Generous rebates and incentives are available for wood heating appliances of all sizes for both residential and commercial customers.
Automated Wood Heating Systems
- $6000 for Wood Pellet Boiler or Furnace from Efficiency Vermont and the Clean Energy Development Fund
Wood and Pellet Stoves
- $400 Wood Stove Changeout Rebate from Efficiency Vermont
- Vermont Electric Coop Members: $150 Bill Credit for the purchase of a pellet stove
Federal Tax Credit for Residential Customers
- All wood heating appliances (Pellet stoves, pellet boilers, pellet furnaces, wood stoves, and wood boilers) with 75% or greater efficiency are eligible for a 26% federal tax credit. The tax credit may be claimed on the appliance itself as well as the sales tax, labor and installation costs, and any parts essential to the operation of the appliance, ex a hearth pad under a stove.
- The tax credit is calculated on the pre-rebate price.
- More information on eligibility is available on the Energy Star website.
- Up to $3000 voucher to purchase a pellet storage bin from a participating vendor - offered by the Clean Energy Development Fund
- Home Energy Loan from Efficiency Vermont and VSECU, Opportunities Credit Union, and NeighborWorks of Vermont - This loan offers income-eligible financing as low as 0% APR for 60 months. It is more accessible than traditional financing tools and can be used for small projects like a new pellet stove, or large projects like a weatherization project.
- Residential pellet boiler: A home owner has a pellet boiler installed for $24,000. It is eligible for the 26% federal tax credit, or $6240. It is also eligible for the $6000 rebate from Efficiency Vermont and CEDF. The net cost to the customer is $11,760. They choose to finance this with the Home Energy Loan at 0% APR for 60 months. Their monthly payment is $196.
- Woodstove Changeout: A home owner decides to upgrade their non-EPA certified wood stove to a new model. They select a stove with 76% efficiency, which makes it eligible for the 26% federal tax credit. Because they are turning in an old stove, they are also eligible for the $400 rebate from Efficiency Vermont. With delivery and installation, their new stove costs $2500. Less the $650 tax credit and $400 rebate their total net cost is $1450.
- Residential pellet furnace, converting from a coal furnace: A home owner who currently heats with a coal furnace decides to install a pellet furnace for $20,000. It is eligible for the 26% tax credit ($5200), the $3000 from Efficiency Vermont, the $3000 from CEDF, and the $7000 coal changeout adder from CEDF. This brings their net total to $1800.
- *Note*: These examples are for illustrative purposes only. Exact costs of appliances and installation will vary depending on exact unit selected and the circumstances of the installation.
Commercial & Institutional Rebates & Grants
Free Assessments for Small Businesses
FPR, in partnership with VEIC, is offering free assessments for Vermont small businesses interested in switching from fossil fuels for their heating needs to Advanced Wood Heat (AWH).
Energy experts at VEIC will analyze fuel usage data provided by each business and basic information about the businesses, including their functions, needs, and location to determine whether AWH is a good fit. If so, they will then determine the potential upfront costs and long-term savings. Businesses that appear to be good candidates to make the switch to AWH will then have the opportunity to participate in a more technical, no-cost follow-up assessment.
To be considered for participation in the program, businesses should complete this short intake form. For more information, contact Adam Sherman at VEIC at email@example.com.
- $6000 Flat rate incentive for commercial buildings up to 5000 sq. ft. from Efficiency Vermont and CEDF
- Custom Incentive for buildings over 5000 sq. ft., contact Efficiency Vermont
- Vermont Schools: Funding up to $25,000 for wood heat. For Vermont schools looking to repair, replace, or install a wood heating system limited funds are available on a first-come, first-serve basis. This program is a 50% cost share up to $25,000/school. Reach out to Paul.Frederick@vermont.gov for more information.
- USDA Rural Energy for America: Grants and loans to farms and small businesses
- USDA Community Facilities Direct Loan and Grant Program: Grants and loans to schools, town offices, libraries, fire stations, etc
- USFS Wood Innovations Grants: Grants primarily support businesses that grow the wood utilization market (e.g. pellet mill, wood based insulation) but also wood heating equipment
- Vermont Working Lands Enterprise Initiative Grants: Grants for Vermont's ag and forestry related businesses
US Forest Service - Wood Energy Technical Assistance
The USFS Wood Energy Technical Assistance Program offers targeted technical assistance to move clean and efficient thermal and CHP projects from concept to the point where the owner can move forward with implementation, and to ensure implemented projects provide successful models for future projects. The technical assistance provided is flexible in scope to meet the unique needs of each project. The following are potential examples of assistance that may be provided, and the scope will be tailored to each project as determined to be appropriate by the USFS:
- initial screening;
- feasibility study;
- operational troubleshooting;
- energy / emissions metering;
- data analysis on existing wood energy systems to document and improve their performance;
- and general technical assistance targeted to help move projects or state and local programs forward (presentations to Boards, provision of information to regulatory agencies, etc.).
To request assistance complete this form and send it to Lew McCreery, at Lew.McCreery@usda.gov.
Coal Changeout Adder from CEDF
Coal Changeout Adder: combine with existing CEDF incentives to get up to 50% off the cost of a new heating system.
- Replace coal stove, furnace, or boiler with a pellet stove, furnace, or boiler
- Adder is up to $7,000 for residential and $27,000 for commercial projects
- Can be combined with other incentives
Vermont Sales and Use Tax Exemption:
Starting July 1, 2018, advanced wood heat boilers will qualify for a retail sales and use tax exemption. The exemption is on qualifying equipment and directly associated equipment must meet the following requirements: (A) installed as a primary central heating system; (B) rated as high-efficiency, meaning a higher heating value or gross calorific value of 85 percent or more; (C) containing at least one week fuel-storage, automated startup and shutdown, and fuel feed; and (D) meeting other efficiency and air emissions standards established by the Department of Environmental Conservation. On a typical residential sized boiler, this represents an estimated average savings of $900/boiler. This exemption sunsets in June 2023.