Subsidies for purchasing a wood stove may include federal tax credits, state energy efficiency programs, and local incentives aimed at promoting renewable energy use.
Upgrading to an efficient wood stove can cut heating costs while reducing emissions. Federal tax credits and state rebates now make these upgrades more affordable than ever. This guide covers all available subsidies for wood stove purchases.
Federal Tax Credits for Wood Stoves
The U.S. government offers a 30% tax credit (up to $2,000 annually) for qualifying biomass stoves purchased between 2023-2032. To qualify:
- Stove must have ≥75% thermal efficiency rating
- Must be installed in your primary residence (renters may qualify)
- Must be EPA-certified
This credit combines with other energy efficiency upgrades. For example, you could claim $2,000 for a wood stove plus $1,200 for insulation in the same year.
How to Claim the Credit
File IRS Form 5695 with your tax return. Keep receipts and the manufacturer’s certification statement. The credit is non-refundable but carries forward to future years.
California Woodsmoke Reduction Program
California offers the nation’s most generous wood stove subsidies through its Woodsmoke Reduction Program:
| Incentive Type | Old Amount | New Amount (2025) |
|---|---|---|
| Electric Heat Pump | $10,000 | $12,000 |
| EPA-Certified Wood/Pellet Stove | $5,000 | $7,000 |
Low-income households in disadvantaged communities qualify for maximum incentives. The program prioritizes replacing uncertified stoves used as primary heat sources.
Eligibility Requirements
- Must replace uncertified wood stove (check EPA historical lists)
- New stove must be professionally installed
- Must complete fuel storage/maintenance training
Other State & Local Programs
Many states and utilities offer additional incentives:
Oregon
The Wood Stove Changeout Program provides $1,500-$3,000 rebates for replacing old stoves with EPA-certified models.
Washington
Some counties offer $1,000-$2,000 rebates. The Clean Air Agency runs periodic changeout programs.
Montana
Offers tax credits up to $500 for efficient wood stove purchases through the Alternative Energy Investment Tax Credit.
Maximizing Your Savings
Combine multiple incentives for maximum savings:
- First claim state/local rebates (often paid immediately)
- Then claim federal tax credit (30% of remaining cost)
- Some utilities offer additional rebates – check with your provider
Example: A $4,000 stove installation in California could receive $3,700 total support ($2,000 state rebate + 30% federal credit on remaining $2,000 = $600).
Choosing an Eligible Stove
Look for these certifications:
- EPA 2020 Certified (most stringent standard)
- 75%+ efficiency rating
- Qualified for your state’s program (if applicable)
Many modern stoves qualify for multiple programs. Consider pellet stoves which often qualify for higher rebates than wood models.
Installation Requirements
Most programs require professional installation by:
- Licensed HVAC technicians
- NFI-certified professionals
- CSIA-certified chimney sweeps
Proper installation ensures safety and maintains warranty coverage. Many programs verify installation before paying rebates.
