TOWER — The abrupt cancellation of a 30-percent tax credit for the purchase of efficient and clean-burning wood furnaces has prompted a boom in sales for Lamppa Manufacturing, whose Kuuma VaporFire 100 is one of only a handful of wood furnaces that can legally be sold in the U.S.
But company CEO Garrett Lamppa said the sudden boom is likely to come to a screeching halt when the tax credit expires on Dec. 31. The tax credit was originally set to phase out in 2030, but the Trump administration has moved to cancel it earlier as part of its effort to limit growth in the renewable energy sector.
The pending deadline has put many wood furnace users in the market for a new unit this year.
“We’re very busy,” said Lamppa. “We’ve definitely had an influx of orders for furnaces, and that’s significantly tied to the end of the tax credit.”
Lamppa Manufacturing is probably best known for its popular Kuuma sauna stoves, which make up the bulk of the company’s sales. With the increasing popularity of sauna for its notable health benefits, sales of the sauna stoves have been brisk for some time. Sales of those stoves aren’t subject to the tax credit and won’t be affected by its imminent cancelation.
While the influx of business has been a nice boost for company sales, Lamppa said it creates issues with his workforce. While he’s needed to bring on a couple of new workers recently to help get the additional orders built and out the door for delivery, he said he can’t guarantee there will be nearly as much work once the credit ends.
“I wish we could rely on it being like this all the time,” he said.
The situation is also complicating his ordering of materials, given the uncertainty over demand for furnaces come the end of the year. Steel prices have been high, and Lamppa doesn’t want to be stuck with too much inventory if sales slump later this year. Lamppa Manufacturing does have one advantage over other wood stove manufacturers because their material sources are mostly all domestic, so they aren’t dealing with the added uncertainty of the high tariffs. Other manufacturers, which have traditionally imported many of their materials, have been hit with the double whammy of the loss of the tax credit on top of the impact from tariffs.
The anticipated slowdown from the end of the tax credit could come well before the end of the year, acknowledges Lamppa. The several-week lead times needed to build furnaces means that buyers hoping to take advantage of the tax credit will need to get their orders in within the next few weeks.
“I don’t know if we’ll even be able to take orders all the way through October,” Lamppa said.
The tax credit equals 30 percent of the cost of the wood furnace, or $2,000, whichever is less. Furnaces are supposed to be purchased, delivered, and installed by the end of the year if homeowners hope to take advantage of the tax credit.