciency. I have a small admiration for the computer skills and research abilitys of those such as yourself and many times find that I must rely on someones else to learn, for I always end up going in circles and taking all day to get somewhere. (kinda like right now) In short,,,that article was written 10 years ago,,,have all parties involved not come closer in terms of agreeing as to what would represent a "standard" for effeciency testing? Anybody have anything more current?
  20. stejus

    stejus Minister of Fire

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    I have an HI300 with a 77% optimum efficiency rating. I contacted Regency and asked if my stove qualified for the 2009 tax credit and here's what he told me.

    Thank you for contacting Regency Fireplace Products.

    The Hearth Products Association is currently waiting for the Federal
    government (Internal Revenue Service and Department of Treasury) to
    provide the rules and regulations for this tax credit, including which
    stoves qualify and how to administer the credits.

    I will email you all of the details as soon as I receive them.


    Hopefully I get some good news. I purchased (cash and carry) in late 2008 but didn't start using (permit date) until Jan 2009.
  21. semipro

    semipro Minister of Fire

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    Hey, I'm just glad to see they included stoves this time. Prior tax credits did not.

    I hope its not true that they targeted only pellet stoves with this rule as someone else mentioned. That would be a shame.
  22. tradergordo

    tradergordo Minister of Fire

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    BIG NEWS FOR THE HEARTH INDUSTRY: The details of the 30% tax credit are OUT. Woodstock is already JUMPING on it! See:

    http://www.woodstove.com/pages/sale10day/sale.html#QA

    End of winter clearance prices + 30% tax credit could make for some serious bargains for those looking to buy.

    In a nutshell, the stoves have to be tested by an independent lab. Companies (like Woodstock) that are already familiar with the testing procedure, or who already have had their stoves tested so they know what to expect, will probably be following in Woodstock's footsteps... Its great to see that at least some woodstoves are going to participate and should qualify (we'll know definitely which ones qualified in about a month or two it seems).

    I said it already, but the greatest thing about all of this is that everyone is FINALLY going to be able to see ACTUAL INDEPENDENTLY MEASURED STANDARDIZED efficiency numbers from every stove manufacturer that is worth buying from (and if a manufacturer doesn't think their stove will qualify or they aren't willing to pay for testing, I don't really care about their stoves). This is GREAT for consumers in my opinion, and I look forward to the results pouring in over the next year.
  23. tradergordo

    tradergordo Minister of Fire

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    Here's the Q&A;about the tax credit from the Woodstock website:

    Q: Are all wood stoves eligible for this 30% tax credit?
    A: No. The 2009 Stimulus Plan (the “American Recovery and Reinvestment Act of 2009”) specifies that only wood stoves that are 75% efficient will qualify.

    Q: How will the 75% efficiency requirement be determined?
    A: The 2009 Economic Stimulus legislation was signed into law on February 17, 2009, and the government (specifically the IRS and the EPA) has just decided on the method that they will use to determine woodstove efficiency.

    A Certified Independent Testing Laboratory will test our stoves during the first two weeks in April to verify that the stoves meet or exceed the 75% efficiency requirement.

    Q: How do you know that your wood stoves will qualify?
    A: There are really two reasons: (1) Our stoves have been efficiency tested before, during the EPA certification process, and (2) we have our own laboratory in New Hampshire and we know how our stoves will perform under the methods proposed by the federal government.

    Q: When does this tax credit go into effect and how long will it last?
    A: The tax credit is good for two years. It goes into effect January 1, 2009 and is valid only for the purchase of a qualifying stove in 2009 and 2010. The sales receipt must indicate that the purchase was made between January 1, 2009 and December 31, 2010.

    Q: How will I use this tax credit?
    A: You can claim this credit on your federal income tax form at the end of the year. The credit decreases your tax liability. (It does this by increasing your tax refund or, if you owe taxes, it decreases the amount you have to pay.

    Note: This is a tax credit, not a tax deduction. A tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions - such as those for home mortgages and charitable giving - lower your taxable income.

