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  1. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    Well, I'm taking the plunge into pellet fuel. I have too many potential customers who don't have their own woodlots. And a number who live in areas where they simply do not have space for a wood pile of any size, so they would be relying on getting small (expensive-per-cord) deliveries all winter in order to heat with wood.

    So, I'll be carrying the Pinnacle PB150 pellet boiler (and the pellet furnaces, for that matter). I was always a bit leery of pellet systems due to the problems I've heard over the years. But Mark from Evergreen Heat called me and wanted me to take a look at his setup in his shop. I'll admit, I went there mostly to see how his Econoburn was running, and to look over the brand-shiny-new one he had in stock, which has a few upgrades over the ones that were produced a few months ago. But we ended up spending just as much time talking about, operating, and dismantling his PB150 and the feed assembly/burner that he keeps on his workbench for demonstration purposes.

    I'm still a big fan of wood, but I think that pellets really are going to end up being a large chunk of the central heating market, simply due to the fact that we cannot put a wood gasifier in so many locations, due to space constraints or lack of sufficient basement access to get the thing in there, even if there is plenty of room.

    Pellets aren't an "ideal" technology, but if they can bridge the gap for folks who want to heat with biomass, but simply cannot practically heat with cordwood, I'm for it.

    I'm working out exact pricing for installed boilers, now, but even based upon the preliminary pricing I can see that the payback period is still reasonable, despite the higher cost of pellet fuel versus cordwood. With oil going up every year, the payback is only getting better.

    Joe

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  2. trehugr

    trehugr New Member

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    Care to find a buyer for our Harmon P68 ? Money will go towards a Econoburn or EKO.
  3. webbie

    webbie Seasoned Moderator Staff Member

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    I think Pellet boilers would only have a "payback" in select circumstances - such as against LP. When the cost (very high) of a good pellet boiler and installation is figured in, plus the pellet handling, service, etc.......payback might be tough.

    Exception would be in areas where bulk delivery right from the Pellet plant would be possible...and also where industrial or commercial grade pellets were available (at lower prices). Sure, oil might go up - but so can pellets. No one has a crystal ball, but I think you will actually see fuel oil come down in the next year.

    NE Pellet has bulk delivery available from their truck into a storage silo or hopper. That is a different thing because you eliminate the handling of many tons of pellets.

    Some back of napkin calcs......
    say 200 for pellets and 3.00 for fuel oil.
    Same efficiency - but chances are that a good oil unit is more efficient!
    Oil - 27.50 per million
    pellets - 16.00 per million

    Take a scenario where someone used 900 gallon of oil - $2700
    The pellets would cost $1600.

    That is a savings of $1100 a year.

    If the cost of a Pellet boiler is $10,000 installed (?? more or less??)......
    figure $600 a year in interest lost from having to put that money up front.
    figure $300 a year (minimum) for cleaning, parts, etc. long term - some can be DIY)

    That is $900 a year. So the customer saves $200 a year. Yes, it is a savings, but given the variables it is a leap of faith. There are a lot more oil suppliers than pellet suppliers.....

    Mind you, I'm not trying to spoil the party, just stating that there are qualifications and also MANY other reasons that someone might want to burn pellets....but price is not usually the main one. Obviously some of this stuff is regional in nature.

    Given the limited number of pellet boilers on the market and their relatively short time in the field, it is hard to really talk accurately about how long they will last and how much service they will require.

    I like the idea of automatic central heat. Using hard coal (stoker) in the example above would result in a savings of closer to $900-$1000 a year (after expenses and interest). It would be nice if local biomass could eventually be competitive with coal.

    Before I suggested such a setup to a family member or friend, I would want to know about multiple sources of pellets available in bulk. Tying a customer to one or two plants (when said plants have already shown that they sell to the highest bidder...often Europe!) just seems like a tough call.
  4. Sting

    Sting Feeling the Heat

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    I am on my second season burning a PB150

    Several other friends are in their first and second season also

    One on his fourth

    Very robust appliances

    When corn was 70 a ton payback would have been one - 1/2 seasons - ethanol changed that

    since January 15 i used the last of my corn and I now burn hi quality pellets - not the kind from the big box stores.

