Federal Energy Tax Credit: Use It before You Lose It

By: Conrad Neuf , Contributing Writer
In: Old Houses, Old House Construction, Home Improvement Tips, Old House Musings, In The News

There are a number of old houses in my area that still rely on a single central source of heat during the winter, and mine is one of them. I’ve mentioned before that my old house has a large kerosene stove that sits in the middle of the first floor and supplies heat to the entire home. The heat circulates naturally through the first level and through a couple of grills and the stairway to the second floor.

Use the Energy Tax Credit Before It's Gone

Use the Energy Tax Credit Before It's Gone

I don’t know how old the stove is, but I’ve been here for 20 years and I’d guess the stove was in the home for at least 10 years before I arrived. I know that several years ago I was having a slight problem with its operation and a group on the Internet with a passion for antique heating stoves knew the model and were able to answer some of my questions, so it has evidently hit the ”classic” stage. The stove seems to just plug along year after year requiring only a little bit of annual cleaning and the outside tank to be filled several times each winter, but its days may be numbered.

The Federal Energy Tax Credit Expires Soon

Several weeks ago I wrote about the federal energy tax credit that expires December 31; but it wasn’t until this week that I realized what a really great deal it is, and it’s not likely to be extended. The tax credit will cover 30 percent up to a maximum of $1,500 for a wood stove, pellet stove, or fireplace insert that burns a biomass material at 75 percent efficiency or higher–and the credit can also cover installation costs. A number of different fuels can be classified as biomass, but wood pellets definitely caught my eye as I’ve been considering a pellet stove for a number of years.

Goodbye Oil Tank, Hello Energy Savings

Goodbye Oil Tank, Hello Energy Savings

According to a publication put out by the State of Massachusetts, using a ton of wood pellets is about the same as using 120 gallons of heating fuel. I use around 480 gallons of fuel each winter, and the US Energy Information Administration is showing that heating oil is at $2.99 per gallon as of November 1; that means that I could spend about $1,435 heating my home with kerosene this winter. Wood pellets look to be about $250 a ton right now and with a new pellet stove I’d spend about $1,000 for the same amount of heat. When I add that $435 in fuel savings to the $900 the government will cover on a $3000 pellet stove, saying goodbye to my old stove seems like a no-brainer. Actually taking advantage of the energy tax credit to improve your old house before it expires should be a no-brainer for anyone.


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  1. 5 Responses  to “Federal Energy Tax Credit: Use It before You Lose It”

  2. Evan
    Aug 29, 2011
    Taking advantage of the energy tax credit adds to the savings of the high efficiency of a pellet stove, which is also wonderful for the environment. @ Planting Oaks – While removing a pellet stove is a manageable task, calling on certified chimney professionals takes care of the job if you cannot find a hauling service to take it away.
  3. Frank
    Aug 29, 2011
    Pellet stoves are great. We have one in a little used ski cabin and it heats up the place quickly. If you can save some money and get a tax break, then why not?!
  4. Aug 29, 2011
    Hi Planting Oaks, I haven't gotten rid of it yet. When the time comes I was planning on putting an ad in the local newspaper offering to give it to anyone who came and picked it up. A lot of local homes here still use these types of tanks so I figured it might go fairly quickly. I also thought about calling to fuel company to see if they wanted it; I would think they probably rent or sell them. So you might try those avenues.
  5. Aug 29, 2011
    We've been researching wood pellet stoves as well to help heat our 1925 2-story home that had an oil furnace originally and then a 2-zone central HVAC/Heat Pump system put in sometime before we bought it. The oil furnace is gone, so we rely on the Heat Pump, which is neither very effective nor efficient below 30 degrees, which happens about 3-4 months of the year here in Virginia. Now I'm leaning towards a traditional wood stove as our supplemental heat because you need electricity for a pellet stove (what if the power goes out) and there are more moving parts to service on a pellet stove vs. a traditional wood stove, thus costing more for maintenance over the long haul. I'm willing to have the mess and work of a wood stove (my family had one when I was younger so I know what to expect) instead of a pellet for the above reasons, but that's just me.
  6. Aug 29, 2011
    How did you get rid of the fuel oil tank? We unfortunately forgot to ask our sellers to get rid of their defunct tank before we bought the house, and now have no idea what the proper procedure for disposing of it is. We can't exactly put it in the trunk and take it to the local hazardous materials day, which would be my first thought.