Tax Credit

There is a federal tax credit for biomass fuel stoves (used for heat or water heating) "placed in service" in 2009 and 2010 for 30% of the cost, up to $1,500. The stoves must have a thermal efficiency rating of at least 75% as measured using a lower heating value.

The law defines "biomass fuel" as any plant-derviced fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plant (including aquatic plants), grasses, residues, and fibers.

Here are some links for more details:
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
http://www.epa.gov/woodstoves/efficiently.html
http://energystar.custhelp.com/cgi-bin/energystar.cfg/php/enduser/std_adp.php?p_faqid=2873