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How do you guys calculate your savings?

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by Hammerjoe, Nov 29, 2007.

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  1. Jabberwocky

    Jabberwocky New Member

    Joined:
    Mar 31, 2007
    Messages:
    148
    Loc:
    Central Massachusetts
    Same here, the BtU analysis always seems to askew ... usually with people later revealing that they live in Washington State with $0.04 electricity, people from the midwest with NG at half the price, or people not realizing that outside air temp has a MASSIVE effect on how much energy you use.

    My simple method:
    Last year $1700 to heat the house to 62 day/58 night during a modest year using NG.
    This year projecting $680 to heat the house to 73 day/70 night during what is looking to be a cold one.
    Looking to save roughly $1000-$1300/yr so it'll take a 3-4 years to pay for the stove, after that its all profit.
    X factor: NG is up 20% so this year it would have cost $2000 to freeze my ass.

    The bottom line is that the efficiency of my NG for my forced hot water system is unknown, the stove is unknown, the pellet BtUs can be all over the place.

    But here goes the open invitation for someone to parachute in and tell me how warm I would have been paying $2000 for NG this year. KEYSPAN employees and amateur physicists are especially welcome.

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  2. Hammerjoe

    Hammerjoe Member

    Joined:
    Aug 18, 2006
    Messages:
    132
    Loc:
    New Brunswick, Kanata
    I am sure someone will do the calculations abotu btu's and stuff, but I am skeptical that you will be saving $1000.
    How many bags did you get for $680?
    And how many gallons did your $1700 buy last year?
    If you needed $2000 of natural gas to keep your house warm, I doubt that $680 of pellets will be suficient to keep your house warm.
    Unless you made other changes to your home, like improving insulation!
  3. GVA

    GVA Minister of Fire

    Joined:
    Sep 4, 2006
    Messages:
    2,140
    Loc:
    Waxhaw, NC... Formerly North shore Mass
    As far as the calculators go, you need to know what They are using for the BTU per pound base.
    BTU per pound vary with pellets.
    The way to figure out what the site is using is as follows
    put the price per ton in at $100 and EFF at 100%
    here is what the calculator here say's
    cost per mil BTU=$6.20
    now $100per ton / $6.20 per mil BTU = 16,130,000BTU per ton
    16,130,000 BTU per ton / 2000lbs = 8065 BTUs per pound
    That number is low it may be ok for standard grades but not what I've been burning There are some that are 9200 BTU per pound.
    So knowing this take any and all calculaters (even this one) with a grain of salt when comparing cost of pellets or wood.
    Fuel oil, NG and LP are a different story.
    You need to make sure that you are burning good quality pellets to get the best BTU for the buck.
  4. GVA

    GVA Minister of Fire

    Joined:
    Sep 4, 2006
    Messages:
    2,140
    Loc:
    Waxhaw, NC... Formerly North shore Mass
    quick ref here
    1 ton of pellets say 18,000,000 BTU
    cost $240
    18,000,000 BTU = 180 Therms
    180 Therms at 1.84 per therm
    equals $331.20
    ther difference in one ton for me would have been$91.20.
    That was the story on the north shore last couple of years for me
  5. webbie

    webbie Seasoned Moderator Staff Member

    Joined:
    Nov 17, 2005
    Messages:
    12,099
    Loc:
    Western Mass.
    amateur here.......

    If you would have bought a natural gas insert or freestanding stove with similar efficiency to your pellet stove, and if natural gas prices were about $1.80, and pellet prices $240 (both reasonable delivered averages), then the cost of each fuel BTU for BTU delivered our of the same stove in the same location would fall within a 20% range......it might be even if you paid the high prices of last year $280 or so for pellets.

    So, based on 5 tons of pellets - that would be:
    1200 for pellets
    or
    $1400 for the same amount of natural gas in a NG stove located in the same fireplace.

    For that $200, you have loaded and moved 10,000 lbs of wood a number of times, put up with the dust, had the stove serviced, and probably needed $100 or so more in parts and service than most pellet stoves. Actually, when you consider that the gas stove can turn up or down perfectly and work to a degree or two from a setback thermostat, the difference may be even less than stated.

    Point is, it is a separate subject as to unknown efficiencies of your central heating system, so to avoid confusion we have to compare a gas stove at the exact same location.

    All in all, you are probably saving a quarter to 50 cents for each bag of pellets that you haul, burn and dispose of.

    But, heck, who am I to put aside the "feelings of the carcass?" I know I start feeling very warm when I see certain scenes on TV and in Movies, so I think my cable service is paying off big time.

