In the past week I've seen two great articles about heating your home with Wood Pellets and a pellet stove.  The first was in October's issue of Consumer Reports, which has a great section on energy efficiency for the home and a section on pellet stoves.  They also have a good pellet and wood-burning stove buyer's guide on their website.  The second was on the Green Tech portion of CNET's blog covering Woodpellets.com, which is home delivering wood pellets (although it seems to a small geographic area - I'm guessing the North-East since the company is based in New Hampshire).

First, let's look at the basics of heating your home with wood pellets and a pellet stove.  For another overview, check out Hometips.com, which has a nice section on how a pellet stove works.  Pellets are usually made from compressed sawdust that look (and probably taste) a lot like gerbil food.  You put them into the pellet hopper built into the stove.  An electrically powered auger  transfers the pellets into a burner, which burns them to produce heat.  One fan moves air through the burner chamber to provide oxygen to the flames and exhaust the gases while another fan blows the heated air into your home.  Basically, it is a fireplace that uses really, really tiny logs.

The great news about pellet stoves is that they are eligible for the 30% Federal Tax credit on the installed cost as long as the thermal efficiency is greater than 75%.  If you need an overview of Tax Credits check out the blog here. While the stoves usually are under $3,000 it may cost another $1,000 to have it professionally installed.

Now to some of the bad news. Drawbacks are as follows:

• constantly toting around the 40 lb. bags of wood pellets to feed the beast
• emptying the ash pan on a regular basis
• higher particulate matter than natural gas and oil
• cleaning the glass if you want to see the flame
• maintaining heat exchanger and exhaust vent
• pellet stove is a space heater, not a whole home solution
• may need a building permit to install
• internal fans use up to 100 kWh of electricity a month!
• sound of fans and pellets in stove may get annoying
• wood pellets may not be easy to get in your area

Consumer Reports  says that burning pellets costs roughly 15% less than heating oil and 40% less than electricity, BUT 25% more than natural gas.  Of course all of these heating sources (including wood pellets) will fluctuate over time, so these price differences will always be in flux.

In regards to the pellet stove payback, there are some differing figures on this.  Again, it depends on the price of fuel and how much the installed cost is, but while Consumer Reports says the payback could be decades, woodpellets.com (which may be biased :) ) says the payback is  a mere two to five years.  Obviously, it depends on your situation and what fuel you are currently using to heat your home.

To me, pellet stoves look like they have a very small niche.  If your heating costs are currently high (i.e. you are using heating oil) and you enjoy seeing  a flame, then it may be a worthwhile investment.  However, I wouldn't recommend them for that many people, especially if you currently heat your home with natural gas.  The biggest drawback I see is that the particulate emissions are higher than oil and natural gas.  Since many cities already have poor air quality, I certainly wouldnt want to install a heating system that makes it any worse.  Now, if I had a cabin I needed to heat, then a pellet stove would look like a great solution.  For my geographic location (Atlanta, GA) I have other energy efficient improvements that would produce a greater environmental benefit and a greater return on my investment, but that's just me.

What are your thoughts on the pellet stove?