Replacing woodstoves can net tax credits

Replacing an old, inefficient woodstove with a new one that meets environmental guidelines can earn homeowners nearly $2,000 in state and federal tax credits, experts say.

Homeowners who purchase a 75-percent-efficient wood or pellet stove, fireplace or fireplace insert can receive a 30 percent federal tax credit for costs incurred, up to $1,500, says Larry Milligan, owner of Orley's Stoves and Spas in Medford.

"We explain this is not a rebate. But this is a dollar-for-dollar tax credit, and not simply a tax deduction," Milligan says.

In addition to the federal credit, the Oregon Residential Energy Tax Credit program offers a tax credit of up to $300 for installation of qualifying wood or pellet stoves. Retailers and environmental officials want to make sure the public understands the language of the 2009 economic stimulus legislation, which states the federal tax credit is for "biomass heating appliances," Milligan says.

"Which most people don't understand means their woodstove (or fireplace)," he says.

The bottom line is homeowners can benefit from the tax credits. And everyone will benefit from cleaner air, Milligan says.

"This is great for the public," he says.

Woodstove season will start once cooler weather arrives, and now is the time to make the change, says Rachel Sakata, air quality planner for the Oregon Department of Environmental Quality in Portland.

"We want people to burn smart," Sakata says.

Studies show the new stoves improve both indoor and outdoor air quality, says Sakata. Many of the older stoves still in use are not properly installed. This allows smoke to seep inside homes as well as up chimneys, creating air pollution, she says.

"The elderly and children are especially sensitive to particulate matter," Sakata says.

Medford was part of a 10-year study testing the efficiency of the new stoves' high combustion features. The results of that study showed conclusively that environmental woodstoves helped clean up the air, Milligan says.

Results like those in the Medford study have persuaded the government to create incentives such as the current tax credit to get the "dirty burning" stoves out of circulation and replaced with "green" stoves. The high-efficiency stoves burn both hotter and cleaner than noncertified stoves. And they use far less wood, Sakata and Milligan agree.

The new stoves have high combustion chambers which consume both wood fiber and gasses, Milligan says.

"Woodstoves offer the least expensive heat," Milligan says. "We have models that burn for 20 to 40 hours on one load of wood."

Oregonians who heat with wood and pellet stoves can claim a fuel tax credit worth $10 per cord or per ton of pellets. These credits can be added to the federal credit.

The tax credits only apply to new installations in primary residences, Milligan says.

"We've had people come in to us and want to use the credit on an installation in their vacation home. That doesn't work," Milligan says.

Qualifying products include many EPA-certified freestanding wood or pellet stoves, inserts and fireplaces. Homeowners should contact their local hearth appliance dealer to determine which brands and models qualify for the tax credit.

The unit must be fully installed by Dec. 31 to receive the credit for 2009, but the program is expected to remain in place for 2010, Milligan says.

Reach Sanne Specht at 776-4497 or

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