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Now Easier Than Ever for Vermonters to Stay Warm with Local, Renewable Heating

by | Jan 15, 2021

New Incentives for Advanced Wood Heat Help Vermonters Cut Costs & Climate Pollution, Bolster Local Economy

Montpelier, VT – Renewable Energy Vermont applauds U.S. Senators Patrick Leahy and Bernie Sanders and Congressman Peter Welch for supporting smart investments in renewable energy that can grow our local economy while addressing the climate crisis. Thanks to their efforts, a federal tax credit is now available to cover 26% of the installed price of new residential advanced wood heat systems, making it easier for Vermonters to stay warm this winter. “This is a real step forward in helping everyday Vermonters save money on their heating bills,” said David Frank of SunWood Biomass in Waitsfield. “It helps Vermont get closer to meeting its renewable energy goals, while supporting our local forest health and economy.”

A recent study prepared for the Vermont Department of Forests, showed that Vermont has 940,000 tons of additional wood capacity that could be used sustainably every year. If this were used locally for high-efficiency heating and hot water systems, it could replace the equivalent of 66 million gallons of heating oil annually, reducing C02 emissions by 792,000 tons per year. Utilizing renewable resources within our borders, we can forgo sending $131 million out of state every year on heating oil and instead invest $70 million annually back into our local economy. 78 cents of every dollar spent on fossil fuel heating goes out of the state, while using local wood, much like local food, keeps our energy dollars local.

Middlesex homeowner with whole house pellet boiler.

“Many Vermonters rely on their wood stoves to stay warm through our long winters,” said Congressman Peter Welch. “Reducing the cost for cleaner and more sustainable heating systems is just common sense, and a win-win for the environment and homeowners. Thank you to Renewable Energy Vermont for all they do to support local renewable energy and helping to keep our neighbors warm.”

Wood fuels sourced locally from well-managed forests and used to replace fossil fuels in high-efficiency advanced wood heat and hot water systems further the state’s carbon emission reduction commitments. The Intergovernmental Panel on Climate Change (IPCC), the leading international body for the assessment of climate change, found that “In the long term, a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fiber, or energy from the forest, will generate the largest sustained [carbon emission] mitigation benefit.” (Source)

“Advanced wood heat helps maintain Vermont’s working lands, reliably meet Vermont’s heating needs, reduce pollution, lower heating costs, and create well-paid trade jobs,” said Olivia Campbell Andersen, Renewable Energy Vermont’s executive director. “Combined with up to $7,000 in state rebates from Efficiency Vermont and local utilities, and no sales tax, the new 26% federal tax credit for advanced wood heating systems takes the chill out of winter.”

The new federal tax credit applies to the installed cost of home heating and hot water systems that utilize wood pellets, chips and cordwood at efficiencies greater than 75 percent high heat value. A federal income tax credit of 26 percent commences with systems purchased in 2021 and phases down to 22 percent in 2022 and 2023. A wood pellet stove that costs $4,000 to install in 2021 will realize a savings of $1,040 once the credit is applied to a homeowner’s 2021 tax return.

Advanced wood heat is a widely recognized, energy-efficient way to heat homes and businesses with all of the convenience of a traditional heating system, thanks to the automated system which feeds the pelleted or chipped wood fuel into the system. Advanced wood heating systems combine the convenience of a thermostat-controlled gas or oil system, with the savings of wood fuel, which has less-volatile prices than fossil fuels and is locally sourced.

More information about renewable heating, incentives, and installers can be found at


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