Should You Buy a Pellet Stove?

Homeowners using heating oil are likely to pay 31% more this year than last, while those using natural gas can expect to pay 46% more, according the U.S. Energy Information Administration, or EIA. (For more, see "Home Heating Costs Soar.")

With prices reaching such staggering heights, many Americans are searching for alternative ways to heat their homes and cut their bills. One option: a pellet stove.

Pellet stoves are similar to wood-burning stoves. Instead of logs, they burn pellets made from compacted sawdust, wood chips, bark and other organic materials. A standalone stove or an insert placed into a fireplace can provide heat for an open space as large as 1,500 to 1,800 square feet. Unlike a typical gas or oil heating system, which has pipes or ductwork throughout a house, a pellet stove typically heats only one room, unless a fan is used to force warm air into adjacent rooms, according to the U.S. Department of Energy.

Some 600,000 homeowners across the country use pellet stoves to help heat their homes. And as heating oil and natural gas prices rise, demand for these appliances is increasing. Stove shipments increased a whopping 59% during the second quarter of 2005 vs. the same period a year ago, says Leslie Wheeler, director of communications for the Hearth, Patio, & Barbecue Association. And the second half of the year tends to be a busier buying season than the first half.

Cost Savings
Heating with pellets is quite economical compared with oil and natural gas. On the Sam's Club web site, pellets sell for about $187 a ton. The Department of Energy says a homeowner can expect to go through up to three tons of pellets a season, or $560 worth. In contrast, heating oil will likely cost owners of bigger homes in the Northeast several thousand dollars this winter.

Of course, most homeowners will still need to use their traditional furnace for supplemental heat, says Wheeler of the Hearth, Patio, & Barbecue Association. If you use your appliance in, say, the living room, you'll still need a furnace for the other parts of the house. How much that'll cost will depend on the size of your home, its layout and how toasty you like to keep it.

Keep in mind that the stoves themselves aren't cheap. They typically run between $1,700 and $3,000, depending on the size and features. And many buyers also pay for installation, since pellet stoves need to be vented to the outside. (If you already have a fireplace, however, you could buy a pellet stove insert and use the chimney.) The savings, in other words, won't come during the first year.

The Hassle Factor
Prepare yourself for some manual labor. A homeowner who runs his stove 24 hours a day will need to fill the appliance with pellets once a day and clean out its ash once a week.

You'll also need a large enough space to store roughly 150 40-pound bags of pellets. With more people buying stoves this year, there could be a shortage of pellets by the end of the season, says Wheeler. She recommends homeowners buy enough for the entire season in October, before the supply becomes scarce. "The last thing you want to do is run out of pellets by February or March and find the shelves at your local Wal-Mart (WMT) empty," she says.