Webmaster said:
When it comes to "close call" paybacks, the numbers can be manipulated just like polls.
The delivered efficiency (to the living area) of pellets stoves is up-in-the-air......my guess is that some models are 60% and others as high as 75%. Big difference! I am not talking EPA default ratings nor lab ratings, which do not take into account things like cold outside air, excess air sucked from house (when OSA is not used) or losses in fireplace inserts.
Heating oil has never averaged at $5 for a heating season...in history! That does not mean it will not this year, but most predictions are BS. It could be $3.50, it could be $5.50. Big difference.
Oil burners vary greatly in efficiency. Many have to be used for DHW, even if one has a pellet stove.
How much oil does a ton of pellets replace? Let us guess that someone has a 70% efficient (in real world).....
one ton = (7500 BTU heating value after moisture) - 150,000,000 BTU x .7= 105,000,000 BTU delivered to house.
100 gallons of oil - 138,000,000 BTU heating value times 80% efficient = 110,000,000 BTU delivered to house
This would put a ton of pellets at 100 gallon of fuel oil, probably a good factor to use, although a range of 90-125 gallons (best and worst case) might be better.
Perception is always reality. If I give 100 people a sugar pill and tell them it will make them sleepy, a good percentage will react.
For the most part I agree with the calcs presented...It should be noted that the calculations should also include the realized cost that would also be incurred for the fuel...ie, one should not discount operating costs since they are a "real cost"....for example:
My household uses 700 gal/yr with the following breakdown based on the last 4 years of data:
500 gal/yr for heating
200 gal/yr for hot water
I discount the hot water since I will not be able at this time to convert to another system for hot water heating until next year. Therefore the energy need that I have is:
500 gal/year * 139,000 btu/gal= 69,500,000 btu's for the year (1 gal of heating fuel is approximately 139,000 btu's)
In order to offset this in terms of pellets I would need the following:
8000 btu/lb *40 lb/bag= 320,000 btu/bag
(69,500,000 btu)/(320,000 btu per bag)= 217 bags or a little over 4 tons
EFFICIENCY
The efficiency of my oil furnace is generally around 83 to 85% versus a "rated" efficiency of my wood pellet at 78% (default according to the manufacturer. Therefore my boiler is 5 to 7% more efficient than my wood pellet stove. So the actual number bag of pellets is need is to be increased due to lower efficiency of the pellet stove...for sake of math lets call it 5% differance...therefore:
1.05 x 217 bags= 228 bags (roughly) to match my oil consumption for the year IF I were to solely use my wood pellet stove instead of my oil furnace to heat my home.
INITAL COST ANALYSIS
Cost of Stove: $1300
Installation and Materials: $500 (hearth pad constructed by myself, installation $150 for direct vent, dura vent $200 at Lowes)
Total Cost of Install: $1800
PAYBACK PERIOD BASED ON OPERATING COST AND INITIAL COST
Assume a savings of 400 gal/yr out of the 500gal/yr; it could be more or less depending on the individual and their needs.
Annual Fuel Oil Savings: 400 gal/yr x $4.50/gal= $1800 (I wish I could get oil here in Maine at my location for $4.50/gal...currently it averages at $4.70/gal)
Annual Wood Pellet Cost: Amount of wood pellets to offset 400 gal... (400 gal *139,000 btu/gal) / (40 lbs/bag *8000 btu/lb)= 174 bags
5% Efficiency markup to match oil burner efficiency then 182 bags or about 3.6 tons
3.6 tons x $275 per ton=$1003 per year (say $1000) operating cost using wood pellets
Realized Annual Savings: $1800-$1000= $800 per year savings based on fuel (energy) consumption
Payback Period: $1800/$800 per year= 2.25 years for payback
CONCLUSION
The calculations above are straight forward and within reason; probably about 3 to 8% variation. What it boils down to is the initial up front cost and annual operating cost. Regardless, it will take me approximately 2.25 years to realize my savings. In general it will take 2 to 5 years; depending on your initial up front cost; to realize the savings.
However there are other cost considerations:
a. If something should happen to the oil supply chaing then expect the cost of oil to go up dramatically. I am a firm believer in that one needs an alternative energy source due to the volatility in the world today. If you think people are panicking by buying wood pellet stoves and pellets now, imagome what would happen if their was a supply shock due to decreae in production of fuel. So, don't put all your eggs into one basket grasshopper
b. Putting it to the OPEC, the Oil Companies, Congress, and all the other greedy people who are trying to profiteer= PRICELESS
Anyway, my 2c's worth ....good day
Ossy