Photo courtesy of New England Wood Pellet.
Renewable Energy with the Convenience of Fossil Fuel
It’s a scene you’ve undoubtedly witnessed many times: a fuel truck lumbers up to a house, the driver attaches a hose to the house’s fuel tank, several minutes go by while the fuel is transferred, then the driver tucks the bill inside the storm door and heads off to the next stop. No muss, no fuss.
Now picture that same scene again, only this time with a twist: the fuel being delivered is wood pellets. Increasingly, homeowners across the Northeast are doing just that – taking delivery of a locally produced, renewable source of energy, delivered right to their homes with the ease and convenience of oil and propane.
Pellet stoves have been common in the Northeast for decades, providing companion heat to woodstoves or even heating entire houses from furnaces in the basement. But the popularity of pellets has been limited by three things: the pellets have typically been sold in 40-pound bags that require hefting and handling, either by you or by a neighborhood teen coerced with cash; pellet stoves have needed to be refilled on a regular basis, making them impractical as a primary heat source when you’re away for the weekend or on vacation; and the capital cost of pellet systems for central heating have been much higher than the comparable systems running on heating oil or natural gas.
At least two of these problems have now been successfully addressed. Which brings up the question: has the age of convenient, renewable heat finally arrived?
Bulk Delivery Comes Of Age
“There isn’t a blank spot on the map of the entire Northeast where you can’t get bulk delivery of pellets from at least one manufacturer,” said Charlie Niebling, general manager of New England Wood Pellet, headquartered in Jaffrey, New Hampshire. “Pretty much the entire region is now served by at least two manufacturers, since besides our company [with mills in New Hampshire and New York] there are mills in Maine, Vermont, and Pennsylvania.”
Pellet delivery trucks are similar in size and shape to oil and propane delivery trucks, and from a distance, it’s hard to tell the difference. Mainly the hose is fatter, because the pellets are blown from the truck into a storage hopper. In some cases, the pellet manufacturers themselves make the deliveries directly to homeowners, and in others, independent fuel dealers (many of whom are also in the oil and propane business) handle the delivery.
“We now have redundancy in the marketplace,” added Niebling, “which is critical to consumer confidence.” Should supplies from one mill or one dealer be interrupted, homeowners can always call someone else, which has a stabilizing effect on both supply and prices.
And what about those prices? Pellets are now averaging $225 per ton delivered, a price that varies somewhat depending on your distance from the nearest mill. Assuming you use six tons of pellets to heat an average-sized house in an appliance that is 85 percent efficient, you’d spend $1,350 for the year. For comparison, that would be equivalent to about $2,600 worth of oil (750 gallons at $3.50/gallon) or $2,750 of propane (1,100 gallons at $2.50/gallon.) Pellets, it turns out, are half-price heat, trailing only cordwood as the least expensive way to heat your house.
Anatomy Of A Wood Pellet
Wood pellets, whether sold in bags or delivered by truck, are made by grinding wood into sawdust and then compressing that sawdust into uniformly sized pellets. No glue or other ingredients are used – the lignin in the wood becomes glue-like under pressure and holds the pellet together. A wood pellet, in other words, is just a chunk of firewood in different form, drier and more dense. A ton of wood pellets contains roughly the energy equivalent of a cord of firewood, depending on the species and moisture content of the firewood, but takes up only about half as much space.
Most pellets are made either from clean sawmill waste or from whole, debarked logs that are chipped especially for pellet making. Though many people think that pellets are made from waste wood, which is to say, tree tops and limbs left over on a logging job, this is generally not the case. Pellet manufacturers want to produce a fuel that leaves very little ash behind, and since bark and twigs contain many compounds besides cellulose and lignin, they are less desirable for making high-quality pellets because they produce more ashes.
From an ecological perspective, using low-grade logs for pellets is better than using limbs and tops, because leaving limbs and tops in the woods ensures that most of the nutrients in a tree remain in the forest. Using logs instead of limbs is also better economically because it provides a market for low-grade logs that are not otherwise suitable for furniture or other high-end uses. If landowners and land managers have good markets for the less-valuable logs, they are more likely to manage the forest in a balanced way and not just use a “cut the best, leave the rest” approach that depletes the forest over time.
There are many brands of pellets on the market and, if you take a few moments peruse the Internet, endless discussion about hardwood versus softwood pellets and East Coast versus West Coast manufacturers. Most of the pellets produced in the Northeast are comprised primarily of hardwood, since that is the forest that commonly grows here. Whether hard or soft, all of the wood is dried and compressed, meaning that most any pellet is suitable for most any application, provided the source material is clean and that the manufacturer is reputable. Softwood contains more resin than hardwood, so pure softwood pellets will burn hotter and faster and produce more ash than pure hardwood pellets. Most manufacturers use a blend of the two to capture some of the benefits of both.
