oil up 35%, pellets up at least 40%, still good to invest in pellet?

Just found the new pellets price up at least 40% for pickup price. I am
just wondering if it still worth to invest thousands of dollars to buy
a stove and then thousands of dollars to buy pellets. with that rising
rate you probably wouldn't get return within 10 years. Anybody can give
us an idea at which price level for oil and pellet, the initial
investment (saying $3500) will return back within 5 years?

It`s going to vary with with each user and it`s chancy too
Figure what you use for oil next year and the cost. Then figure that 2-1/2 gals oil = 1 bag of pellets.Savings may be about 1/2 if you are frugal with the pellet burning.
You and you alone have to determine if it`s worth it for the up front cost and the extra work involved and how much you want to wean off oil.
No one can say for sure if the pellet cost will skyrocket or not but if it does the industry will probably die. It will have to remain under the cost of oil to be viable.


John

some great advice Craig. Have you seen prices on cordwood jump up too?
I normally get 3+ green cordwood (a huge pickup truckload) dropped off for around $550 or so. I haven't checked on the price this year since I'm going pellet.

I wonder what the price would be this year.

It is a fairly easy calc

In my case I use about 600 gallons for heat during the winter, 2100 sq ft. Based on actual usage for the last 4 years. I also use another 300 gallons for hot water.

currently oil is 4.80 a gallon. so 2880$. I bought 5 ton pellets for 1400. So rough savings of 1500$. My stove, hearth pad, piping, thimbal with fresh air kit and install roughly 4500$. so my payback is roughly 3 years asssuming everything stays proportional.

So I dont know of anything I could invest in and get 33% return. Worst case maybe it is 4 or 5 year payback, still 25% or 20% is damn good.


Unknows will be pellet pricing and oil pricing going forward. I persoanlly hope both go down but who knows.

Craig has made alot of good points that everyone needs to consider
before going out and purchasing a stove.

The stove shops around here are packed full with panicked people running up
their credit cards buying stoves and fuel and telling others it will heat their entire
house for the winter. This may work for some, but it is not the norm.
The demand is driving up the prices fast and furious.

Is demand or steel prices driving up the price??

In reality it sounds like if one hasnt ordered a stove by now they will probably not get one this year. I ordered mine a few weeks ago and was told it would not be in until the end of August.

The price was the same at three dealers I talked to. They were cheaper 2 months ago but found out those were stoves in stock and the price had increased on the new orders.

Also if there has been any increase in price I would assume it is due to the material costs going and delivery cost to the dealer.

you would get a better payback converting to gas if possible

I bought a pellet stove to be delivered Thursday, have 3 ton of pellets in my garage right now . I would like to see oil go down enough to just mostly use oil. I set the thermostat to 70 deg and leave it there for the winter, just need to keep oil in the tank. I have always liked oil, not at the price it is now.
I like the idea of having a fire I can see in the living area, seeing the flame can be relaxing. I have a wood stove in the cellar, this is for no power heat, have to be prepared in cold country.

Considered that but gas company would not guarantee pricing for any period of time other than 1 year. I would have had to invest in new gas boiler and remove oil tank etc Not worth it. I think gas will be the next source to go sky high in price. There have been shortages up here in our neck of the woods to the point where some generation using natural gas has to be off line due to shortages in the winter. Throw in Congresses lack of response to drill local and it is another commodity which can be bid up by foreign investors who could care less about the US market.

you are right. Just compared with natural gas. if gas is $2 and pellet is $280. they are almost the same. I think convert to gas if possible will be a better solution.

I think the initial cost may be less.

For pellets, you also need to take care of the stove, keep your doors open all the time and find storage for pellets.

lmei007, you already bought/installed the pellet stove last season correct?
I'm assuming that you didn't get in on the early buy for pellets this year
if you're asking these questions?

Hi Zeta, you are right. We have one but we are thinking about buy another one few months ago for our basement. Also there are lots of people just started thinking about the alternative of oil heating. All of us need to think again under current situation.

