Some Drolets and Osburns join the EPA tax credit qualifiers

[begreen]

EDIT: Read through the whole thread for caveats - BG

SBI has posted a list of qualifying stoves. This represents a great value for new installations where applicable.

(broken link removed to https://www.drolet.ca/file/Drolet_Tax_Certificate.pdf)

https://sbiweb.blob.core.windows.net/media/6902/tableau-tax-credit-osburn-2022.pdf

 

[EbS-P]

Great news. So if I purchased in 2021 can I file an amended return with this documentation and get my 26% back??

I can’t be the only person. The Escape 1800 stove and insert were quite popular and sold through Costco.

 

[begreen]

I was wondering the same thing. I'm not sure if they modified the stoves or testing method. It's a good question for Drolet support.

 

[EbS-P]

The language is pretty clear in the link now that I read the second page.

Now I’m more interested in how this recert. Worked. New test protocol, using LHV and calling it HHV, Government change or just companies finding the wiggle room. My insert didn’t get more efficient after I installed it.

 

[ABMax24]

The way I read it there was no new test, but a different interpretation of the requirements to meet that tax credit. SBI believes that if the stove met 75% heat transfer on low burn it qualifies for the credit. I'd be curious to know how the EPA or IRS feel about this.

I'm wondering if using this logic there are other stoves from other manufacturers that will also meet this 75% cutoff.

 

[begreen]

Just checked the EPA database. There is only one SBI family stove listed there for 75% HHV or better

- 2.1 Series (Destination 1.9, Matrix 1900, CW2100, Green Mountain Insert 50, HEI90, and Archway 1500) -

SBI's explanation:
THE VAST MAJORITY OF HOMEOWNERS OPERATE THEIR APPLIANCE ON THE LOW BURN SETTING TO HEAT THEIR HOME. WE HAVE THEREFORE USED THE LOW BURN HEAT TRANSFER EFFICIENCY RESULT TO QUALIFY OUR VARIOUS PRODUCTS FOR THE US TAX CREDIT, WHICH REQUIRES THERMAL EFFICIENCY MINIMUM OF 75%.

I did more digging and found some documentation somewhat backing SBI's position. This is from the published document for Biomass Thermal Utilization (BTU) Act of 2021 (S.1191, H.R.3251)

Under the Business Tax credit section it says:
This provision adds biomass fuel property to the list of existing technologies that qualify for the business renewable energy investment tax credit in Section 48 of the Internal Revenue Code. To qualify, the biomass fuel property must operate at a thermal efficiency rate of at least 75 percent lower heating value (LHV) and used for space heating, air conditioning, domestic hot water, industrial process heat, or any combination.
But then, in the residential tax credit section it says:
This provision extends the Section 25d investment tax credit for residential open-loop biomass heating property through the end of 2028. Qualifying biomass heating property must operate at thermal output efficiencies of 75 percent (higher heating value) and be used to generate heat, hot water, or steam.
(broken link removed)

So is SBI challenging the EPA here or what? The Tax Code for section 25d is clear:
"The term "qualified biomass fuel property expenditure" means an expenditure for property- which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel)."

 

[EbS-P]

It’s not like IRS has enough staff to audit someone over 500$ and if the stove is not on the epa list but SBI says take the credit. Seems like IRS is the enforcer here.

It does seem like a challenge. They will sell at lot more stoves if the have enough supply.

 

[begreen]

Yes, and it sounds like this may be leading up to a court challenge. The EPA's wood stove database only lists HHV. Going by LLV is a big change, especially if it gives a stove company a decided sales advantage over another. There are many stoves that have an HHV just below 75% but test with an LLV well over 75%. For example, the Alderlea T6 has an LLV of 80% and the Regency 2450 comes in at 78.4%.

Considering that most people do not run their stoves at maximum output, there is some validity to SBI's position. It makes me think that the normal running efficiency of a stove may be more like an average of LHV + HHV / 2.

 

[EbS-P]

The previous credit (300$ before 2021) was it HHV. I know my F400 didn’t qualify. Switch in LHV is a huge deal.

I’ll file an amended return for 500$ more back. Just to see what happens.

Evan

 

[begreen]

I sent an email to SBI requesting documentation of approval for this change.

 

[brenndatomu]

I sent an email to SBI requesting documentation of approval for this change.

We have a couple SBI reps that are members here... @SBI_Nick and @SBIMarc

 

[begreen]

Kudos to SBI support. I heard back from them. The response was:

The tax credit is not an EPA initiative. It is an IRS initiative. EPA is not really involved with this tax credit.

The IRS says that the unit must meet at least 75% efficiency using HHV. This efficiency can be achieved at a specific setting (ex: low burn) or it can be averaged on all burn rates (overall). The EPA database only shows the efficiency on an overall basis.

We qualify our units if they meet 75% HHV on the low burn rate. This is because the IRS has accepted this interpretation in the past (for previous tax credits) and does not specifically request the overall measure.

Hope this clarifies things. What the IRS will be looking for in the manufacturer’s certificate of qualification, which we provide on our website.