    I know I cannot "fight" for reality in the face of all the hype. It's like trying to tell someone not to buy a 1080i Flat Screen for $5K because 95% of the stuff out there won't show up any different on it! Perception is everything, but having sold pellet stoves for 10+ years I saw both sides of the "manic depression". Folks were amazed and impressed, often for the first year or two. Then as pellets went up in price, and other fuels down....and as their stove needed parts and service, they often came into the shop with slightly less spring in their step.

    What would excite me now? Fuel blends (biomass), lower and stable prices for fuel, better availability, more central heaters burning pellets/corn, better warranties and more reliability. It is going to take a combination of all that stuff to make this a real part of the energy picture.
  6. Jabberwocky

    Jabberwocky New Member

    Joined:
    Mar 31, 2007
    Messages:
    148
    Loc:
    Central Massachusetts
    All the emotion I'm seeing is in the energy being spent to slam pellet stoves.

    IF pellets cost $280 ..... if my grandmother had a beard then she'd be my grandfather ... pellets don't cost $280 when you take the time to buy off season.

    Spending money on service on pellet stoves ..... gas furnaces need to get serviced too. I lost NG heat for 2 days last year due to a faulty part during sub zero weather .. my service guy didn't even return my phone calls.

    buying a gas insert when you already have a gas furnace in the basement ..... even if NG heating = pellet heating in a given year.....Prices change ... better to have two options.

    There's no doubt ... if gas were at 0.90/therm ... I'd be heating with gas and frantically changing over my cooking stove and clothes dryer while I was at it. But it doesn't and my grandmother is not my grandfather.

    Dust? What dust?

    Disposal? The bags make great 3/4 size trash bags and my trash is free ... I could put out 30 - 30 gallon bags a week if I felt like it. The pallets were greedily taken off my lawn by an anonymous wood burner ... I think they even burning the "free" sign.

    Moving around pellets: well worth it and I'm getting fat anyway.

    62 degrees vs. 72 degrees ... well it would have fun to heat the house with pellets to 62 degrees or stay with NG and boom it to 72 just to get a bench mark figure ... but who has got $1000 to burn? Who can stomach a 3 yr old who protests that he's cold?
  7. Kenny1

    Kenny1 Feeling the Heat

    Joined:
    Oct 20, 2006
    Messages:
    304
    Loc:
    Eastern ON
    Hey Hammer

    I was using 3.4BTU per watt for electric calculations and 16.4 million BTU per ton of pellets in my calculations.

    However, you said something vital.

    If (with the electric heat) you typically turn down the heat in rooms that you do not use, and only heat the room that you are using..... well I think that is significant.

    As you point out, the pellet stove cannot heat one particular room at a time.

    So, going back to one of our earlier posts - are you keeping the house warmer with the pellet stove than with the electric heat?

    It sounds like you are keeping most of the house warmer with the pellet stove than you tended to do with the electric heat. That, of course, would require more heat input than keeping a single room at the comfortable temperature.

    As you point out, the calculators only figure out the price per BTU. If you were only heating a small portion of your home (e.g. one room) with the electric heat, it would (of course) require FAR less BTUs than keeping the whole house at a comfortable temp.

    Now if the above is true, here is your mission (should you choose to accept it ;-) ):

    You know the price per BTU for the pellet heat. You know the price per BTU of electric heat. Now, because you are takng advantage of zone heating, you have to figure out if it is cheaper to use expensive BTUs (but less of them) or the cheaper BTUs (but more of them).

    At this point in time (and correct me if I'm wrong), it sounds like you are paying a bit less than with electric, but the whole house is warmer. And that may not be the trade off that you were expecting.


    Cheers


    Kenny
  8. petejung

    petejung New Member

    Joined:
    Sep 28, 2007
    Messages:
    212
    I agree with so many of you that mentioned that it's nearly impossible to go apples for apples on a cost comparison...

    What I do, is I know I've already bought $480 worth of pellets this year, and my heating bill is averaging $120 cheaper/month...So, I am forcasting that I should just about break even, maybe save a little. BUT, I'm also sitting in a 70+ degree room, not 65 degrees, so that's worth quite a bit to me & my family right there.
  9. mkmh

    mkmh New Member

    Joined:
    Jul 15, 2007
    Messages:
    407
    Loc:
    Southern, Maine
    If I were to "bill out" my time and effort spent on moving pellets around and maintaining the stoves I am quite sure my savings would dry up pretty quickly. I think I can conservatively say that over the course of the heating season I put in at least 40 hours of work that I would not have to do if I were to stick with a conventional heating arrangement.

    If I put a value of anything more than 10 bucks per hour on my own time i'm going to start falling into the red. At the end of the day I enjoy mving pellets around...I enjoy screwing around with the stoves, and I take pride in the fact that i'm heating with a renewable resource (writing fewer & smaller checks to the propane company). Given all this, the savings are real for me.