    Q: What documentation will I need?
    A: We will provide you with a signed certification that the wood stove that you purchase from us qualifies for the tax credit. We will post copies of these certifications on our website to make it easier for you. You must keep a copy of the certification statement and the sales receipt for your records, but do not have to submit them with your tax return.

    Q: Is the tax credit good just for wood stoves?
    A: No, the 30% also applies to qualifying windows, storm windows, exterior doors, insulation, and certain types of furnaces and water heaters.

    Note: The 30% amount is subject to a maximum of $1,500 per homeowner for all improvements combined.

    Q: Is it a max of $1500 per household per year? Or is $1500 the max over the 2 years?[/b]
    A: $1,500.00 is the maximum over two years, per household.

    Q: I am building my own home. Can I get the $1500 tax credit as part of my new home construction?
    A: No, the $1,500 tax credit is designed only for existing homes, and includes energy saving windows and doors, insulation, high efficiency water heaters and furnaces, and biomass stoves. However, if you are building a new home, there are other tax credits available for building energy efficient homes. Plus, there are new home tax credits available for photovoltaics, solar water heaters, small wind systems and fuel cells.
  24. tradergordo

    tradergordo Minister of Fire

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    Q: Where can I find information on receiving the tax credit for other energy efficiency purchases (insulation, windows, etc.)?
    A: To determine whether other products qualify, check with either the manufacturer or the distributor/store. This piece of legislation was large, complex, and passed in a hurry, so it may take until late spring until everything gets settled. Even in our case, the method for testing wood stove efficiencies was not determined until after the bill was passed!!

    Q: Can I buy more than one woodstove and still get the credit?
    A: Yes, you could buy two qualifying wood stoves and get a 30% tax credit on each stove (up to a maximum credit of $1,500.00)

    Q: I'd like to see your certifications before I purchase. Can I take advantage of your current sale but delay shipment until after your certification testing in early April, 2009?
    A: Absolutely. Normally, we require that stoves sold during the year-end clearance be shipped within a month (by the end of April). If you wish to wait until after the certification testing is done, that would be fine, and your shipment would be delayed until May, or early June.

    Q: Your literature lists all of your woodstoves at 72% EPA Efficiency. What makes you so sure that your stoves will qualify for the 75% minimum?
    A: The EPA Efficiency is a “default” efficiency... in other words, every EPA Approved Catalytic Woodstove is presumed to be at least 72% efficient. Under the actual efficiency testing standards proposed by the federal government our catalytic woodstoves will be in the 78-80% range.

    Q: Can I take the credit if I buy one of your stoves second hand?
    A: No, the legislation specifically states that qualified equipment must be new.

    Q: I bought one of your stoves on December 31st, 2008. Can I qualify for the tax credit?
    A: Unfortunately, no. The credit only extends to qualifying stoves purchased after January 1, 2009.

    Q: Can I get the tax credit if I buy one of your gas stoves?
    A: No, the credit only applies to “biomass” stoves and, unfortunately, not to our gas stoves.

    Q: Why was 75% efficiency selected?
    A: The 75% efficiency number was approved by the U.S. Congress in 2005 as part of the Energy Policy Act and was used again for this tax credit.

    Q: This deal sounds too good to be true. What am I missing?
    A: We were surprised too. The original tax credit was scheduled to be $300 for residential energy conservation improvements, but when the 2009 Stimulus Bill (“American Recovery and Reinvestment Act of 2009”) was signed in February of 2009, the total amount went from $300.00 to 30% (with a maximum of $1,500). This means that you get a 30% discount, from the federal government, on the first $5,000.00 of qualified residential energy improvements you make to your primary residence in 2009-2010.

    Q: Can I get a tax credit for related items (i.e. chimney parts, installation materials and labor, hearth pads, and so on) to get the maximum credit?
    A: No, the tax credit only applies to the purchase price of the stove itself, and not related expenses.
  25. karri0n

    karri0n New Member

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    Hey mods, any chance for a sticky on this? I would hate for this one to go by the wayside...
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