    I bought a truck load. 21.6 ton - Storage is a 6 ton bin outdoors - augers feed in - no touch till ash.

    If I could have afforded it - I would have bought a Baxi but Harmon just came out with a PB105 boiler that looks promising UL approved certified vessel. But so far it is only certified for wood pellet fuel - not corn barley wheat oats - all the things that if I can score cheep I can burn.
  5. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    There are some other issues with the napkin math, but...

    I don't get many folks who burn such tiny amounts of oil calling me on these systems. They usually burn twice that before they call me.

    Joe
  6. Sting

    Sting Feeling the Heat

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    I think you have hit an issue I live in - The Traeger and the Harmon have an alleged input similar to a traditional appliance for a modest sized house. There isn't a larger model until you step up to the potential and cost of the Tarm appliance. Tarm has several models - the big gun could carry a load that two Traegers might struggle at - and for almost the cost of two Traegers.
  7. webbie

    webbie Seasoned Moderator Staff Member

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    Here is Tarms cost calculator - seems to be close to my figures above
    http://www.pelletboiler.com/mh_fuel_price_calculator.asp

    Stings experience underlines what I said about future fuel costs.....I'm certain that the wood pellets are costing 2 to 3x as much per BTU as the corn was. Stuff like that can quickly change the equation.

    And, yes, if you are using 2,000 gallons ($6,000) worth of heating oil or LP to heat your house, the equation changes! In that case, however, you should start offering insulation contracting and replacement windows!
  8. Sting

    Sting Feeling the Heat

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    yes I know - conservation not conversion - I preached it for 30 years Then I found myself living in a wonderful Victorian money pit - modern insulation is not always possible and modern windows will destroy the place. So alternative was the only choice when NG went over 1.00 a therm. And believe me solid fuel was not ez for me to pull the trigger on. Yes I was young then but I still remember how happy I was when the coal stoker under the boiler was replaced with an atmospheric NG gun set.
  9. ssupercoolss

    ssupercoolss Member

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    i have always had to disagree with those cost calculators. there are a few things they dont account for. currently my pellet stove does about 90 percent of my heating. thats 3 tons of pellets. i do have to occasionally run my oil boiler when temps get down to about the 20 degree mark. i have some pipes in an unheated crawlspace (not my doing) that will freeze under certain circumstances. i looked back on my oil deliveries to find i was using upwards 800 gallons to heat my home. the conversion charts say i should only use 300 some gals of oil for 3 tons of pellets.

    heres my take on my pellet stove. its a great device, it works off of a thermostat, lights itself and can run for 20 hrs plus, and by plus i mean up to like 48 hrs depending on the temps. but i think it is fairly inefficient when the temps get down towards 20. it can burn 4lbs per hour max, which starts getting close to what it would cost me to run the oil.

    that is why i am currently looking into a wood boiler as well. i think every appliance has an efficiency curve associated with it. my plan is to run the boiler in the colder temps, and run the pellet stove when temps are bit more mild.

    also, where my pellet stove is located is not the ideal location to be used for heating my whole house. central heating is really nice.
  10. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    Bingo. The "cost per million btu" of the fuel is only one factor.

    The system efficiency of the existing equipment is a consideration, too.

    There are brand-new oil boilers which have system efficiencies in the 55% range. Older boilers can be even lower in many cases.

    Do you replace that boiler with a new, efficient oil boiler? Or do you spend 1/3 more (as a ballpark) to add a pellet or maybe 1/2 more to add a wood boiler? That 1/3 or 1/2 extra is the real cost of the biomass boiler.

    Let's ballpark some efficiency numbers... replacing your oil boiler with a more efficient model will raise your system efficiency by 30%, while installing a pellet boiler will raise it by 50% (since pellets are roughly half the cost of oil) and a wood gasifier will raise it by 70% (since wood is even less expensive).

    There's your cost and benefits. If X is the cost of the oil boiler, and Y is your current fuel bill...

    Oil boiler costs X and returns 0.3*Y per year.

    Pellets boiler costs 1.33*X and return 0.5*Y per year.

    Wood boiler costs 1.5*X and returns 0.7*Y per year.

