For the last few years New Hampshire has used money from the Renewable Energy Fund to help with the costs of wood pellet furnaces and boilers.
The incentives are aimed at promoting sustainable energy use and getting rid of dirty old wood stoves. which can pose health risks.
But Amanda Noonan of the Public Utilities Commission says as the cost of other energy sources has fallen, so has interest in the program.
"There had been a decline in the number of applications that had come in," Noonan says, adding the PUC decided "it would be appropriate for the Commission to look at modifying the program to provide additional incentives."
Going forward the state will cover 40 percent of the costs of wood-pellet furnaces or boilers, up to $10,000 for residential use or $65,000 for commercial or industrial use.
Previously the state offered incentives of 30 percent with lower maximum rebates.
The PUC is also tightening the emissions standards for which systems qualify for the incentives.