Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by Steveo, Aug 8, 2008.
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The oil dealers that had people lock in at $4.50 with insurance are going to have fun with this.
Was this going to happen anyway or did the "Pellet Craze" have something to do with it?
The demand for oil didn't go down did it??
Based on the heat output oil vs pellets (120 gals = 1 ton of pellets) oil would have to be
at $2.10/gal to be equal to a ton of pellets @ $250/ton.
Or, pellets would have to go to $425/ton to be equal to oil at $3.75/gal.
Interesting stuff these oil/gas prices!
Well whatever has caused the prices to go down will be good news to people on fixed income etc.
Also, we will have a second way to heat the house.
Next year, and the heating season the year after regardless of where oil is most homes in Maine that were once 100% oil will have adjusted to an alternative source for heating. The real problem is that these homes are often big with attached barns, root cellars, and likely use chicken feathers for insulation.
There is a short term solution of conversion and then there is still a long term solution yet to be resolved and that is can these old homes become energy efficient? A ball park figure may well be that these structures consume on average 1600 gallons of oil per year. If they can reduce oil consumption by 40% then they'll be on par with the cost of heating with pellets.
If the system is poorly designed then it is likely losing another 20% efficiency, regardless of how well the oil burner is tuned or the new system installed is stated to perform.
Well its nice to see it go down...here in Central Maine it isnt going down as quickly as gas...still $4 gal cheapest around Augusta....I bought a pellet stove not only because of the oil prices...I finished my downstairs last year on my home (a ranch) with a walk out basement...very nice down stairs but no heat...had to wait until this year to come up with a heating solution for the new living space....funny thing is that I got quotes of $2000 to $2500 for a new zone from my boiler system downstairs.....I was going to get a Rinnia vented gas system....then I researched the wood pellets and decided on it instead...mainly because its the closest I can come to having a real wood stove without sinking $5000 plus into a chimney and stove......I only have $1900 wrapped up in my pellet stove...more than the gas stove ($1700)...but I still like it...anyway, have a nice one!!
WOW! Well that explains why pellet stove sales are the new "Crack" in the hearth industry right now.......
Easiest general way to compare pellets and oil is to just move the decimal point.
So $3.50 oil is equal to $350 pellets.....
Many people are paying $300 delivered for pellets....so they are, in theory, saving 50 for hauling 40 bags, scraping their pot, cleaning the stove, etc...
BUT, if they (like most people) need to get their stove serviced once a year - for at least 150, that is the savings from 3 tons gone (most people burn this or less).
This also does not figure in the cost of the stove......
In my opinion, the ideal difference for actual financial savings should be 50% or more - $200 pellets (true in many places) compared to $4 oil (under that in most places right now, but not 2 weeks ago).....
Harman sat with 20,000 stoves in the warehouse in 2007 for one reason only - that oil was less than $3 and pellets were more than $250. As per the quote from Dane Harman himself:
"I had 23,000 units in stock and no reason why anybody should buy any of them," Harman said.
Dane learned the hard way.......luckily, we each only have to buy one.....
I get my oil furnace tuned-up once a year, too. last year, I needed to replace the power vent, to the tune of over $1000....
apparently, there are still some in there, which really makes me wonder about all the hype. but thats another subject...
The thing for me here up North of the border is that the current price is still well above $5.00 for a US gallon( I burn about 800 imperial gallons per season), this will remain throughout the season as there is no competition among suppliers and I can get pellets supplied for about $250.00/ ton delivered.
My basic math has me saving approx $1200.00 to $1500.00 this season, if the price of oil falls then all the better. We will still have a beautiful addition to our home and all the upsides other the price that the stove delivers.
I agree 100%
Hoping to have ROI at the 2 year mark!
theres also one thing about pellet stoves that makes it better then fuel oil is that I can buy by the bags or just 1 ton at a time if needed /when needed..
I live week to week paycheck wise as alot of us do...
and I cant afford the minimum 150 gallon delivery of fuel oil.
But if need be I can run to walmart or any of the hd's lowes etc and buy by the bag as needed.
Yesterday, while driving through Mexico (Maine), CN Brown was @ $4.19/gal
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