    If we assume that your oil bill per year is roughly 1/3 of the cost of a new oil boiler (X = 3*Y), we can actually solve those out...
    Oil - Spending 3Y returns 0.3Y per year - payoff is 10 years.
    Pellets - Spending 4Y returns 0.5Y per year - payoff is 8 years.
    Wood - Spending 4.5Y returns 0.7Y per year - payoff is 6.4 years.

    If your yearly oil bill is half the cost of a new oil boiler (X = 2*Y), the payoff rates are...
    Oil - 6.7 years
    Pellets - 5.3 years
    Wood - 4.25 years

    If your yearly oil bill is 2/3 the cost of a new oil boiler (X = 1.5*Y), the payoff rates are...
    Oil - 5 years
    Pellets - 4 years
    Wood - 3.2 years

    I don't figure that there is a small interest rate that could be earned (or must be spent for a home equity loan) unless a customer really wants it done, since the improved efficiency will continue long after the unit pays off, returning a higher "dividend" than most other investments.

    What it eventually boils down to is that if you are burning less than 1000 gallons of oil per year, and you are looking at this from a purely economic standpoint (eg, you don't care about using locally-produced fuel, or have environmental concerns about oil use), then your best bet is to either invest in something substantially-less-expensive than a central heating system (like a pellet stove), or start putting money aside (earning interest on it) for future replacement of your system (when it actually fails).

    1000 gallons per years is one of my "guidelines" for recommending these sort of systems (along with btu demand and such). If someone puts additional value on the self-sufficiency or environmental aspects of biomass, then the fuel usage guideline may be a bit lower for them, since the payoff is not the most critical a part of the equation.

    When residential and light-commercial systems start getting up to the 2000-gallon-per-year mark, then it really gets to the "it would be insane not to use this technology" level.

    Joe
  11. webbie

    webbie Seasoned Moderator Staff Member

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    Each situation is different, of course, and must be addressed that way. However, "blue sky" theories are not my bag, since Murphy has always gotten in the way of those for me (that is my experience over 35 years of home heating and sales of appliances).

    Not taking an initial investment into account does away with any fair comparison....when that investment can be $10,000 or more. Since many people do not have the cash sitting around, a 6% rate (home equity) would be MINIMUM. That is $600 a year. Many people buy on credit cards or at higher (prime plus) rates.

    But as Joe points out, there is no magic in Pellets. It is all about BTU for the buck. In fact, I would venture to say that a Pellet boiler or furnace would not have the same system efficiency as a top-notch oil unit.....in the field. Until someone actually tests (AFUE) many of the pellet boilers on the market, I would take manufacturers ratings with a grain of salt. Tarm may be the exception.....it is engineered quite well.

    As an example, during the first pellet boom stoves were claimed to be 80% efficient. So they finally did some field testing and guess what? They came in at 52% to 75%. Furthermore, guess which pellet mechanism ended up with the lowest efficiency? ......... Traeger! (Earth Stove used this)....as I remember it was 42 to 52%.

    My point, as usual, is buyer beware and make certain of fuel costs, availability...and, if REALLY possible - system efficiencies. Using all the best advertised numbers (lowest pellet prices, highest oil prices, lowest yearly service costs) can result in a big change in the potential savings. While I am an optimist, I also tend to be very conservative when working with numbers. After all, you can read ads which show you how to save thousands with plug in electric heaters. Someone has to talk about the other side of the equation!
  12. richg

    richg Minister of Fire

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    Uh, does anyone give any thought to considerations besides money when choosing a heating system? How about that heating with pellets does not contribute to global warming, but coal, natural gas, propane and oil do? How about that petroleum-based fuels put money into the pockets of tyrants like hugo chavez and mahmoud ahmadinejad?
  13. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    The Pinnacle boiler actually matches its advertised efficiency. As I've said, I've not been a fan of pellet fuel in the past. Which is why seeing one in operation in an actual building, generating an actual efficiency within a couple percent of the advertised efficiency was important...

    Not that I care overly much about AFUE, per se - your AFUE goes up if you open all your windows in the dead of winter, even though your actual system efficiency (fuel efficiency) goes way down.

