What's your cutoff point?

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Monadian

New Member
Dec 11, 2008
1
Central NY
I'm amazed at how expensive pellets have gotten. 2 years ago they were just over $200 a ton in my area. I jumped on the pellet stove bandwagon because it was green technology and much more cost effective than fuel oil. With fuel oil coming down and pellets going through the roof, I decided to figure what the cut-off point would be where it doesn't make fiscal sense to keep burning pellets.

So I figured 5 tons of pellets to heat my house for the season, versus 3 tanks of fuel oil. At $300/ton plus delivery costs, that's at minimum $1500. Doing the math, that means if fuel oil gets below $2.44/gal, the only reason I'll be firing up my pellet stove is because I enjoy the ambience on the weekends.

Of course it's nice to have the alternative heat source, but unfortunately I don't have the luxury of burning pellets just because I like the looks. I need to keep my family warm and save money.

Is anyone else as frustrated with this as I am? Do you find yourself going back to fossil fuels if the price of pellets gets too high? At what point do you say "to hell with pellets"? $350? $400?
 
We've beat this drum pretty loud in a few threads now. Fuel oil in my area of central Mass is $2.17/gal, I think my break-even point is probably $2.40/gal?
I have no problem turning up the furnace when I come downstairs in the morning.
Pellets will drop when dealers get tired of sitting on them. They're $200/ton in Oregon. My pellets came from B.C...and they were $340.

Jim
 
The bigger issue for me is that I have all the pellets I need for the winter already on hand. It's kind of like locking in an oil contract.

So there really isn't a cutoff for me, the pellets are already purchased. I'm concerned about them degrading too much if they set until next year.
 
Where are they "tucked away"?...Mine are in the garage, and will stay there. I still burn some, but I'm not interested in spending MORE money to heat my house.
I'm also not interested in buying more pellets at this point.

If they're in a basement?...where it's nice and dry?...they should keep just fine.

Jim
 
I have 1 1/2 ton in the garage and 4 ton in various outside storage sheds. None of them are getting rained on, but they are open to outside air. This is my first year with pellets, so I don't want to chance ruining 4 ton because of a total of $200 throughout the winter.
 
the stock piles of pellets in the spring will bring the prices down i believe, most people bought enough for 2 yrs up here. which created the inflated prices.
 
Fuel oil (and LP gas in my case) prices will go back up soon enough. You can count on it. I'm in with the pellet stove for the long haul.
 
I have started using both. The programmable thermostat gives the house an early morning blast of oil heat and a late afternoon blast. At .85 gph x 2 hours = $3.68. My pellet use has dropped from 1 1/2 bags to 3/4 bag per day. I am obviously at my break even and the house is a lot more comfortable. $7 per day total to heat the house and hot water is quite acceptable to me.
 
I use Kerosene. Currently it is still roughly $3.00 a gallon here. Pellets this year when I purchased were $230.00 per ton. Kerosene would have to go to about $230.00 per gallon for me to effectively use it...it's not going to happen. Soooooooooooo pellets are it!
 
I bought 5 gallons of kerosene last week to fill my bullet heater and it cost me $6.25 per gallon. Wish I could find it cheaper in southern MA - Milford area.

Steve
 
I don't know where you are getting your figures from but here is how it looks to me.

Most of you guys have wood pellet stoves. Thats a whole different kind of heat than say, hot water baseboard. The room where the stove is located will have the most heat and that also tends to be where the family is centered. With HBB you are heating the whole house equally and that will also use more fuel.

Now as far as compairing oil to pellet fuel, A friend of mine that has a large house and a three car garage and heats it all. I 2006 he burned $5,000. worth of oil when Oil was selling for around $2.50/ gal.

In 2007 he went to a pellet boiler and paid $275./ ton which was high for 2007 but he said he tried some Wal-Mart pellets and thought they were junk so went back to the high priced ones.

Anyway He said cut his heat bill to about $2,500.00 using the wood pellet boiler. That means oil would have to sell at $1.25/ gal to be the same as wood pellets at $275/ ton.

That may sound low to some of you. I myself would never switch back to oil but if your just interested in the cost part of it $2.40 a gal for oil sure ain't no bargin.
 
No way would I pay $300+ for pellets (in today's dollars). I bought 5 tons @ $205 delivered this year only because oil at the time was $3.75+. I've burned pellets on and off for the last 8 years, but only when it was cheaper to burn pellets by a significant margin. If the price is close, it's not worth my time hauling bags, cleaning the stove, and dealing with the cold areas in the house if it's not going to pay off. I love my stove(s), but I don't like being forced to huddle around the warm spot(s) in the house. If I didn't want or need the extra rooms in my house, I wouldn't have bought it...