    I think Craig makes some great points in his post. In general if you are considering a pellet stove, saving money should not be your only driver. A pellet stove is quite a bit more work than some kind of central heating system, so you have to make sure you feel good about taking it on (in total). They are also pretty expensive, so just getting "out from under" the front end cost may take 3-5 years (or more). By the time you are in that space where you're pocketing all the savings, your warrantee is probably up. At that point you may be replacing a part or two per year...which will definitely eat up any savings, if you're not doing the service yourself. Add into the equation that pellet prices are disturbingly tied to petroleum prices and you have conditions ripe for some very disappointed stove owners.
    Having said all that I am a pellet-head through and through. I'm thoroughly enjoying blasting away with my 2 stoves this year...and I came really close to buying a third one back in September. I sincerly hope the industry can adjust and capitalize on the current oil situation, but so far I have been less than impressed by the overall progression (shortages and price gouging in 2005).
    A couple things i'd like to see in the near future that might help the industry (in no particular order)
    1. New creative "blends" of pellet fuels (wood, corn, grass, paper-waste, whatever) which might be a little less than "premium" but perhaps could be offered at lower cost
    2. More reliable pellet appliances. Lets get some Lean-Six Sigma experts into these companies and start focusing on quality control! Most home-owners have no appetite for replacing igniters, fans, augers etc.
    3. Stability in Pellet Supply. I am a pre-buy guy myself, but that is mainly because I fear the supply problems faced in 2005. If I was confident that Walmart and HD would be stocking pellets in mid-march then I would probably just start with 1 ton and then buy 5-10 bags every couple weeks as needed. This would be much more convenient for me, as it is a big stretch for me to store 3 tons!
    4. Stability and predictability in pellet prices. A tall order, but if this industry is not able to give us something better than what we're getting from the oil industry...then it becomes hard to get excited about pellet fuels
  10. Rhone

    Rhone Minister of Fire

    Joined:
    Nov 21, 2005
    Messages:
    824
    Well, for me I used previous heating. On average I used 650 gallons of oil for heating at $2.3999/gal = $1,560 That translates to 72.8 million btu's in an 80% efficient boiler. I figured a cord nets me around 17.5 mill btu's in a 70% efficient wood stove, or I'd need about 4 cords. Costs me $185/cord = $740 for a savings of about $800/yr. This year, with oil being I believe $2.6999 looks more like $1,750 or so.

    But, as you have noted there are unexpected things. Driving home I see signs for "free wood" so I grabbed it. If my neighbors are taking trees down I ask them for it. I take branches off properties in my neighborhood, my neighbor has about 4 cords of scrap furniture wood (all unfinished cherry & oak) he begged me to take. People driving by who have stock-piles of wood or scraps they don't know what to do with come by my house asking if I want it. So, although my predictions originally were showing a savings of about $800 I've been collecting more than I'm burning (which wasn't my intention) so things are technically upside down compared to my original predictions.

    So, I guess it is really hard to predict as, for you pellets went up even more than electricity (and doesn't it take electricity & oil to make pellets so, as they go way up pellets must therefore as well!?) for me I didn't expect people to be begging me to take their wood. But, my feeling is that pellets turned into the big new excitement thing a year ago all of a sudden which helped to bring up the price. Everyone and their in-laws at my work was going or switching to them. I feel that initial excitement has been slowly dying and I believe the cost of pellets will become more economical as the excitement cools down. My fathers wood supplier just invested in a new pellet making machine so, there may be hope.
  11. webbie

    webbie Seasoned Moderator Staff Member

    Joined:
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    Messages:
    12,099
    Loc:
    Western Mass.
    I've got three electrics heaters in my house, and I save money with them (over natural gas). I don't have to defend that, nor am I fool enough to claim that they are BTU for BTU cheaper than NG. But I can't roll my NG heaters around (nor my pellet stove) to various rooms.

    So there is a seat for every arse. My main concern, as an education resource, is just to inform folks of the BTU in and BTU out, and of the other factors involved, and let them make their decisions from there. Very few of us drive around in Priuses or Ford Focuses......meaning we are all very "driven" by various "selling points" (including our egos, for certain!).......

    I am cynical to a degree about these things only because I have seen the ebbs and flows for 30 years. I would love to see a stable and growing biomass market, and would heat with biomass (in some cases), even if it cost more than NG. But, as I stated before, I would NOT tell my neighbor to borrow money and heat with it in order to save big bucks. Cash is one things, debt is quite another.

    BTW, the same goes for wood. Most wood burners know that it is a labor of love, even if they save money. The original old joke was about the cost of heating with wood adding up to $50,000.00 (guy hurt himself with chain saw, bought pickup truck, and on and on).

    Heck, I shoveled and blowed snow for at least 2 hours today. At my programming rates, that's $180 ($130 at my discounted rates). I'm sure I could have had it done for $35, but as someone else mentioned, I can use the exercise.
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