Is There Enough Wood To Go Around?
In 2010, New England and New York burned about eight million green tons of wood for biomass of all types, including wood pellets, firewood, and wood chips. That same year, our forests generated about 55 million green tons of new growth. In a report titled “Heating the Northeast with Renewable Biomass: A Vision for 2025,” the Biomass Thermal Energy Council (BTEC), a pro-biomass lobbying group, found that of the 55 million tons of annual growth, 17 million tons were in no-cut reserves or were otherwise unsuitable or unavailable for harvesting, 15 million were cut for pulp and paper, 8 million were cut for sawlogs, 8 million were cut for biomass, and 7 million were available for harvesting but weren’t cut.
While different people have different ideas about how our forests should be managed, it’s clear that there is a fair bit of additional wood that could be harvested, without cutting more than is growing each year, and without logging in wilderness areas or other lands that are currently off limits. If you added the 7 million tons of uncut new growth to the 8 million tons that are currently cut for biomass, you’d nearly double the amount of wood available for wood pellets, firewood, and chips without depleting the forest.
Looking ahead, if the pulp and paper industries continue to decline as their manufacturing moves offshore, and if you move half of their 17 million tons of green wood to the biomass column, you will have tripled the supply of wood available for heating, again staying well below the annual growth. The amount of the region’s heat that comes from wood would rise from 4 to 12 percent. While these estimates depend on many factors, such as paper-making economics and the attitudes of private landowners (who own the majority of the wood in the Northeast) toward timber harvesting on their lands, it is safe to say that pellet use could greatly increase without any major change in our current harvesting levels.
A Typical Pellet System
Scott Nichols owns Tarm Biomass in Lyme, New Hampshire, which has been selling and installing wood- and pellet-burning central heating systems since the early 1980s. “You don’t need a woodshed for pellets,” he says, “but you do need a silo or a bin in the basement” to take advantage of bulk delivery. The silo looks like a typical silver-colored grain silo and is most often used in commercial applications. For homeowners seeking a less industrial look, cloth bags that hold 5 tons or more and sit in a wooden cradle can be installed in most basements, with just a hose leading outside for filling. “The truck pulls up, and the delivery itself is pretty boring,” said Nichols.
In addition to the fuel bin or silo, you need the boiler and an auger or vacuum system for moving the pellets from the hopper into the boiler. Nichols recommends installing a hot-water storage tank so that the boiler heats the tank and the tank heats the house. “Thermal storage reduces cycling of the boiler [turning on and off] and improves the exhaust emissions,” he added, though quickly noting that pellet systems exceed all EPA standards, even without the storage tank. “It’s more a question of burning the pellets as cleanly and efficiently as technology allows.”
As with fossil-fuel boilers, pellet systems need to be checked and cleaned once per year. On top of that, the homeowner needs to empty the ash drawer every two to four months, depending on heat load and the type of pellets burned. Compared with a woodstove or even a gasifying boiler, the ash buildup is minimal.
All in, with the boiler, the hopper, the auger, and the storage tank, the total system cost can reach $20,000, with installation on top of that. Eliminating the storage tank might save $3,000-$5,000, but even so, the capital costs of installing a pellet-burning system are formidable. Figure on $15,000 to $25,000 for everything.
A typical system for burning propane or heating oil might cost around $5,000, plus a thousand or more for installation. And now you know why, even though pellets cost only half as much as fossil fuel, the technology has yet to take off. The breakeven point for a typical homeowner is at least 10 years.
“We’re getting to this critical mass where people know about pellets, and they want pellets, but when they see the cost [of installation], they’re not so sure,” said Nichols.
Charlie Niebling of New England Wood Pellet agrees: “The capital cost is the tough nut. The companies that want to make pellets happen are really thinking creatively about how to make it happen, because if you can address the higher capital costs, there’s a very compelling return on investment. The fuel price is so much lower.”
New Hampshire launched a boiler rebate program in 2010 for the lesser of either $6,000 or 30 percent of the installed price and quickly received more applicants than they had funding available for. The program was extended into early 2012 and may be extended again. The issue for the state is simple economics: New Hampshire businesses and homeowners ship more than a billion dollars out of the state each year buying heating oil. If even a fraction of that could be redirected to locally produced wood pellets, the economic impact would be enormous. “Pellets play a double role – not only through equipment sales but also on the fuel-savings side, which will, in the long run, be more important to the New Hampshire economy,” Nichols said.