Regarding sitting on the pellets, I just finished burning pellets that had been sitting in the damp corner of my basement for the last 7 years. Yes, 7 years, and they burned fine. Right now I'm burning pellets again until I get a good feel for what my actual NG price per therm will be (I just converted over to NG from from oil). I've only used a little bit of gas just to see how the NG pricing/billing works. If I find NG is cheaper, I'll shut down the stove until it's economically feasible for me to turn it back on. If I were still on oil, my stove would be shut down as local oil prices are around $2.10.

I'm going to continue to test the waters for this season (with DHW as well), but going forward I'll likely burn a lot more wood as it's still by far my cheapest option. If I see pellet prices below $200 this spring, I might buy some more, but I most certainly will not pay over $225/ton for them. My guess is the pellet producers are going to have a hard time moving pellets after this season, so I expect prices to drop significantly from the over inflated prices we are seeing today.

Just my 2 cents...
 
Rich said:
I don't know where you are getting your figures from but here is how it looks to me...


Now as far as compairing oil to pellet fuel, A friend of mine that has a large house and a three car garage and heats it all. I 2006 he burned $5,000. worth of oil when Oil was selling for around $2.50/ gal.

In 2007 he went to a pellet boiler and paid $275./ ton which was high for 2007 but he said he tried some Wal-Mart pellets and thought they were junk so went back to the high priced ones.

Anyway He said cut his heat bill to about $2,500.00 using the wood pellet boiler. That means oil would have to sell at $1.25/ gal to be the same as wood pellets at $275/ ton.
That may sound low to some of you. I myself would never switch back to oil but if your just interested in the cost part of it $2.40 a gal for oil sure ain't no bargin.

More magic pellets hard at work! Anyone want to buy a bridge?
 
I have done a lot of calculation to find my break even point. In the end I believe this quote from the Webmaster to be the simplest requiring little calculation.

"$300 pellets = $3.00 oil, etc.....that leaves a little slop to amortize the stove...but just a little."
 
my break even point based on what I actually paid for pellets against what I would use in oil for heat is $2.15 a gallon, but what I find interesting, here is the number of people who apparently bought a $3000.00 appliance with the idea that they would see immediate savings. Before I bought the stove, my calculations conservatively were that I would save about $400.00 a year in fuel cost. As it happens, I saved considerably more last season. It remains to be seen what happens this year.

At that rate of savings it would take me 7 to 10 years to pay for the stove. If oil happens to get very high & pellets stay somewhat reasonable (& $300 a ton is very reasonable against $4.00 plus oil), I may pay for the stove sooner, however, we did not buy the stove to save money. We bought it because we:

1. Wanted a fireplace & prefer the heat from the stove to the baseboard heat - I had been looking at propane stoves for a year before I bought the pellet stove.
2. Pellets are renewable energy. Oil is not. At some point oil has to go up. As oil reserves are depleted it becomes more & more expensive to drill (as you need to go deeper, pulling tar oil etc). There may well be a lot of oil left to tap, but there are not a whole lot of reserves that will be as inexpensive to drill as those in Iraq & Saudi Arabia.
3. I wanted a secondary heat source in case there are shortages of oil. This may sound paranoid, but remember, there were places in this country where there were gas shortages this fall.

One additional point. Having two heat sources gives me flexibility to buy both fuels at the best possible price. I bought 125 gallons of oil at just over $3.00 early in the season & another 100 gallons at $2.16 recently. Were I burning oil, exclusively, I'd have bought 250 gallons at $3.00 plus & taken an additional delivery (say 80 gallons) in the mid twos before oil came down to $2.16. Today the lowest price for oil in southern Maine is $1.88. That would work out for me wonderfully if I had 3 275 gallon oil tanks & could empty all three of them just in time to hit the lowest price.
 
Im with kofkorn I have my pellet supply for the year (I hope) I just bought my stove this spring for 2500 plus 750 for 3 ton of pellets plus 600 for install for a grand total of 3850. My hot water is propain and oil forced hot air I get both from eastern oil&propane;my budget price was 475 a month for 10 months for a grand total of 4750.I Have full tank of oil from last year when I drove for an oil company they gave us a good discount and am in the process of coverting over to electric for hot water.btw oil out here is 2.399 a gallon propain is 3.599 for me because I just use it for HW.So Im sticking with pellets.They heat my entire 1300 square foot house.
 
I agree with part of what you mention.
I installed a pellet stove because we've always had a woodstove. That stove got removed as part of a remodeling project.
I always like having one place you can go when you come in from the cold outside and GET WARM. If oil had gone to $5/gal?...then I'd be saving money too. Yay me.
But I'm certainly not going to do everything possible to burn ONLY pellets or as little oil as possible when oil is cheaper for me to use than pellets.

Another point that people seem to omit from their investment "break-even" calculations is the added value to the home. Granted that wont be realized until the home is sold, but it's still a value-add.