I agree, there are too many variables to make a blanket statement that covers everyone. My situation: I am stuck with propane at 3.70/gallon. I don't know why, but NJ has the 2nd highest LP prices in the country. According to the fuel comarison calculator, pellets would have to be almost $600/ton to match my BTU cost of LP. I'm set for this year, and should see a significant savings. We'll see about next year....

Ouch $3.70/gal. for propane. Heck that's almost the same price as fuel oil. Makes me thankful I paid a high of $2.65 this year. Admittedly, I bought 600 fewer gallons than my average due to the installation of the stove.

Prices are going to fluctuate for all heating alternatives, I like having the choice of using at least a couple of different heating methods based on what is currently most economical. The folks I question are the ones who have installed pellet boilers solely due to the current oil situation.

I'd also consider adding a NG burner if NG were available in my area, but it's not...

Yeah, we kept the t-stat as way down this year. I just hope the pellet stove supplements us enough to keep the house toasty and the bills down a bit. I'm not looking for miracles. I got a good deal on pellets at the end of the season. Next spring may be a different story.

Are pellet prices really up 40%??
I just haven't seen that at all yet (Southern Maine/Seacoast NH) and I have been staying on top of it.
I agree that the supply will be challenged this year and shortages are somehwta likely, but the only place I expect to see a 40% increase is out on CraigsList, where your going to see some opportunists trying to resell tons at a 40-50% mark-up. That happened in 2005 and I remember thinking..."Good Grief People -- Just stick with Oil!!"
I can't imagine buying a pellet stove without securing at least 3 tons of pellets that same day, but apparently lots of folks did that in 05. I assume these are the folks who were paying the silly prices, since they had just dropped 2-3K on a new stove.

Anyhoo, I just ordered pellets last week for about 10% over what I paid last year around this time. If you've been quoted a price 40% higher than last year's price you should probably do some more shopping.

Just a tid bit for those that have Natural Gas... I installed my empress in January and saw a savings in my gas bill immediatley. The price per therm is around $1.80 but if you add in the "delivery charge" right now the price per therm is around $2.40...Just an FYI

For anyone with access to a tractor a simple pellet making machine is relatively cheap for the production of small quantities of pellets. The quality of the timber is less important than the size and moisture content 8-12%. If you can find a source of sawdust from a furniture manufacturer you have hit the jackpot.

http://www.pelletpros.com/id69.html

Got a link to this gizzmo?

Ducker,

That's one h$ll of a pickup load. 3 green cords would weigh at least 6 tons, not to mention be 384 cubic feet when split and stacked.

It takes a big and heavy duty 2 ton pickup to deliver 1 cord, even seasoned.

That's my shock at reading your post.

I haven't priced this year, but estimate seasoned split hardwood will go for over $300 per cord in NJ this year, about double the price of two years ago.

The pelletsales. com PICKUP price is $284.90 for Jun-Jul and $304.9 for Aug-Oct today. They are check price, credit card price will add 2.75% more. The increase is more than 40%.

I'm wondering how long pelletsales.com is going to be a viable business. Frequenting this forum, it's been quite a while since they've been able to take / fill orders. If it were me, I wouldn't bet my heating season on a .com

In most retail outlets, stock outages (like the one pelletsales.com has been having for weeks) are typically the beginning of the end for two reasons.

1) It is typically either a sign of either poor management, lack of planning, lack of ability to leverage their suppliers (i.e. there's always a bigger fish in the pond) or some combination of the three.

2) Most prospective customers, once shunned, will find an alternate outlet rather than wait around for a company to get their act together -- once the alternate outlet is found, a customer is far more likely to repeat buy / recommend the alternate than to come back to the place that was not able to meet their needs initially. I certainly have, the 7 tons in my basement and 3 more on the way can attest to that, on the low end I paid $219, on the high end $225. On the average, $4 more / ton than I paid last year.