Vermont currently offers a $1,000 rebate, and both New York and Massachusetts are working on programs of their own. The Federal government offers a $300 tax credit.
The bigger breakthrough may be that a number of Northeast states are in the process of adopting PACE programs, which stands for Property Assessed Clean Energy. A homeowner takes out a loan for a pellet system (or other clean-energy improvement) and repays the loan along with their annual property tax payments. The PACE loan runs with the house, not the owner, so the payback is enjoyed even if the house is sold along the way, a major benefit in a country where a typical family moves every five years. Meantime, the pellet system is net cash positive from year one because the fuel savings are greater than the loan repayment.
Who Are The Customers?
The prime mover right now is economics,” said Nichols. “The more oil you burn, the faster you repay your equipment costs. Most of our customers are commercial building owners, or owners of large homes, or people who are able to make the investment.”
The lack of basic awareness among consumers is also an issue, Niebling said. “People simply don’t know that the bulk delivery option exists. And the companies trying to develop this market are small and undercapitalized and not flush in marketing dollars.” Both men agree that the typical pellet customer these days is motivated by more than the cost of fuel, be it concern about climate change or a desire to keep their money within the local economy. Throw in a handful of aging woodchucks grown tired of feeding the woodstove, and you have a cross-section of the customer base.
But there is an example of a place where that cross-section includes a much larger slice of the population. Finland has a population similar to that of the Northern Forest region, a long tradition of forest-products utilization, 90 percent of the land in forest cover, and no domestic source of fossil fuel. The Scandinavian country is in much the same boat we are in when it comes to energy.
Ten years ago, 400 households were heated by wood pellets in Finland. Today that number is 25,000 and growing rapidly. Pellet systems are still dwarfed by the number of homes heated by solid-wood boilers or wood-fired district heating systems that supply whole villages, but bulk-supplied pellet systems have become the go-to choice for replacing oil-fired furnaces and boilers in Finnish homes, many of which were installed in the aftermath of World War II and are now wearing out.
Finland does not subsidize pellet systems but does tax carbon emissions, and the nation is party to the renewable energy goals set by the European Union. But while their economic environment may be different, their logistical environment is similar and demonstrates that wood pellets have the capacity to work on a large scale.
It Takes A Village
Beyond the economics, there is a barrier to the widespread use of pellets here in the Northeast, and it is significant: social acceptance. Few people want to be the first ones on their block to try something new, and fewer want to run the risk of making a significant investment in a heating system that turns out to have been a mistake.
“The first five homeowners who came into our program came reluctantly, even though there were very generous subsidies that basically covered the full cost of the boilers,” says Mike Wilson, senior program manager at the Northern Forest Center, a non-profit based in Concord, New Hampshire, that promotes long-term stewardship of the Northern Forest through sustainable economic development. “There was very high wariness – people felt that this was a brand new technology. They wondered if they could get pellets, and they wondered whether there was someone who could fix it if it went down.”
Wilson’s group, in collaboration with Maine Energy Systems (a supplier of both boilers and pellets) and the Berlin Better Buildings energy efficiency program, launched the Model Neighborhood Project in Berlin, New Hampshire. The goal of the project is to foster a community where pellet heat is the norm and not the exception.
Seventeen bulk-supplied pellet systems have been installed in Berlin homes as of August, with 13 more in the works and an overall goal of 40. Several public buildings and community facilities are being retrofitted as well. “Right now we have a waiting list,” Wilson says. “People in town know someone who has a pellet system, and they want one, too. It’s been really interesting: the project has completely changed the receptivity to these systems. At least at a local level, we’ve seen that the development of even a small reference population can have a huge effect on getting people over the psychological barrier.”
People who want to see how the systems are performing can view live data on the Northern Forest Center’s website, which tracks both individual homes and how much Berlin is saving as a community.
Once the Berlin project is up and running, Wilson’s goal is to create a Model Neighborhood Project in each of the four Northern Forest states. The theory is that the biggest reason so few people heat their homes with pellets is that so few people heat their homes with pellets. Achieving a critical mass of pellet users is the key, both logistically and psychologically.
“The switch to a high-efficiency pellet system provides benefits on many levels,” said Wilson. “It saves homeowners money. It helps support demand for low-grade wood and good landowner management. It reduces greenhouse gas emissions. And, fundamentally, it keeps 100 percent of our heating dollars circulating in the local economies of the Northern Forest states. And that’s when we start to see the full benefits of pellet heat accruing.”
Chuck Wooster is a farmer and writer in White River Junction, Vermont, and a frequent contributor to Northern Woodlands.