S. 1345 — America's First Fuels Act

This section revises limitations under the energy efficient home improvement credit by (1) increasing the aggregate amount allowable for certain building envelope components described in clauses (i) and (ii) of IRC § 25C(d)(2)(A) (i.e., insulation and air sealing) to $2,000 (from $1,200), and (2) increasing the aggregate amount allowable for biomass stoves and boilers described in IRC § 25C(d)(2)(B) to $10,000 (from $2,000). The changes apply to property placed in service after December 31, 2025.

This section establishes an investment tax credit equal to 30% of the basis of open-loop biomass heating property placed in service during the taxable year (i.e., equipment using open-loop biomass—such as landfill gas, sewage gas, or agricultural waste—to produce thermal energy for space heating, hot water, air conditioning, or industrial process heat). Such property excludes boilers and furnaces unless they achieve at least 75% thermal efficiency, are installed indoors, operate at under 50 MMBtu scale, and include emissions controls such as electrostatic precipitators. The credit applies to periods after December 31, 2025, in taxable years ending after such date; incorporates rules limiting eligibility for tax-exempt bond-financed property and allowing progress expenditure claims; and includes conforming amendments to the list of section 46 credits, basis adjustment rules, and the table of sections.