    Joe
  14. webbie

    webbie Seasoned Moderator Staff Member

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    I think I addressed that above (and many other times) with this:
    "Mind you, I’m not trying to spoil the party, just stating that there are qualifications and also MANY other reasons that someone might want to burn pellets..."

    But that is a given. If someone wants to "go green", they will spend extra money on solar PV, hybrid cars, and perhaps pellet stoves and boilers. However, they should always go in with "eyes wide open", and using manufacturers and dealers claims is not the whole picture (of product shopping).

    Joe, that is great that their products meet the advertised efficiencies. Maybe someday we will get a pellet boiler user who sets up the whole rigging like Nofossil!
  15. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    Heh. My planned heating system makes his look simple. Two oil boilers, pellet boiler, wood boiler, solar for heat sources. Radiant zones, radiator zones, fan coil zones, a detached greenhouse, a hot tub, and a snowmelt system in the driveway for loads. Multiple storage tanks that will be staged in depending on the weather and the fuel availability. All controlled by a networked computer system (which will also function as the room thermostats). This will be done in phases over the coming years, unless I win the lottery (which isn't likely, since I don't play).

    Joe
  16. chiggins

    chiggins New Member

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    Joe, I'd be curious what you plan to use to control your system. I have been dreaming of a similar system and will be starting my install in a few weeks (minus the wood boiler). (see http://www.hearth.com/econtent/index.php/forums/viewthread/14843/)

    I am trying to decide what type of control system to use. I love the stuff nofossil has done but time is always at a premium and trying to roll my own networked system might be a bit much. I also looked at some tekmar controls but those prices add up real fast! What do you plan to use as a platform for you thermostats and controllers?

    -Chris
  17. BrownianHeatingTech

    BrownianHeatingTech Minister of Fire

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    Sorry, I'm planning to do what nofossil has, and then some. I've chatted with him about the subject a bit. The goal is a "smart" system that will actually monitor itself and "learn" the most efficient way to do things. By monitoring actual btus, weather, etc, and having costs of different fuels programmed it, it will be able to choose which heat source to use, and whether to charge a tank (or two or three or four) versus heating directly. It's not going to be a "practical" system, but rather an experimental platform.

    I'll try to take a look at your thread, when I get a chance. I still have limited time/energy available for Hearth.com due to family and business demands. Email is probably the best way to get in touch with me.

    Joe
  18. Sting

    Sting Feeling the Heat

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    What would you like to see?
  19. solarguy

    solarguy New Member

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    I think getting into pellets is a wise move. But the from a payback perspective, ton of pellets against the equivelent gallons of oil are pretty equal in price & BTU output. I'd venture out there to say the same holds true for propane if the client is using a condensing gas boiler.

    What I've found about the pellet crowd is they have made the decision not to burn fossil fuels & support opec. Unlike the wood burner crowd, which is basicly cheap, the pellet crowd doesn't really care about the payback.
  20. Eric Johnson

    Eric Johnson Mod Emeritus

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    We had a thread awhile back where a pellet boiler (I think) owner was using more $ in pellets to heat his house than he would spend with his oil boiler, even though both appliances were in the mid 80s in efficiency and the amount of pellets he was burning actually had a higher btu content than the comparable amount of oil needed to do the job. I don't think we ever found out what the problem was, but I found it interesting to make that comparison in a real-world situation where he could do both, keep track of the results, and draw the conclusions from that. Unfortunately for pellets in that example, it didn't favor the wood option in his case.

    My point, I guess, is that there are no guarantees.
  21. Burn-1

    Burn-1 Feeling the Heat

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    Joe,

    Are you aware of any US or North American firms doing something like this Swedish firm which makes pellet burners?