Jim
 
Weeds said:
Fuel oil (and LP gas in my case) prices will go back up soon enough. You can count on it. I'm in with the pellet stove for the long haul.

Ditto that. Propane here is not even close, but the tank is full "just in case".

If I never light that pilot again, it will be too soon.
 
The American way of the past has been; who cares about the local economy, pollution, buying fuel where 85% of every dollar leaves America and goes overseas to people who hate us, ignoring global warming, etc. etc.

I just heard that SUV's were the fastest selling sector of the car market last month. So I guess there are a lot of people out there that are just not going to get it until their hit over the head with a bat.

But more and more of us are starting to realize that if the billions spent on fuel stays in the area will find it's way back to us in one way or the other. Loggers, truckers, pellet plant workers, bag manufacture workers, delivery drivers, the list goes on and on will all need cloths and housing and barbers and cars and dentists and doctors and the list goes on and on.

Or we can send our money to Kuwait, borrow more from China and put more toxic fumes into the air.

I guess this is a hard decision for some people, Where's that bat when I need it.
 
Rich said:
I just heard that SUV's were the fastest selling sector of the car market last month. So I guess there are a lot of people out there that are just not going to get it until their hit over the head with a bat.
That's not quite as bad as it sounds...kind of like being the best cliff diver in Nebraska - it doesn't take much to have been the fastest selling sector. A lot of the buying that is going on (and there's not a lot for any manufacturer), is from need-based buyers -- businesses, people using them for work, etc. where it's not necessarily a discretionary purchase and those folks disproportionately need the room or the cargo capacity of an SUV. Add in the fact that SUVs are being marked down 20 or 30% or even 40% over the sticker, and you've got a scenario where it makes sense to buy the fuel hungry SUV over the gas sipping compact ---- the 15 or $20,000 saved can buy an awful lot of gas even at $10/gallon.
 
Rich said:
The American way of the past has been; who cares about the local economy, pollution, buying fuel where 85% of every dollar leaves America and goes overseas to people who hate us, ignoring global warming, etc. etc.

I just heard that SUV's were the fastest selling sector of the car market last month. So I guess there are a lot of people out there that are just not going to get it until their hit over the head with a bat.

But more and more of us are starting to realize that if the billions spent on fuel stays in the area will find it's way back to us in one way or the other. Loggers, truckers, pellet plant workers, bag manufacture workers, delivery drivers, the list goes on and on will all need cloths and housing and barbers and cars and dentists and doctors and the list goes on and on.

Or we can send our money to Kuwait, borrow more from China and put more toxic fumes into the air.

I guess this is a hard decision for some people, Where's that bat when I need it.

There are several schools of thought in this arena. I might catch hell for mine. I drive an SUV... it's a Toyota RAV4 (4cyl) & has the best fuel economy rating in its class. I drove a Pontiac Bonneville for 10 years before the RAV4. Inside of the warranty period for that Bonneville it had more visits to the dealer for exhaust manifold issues than oil changes it needed. Granted, I ended up with an entire new exhaust system at 35,500 miles (under warranty/no cost to me). I've had the RAV4 since 6/2006 and it just had its first repair under warranty this week ( yesterday, in fact), which was a steering column joint. That Bonneville's window price was $26,000 brand new in 1996... the RAV4's window price was $23,500. Quality & reliability is what I was shopping for in 2006. Why do you think I bought a Toyota? The money has WAY more value in MY pocket than in the pocket of GM or after-market GM parts manufacturers. Make a product that's worth the money and people will spend.

By the way, I'm typing this on a MAC....Rich, American made APPLE. I'll spend my money where it's going to benefit me over longevity on products known for reliability. When American employees want to stay working instead of filing workman's comp claims because they slipped on the ice in their own driveways, when Unions can stop protecting this kind of employee and when American companies can stand behind their product, I'll spend my money in America. And as long as I have a choice, I'll burn whatever fuel saves ME money and continue to thank God that I'm fortunate enough to have a choice.
 
wilbilt said:
Weeds said:
Fuel oil (and LP gas in my case) prices will go back up soon enough. You can count on it. I'm in with the pellet stove for the long haul.

Ditto that. Propane here is not even close, but the tank is full "just in case".

If I never light that pilot again, it will be too soon.


Gas here this morning on my way to work $1.34.....on my way home $1.75 HERE WE GO AGAIN.... @ 30% INCREASE IN A MATTER OF HOURS
 
I have read a lot of posts on here about break even points in pellets v. oil or other fuels. A lot of these projections seem optimistic based on the perfromance I am getting but there are so many variables its hard to tell. The one variable nobody talks about is the increase in the electric bill for the stove itself and fans to move air around. I just got my first bill from a month of running the stove 24/7 with some fan use on cold nights to try and distribute warmth and the change was drastic. If that increase carries through the winter it will add more than the cost of another ton of pellets to the total heating cost for the year.
 
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