    That would seem to be a great way to bridge the pellet technology conversion costs since according to the Varmebaronen website they can be adapted to many boilers so a homeowner might be able to replace the gun and install a feed mechanism but not the whole boiler.
  22. Sleepy

    Sleepy New Member

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    New guy here. I actually do fuel cost consulting for a living. I have considered installing a pellet stove several times in the last 15 years, but didn't when comparing the actual cost to use pellets vs my existing oil-fired system. 3 weeks ago after working on an energy audit for a customer, I discovered that I can now get twice as much heat (BTUs) per dollar with pellets than I can with oil.
    That was a Wednesday. The following Saturday afternoon I was firing up my new Mt Vernon AE. Each dollar I feed into it ($180/ton) returns 70,000 BTU in heat, vs. 35,000 BTU in oil ($3.10/gallon). Its all about ROI. If I use my AE for primary heat, I should see a payback in 2-3 years.
  23. webbie

    webbie Seasoned Moderator Staff Member

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    $180 is a lower price for pellets than most of our users are paying (delivered in place). In fact, quite a bit lower.

    Most forum members are reporting about 250 when delivery if figured in, or $220 to 240 picked up.

    A really rough guide is just to move a couple zeros. $180 a ton is equal to $1.80 oil. Again, rough, but good enough for some. So when the price starts getting over 250 delivered, it gets harder to get payback when the stove and other costs are figured in.

    I agree that many pellet stove users do it for the green. A whole bunch of others do it because they think they are saving money....but whether they actually are is sometimes in question. At prices under $200 and current higher prices for oil and LP, it starts to get interesting. But it is important to look over the past 10-15 years when the difference was usually much less.
  24. Sting

    Sting Feeling the Heat

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    Last year corn fuel was 70.00 a ton (now that was a payback engine) - this year its a bit more
  25. jebatty

    jebatty Minister of Fire

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    Feeling a need to ramble a bit . . . .

    Making an economic benefit decision on purchasing a durable appliance based upon the current price of a needed supply item (fuel) over which one has no control is very risky. The law of supply and demand will tend to equalize the price/total cost/benefit per btu of the various fuels. There will be new fuels and old fuels may phase out due to supply/cost issues. In the economic sense price/total cost/benefit of competitive goods will tend to equalize. Total cost includes price, storage, handling, maintenance, convenience, transportation, environmental considerations, etc. Benefit includes heat, ambiance, exercise, recreation, environmental, etc.

    Corn -- a new fuel, posed an economic advantage because it was in over-supply as an ag commodity, not a fuel. As soon as the new fuel market gained acceptance, the price rose due to increasing demand and, unless a relative over-supply continues, the price will continue to rise until it approximates the price/btu of alternative fuels.

    Pellets and other manufactured biofuels -- ditto, with the exception that pellet/bio material supply is likely to increase as additional bio sources become feasible, but again, over time price/total cost per btu will approximately equalize with alternative fuels.

    Wood -- ditto here to, subject to the relative over-supply in some markets compared to demand, resulting in a lower price. Wood has big disadvantages on current technology for the average consumer (no light it and forget, not mostly maintenance free), and the lower cost may continue for a time, but as technology changes to accept manufactured wood fuel (pellets, etc.) and as prices of alternative current major fuels rise, the price of wood and wood products for fuel also will rise. The lower price of wood as a fuel reflects the other costs inherent in use of wood as a fuel (handling, storage, convenience, maintenance, convenience, etc.), and one can easily argue that the total cost of wood per btu also approximates that of other fuels.

    Price/total cost of a good is an elusive concept and far more complex than the easily recognized components. For example, oil has been and remains relatively cheap in price due to direct subsidies, tax benefits for example, and indirect subsidies, no charge for adverse environmental consequences, for example. Similarly, the benefit of a good is elusive. For oil as a fuel, it may be little more than the energy derived. Ditto for wood as a fuel. But for one who owns his/her own woodlot, wood may be mostly a by-product of other highly valued benefits: shade, recreation, lumber, etc.

    While other comments have touched on the fact that there are considerations other than price in $, ROI is a much bigger concept, and limiting discussion of ROI only to current price/benefit in $ barely touches the tip of the much bigger iceberg.

    I would argue that living now in a very uncertain world (climate change, peak oil, water shortage, pandemic, pervasive world starvation and poverty and resulting terror threats), we need to be far more aware of our impact and the consequences of our behavior. Continuing as we have in the past offers a bleak future for our children, grandchildren, and successive generations, as well as all of the animals, plants and ecosystems which make up this place called earth. The earth is a system which we and natural forces are changing. The future is very uncertain based on our past and current behaviors.
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