Wood stoves - true cost saving

[Ashful]

So, I've been thinking about how "frugal" heating with wood really is. I mean, are we really saving money? I wanted to run some cost analysis, for various scenarios, from the guy who buys an expensive stove and all of his wood, to the DIY'er with an Englander. I think the data is interesting.

For the case of the oil burner, I assumed $160/year maintenance (what I pay for my service contract), and used numbers for the cost of heating with oil, published by the U.S. Energy Information Administration (EIA). The first is a statement released recently that the average homeowner heating with oil in the northeast spent $2087 on heating oil last year. I also used the EIA for my calculation of historic (and predicted) oil prices, which has them increasing $0.25 annually, with an intercept of -$24.40 in 1900.

The oil burner then takes the money they were going to put toward getting started in wood, and invests it. I compared the growth of this modest investment, minus the cost of buying oil and maintaining the oil burner each year, to the costs of starting up and maintaining wood burning. The investment growth rate came from my own 401k statement, in which my rather conservative investments had 10-year averaged annual returns between 5% and 13%, with a net yearly return of approximately 9% averaged over the last 10 years.

First, the case of the DIY'er, who may spend $1500 for a low-budget stove, build his own hearth, and install his own chimney. I put $500 in equipment, because even if he already owns a chainsaw, this is the guy who will surely be shopping for a better one, after getting into this hobby. Equipment can also include, PPE, hearth tools, whatever. I put only $150 for wood costs, as this guy scrounges his own, and is only paying fuels, fluids, chains, and depreciation on his equipment. I assumed this guy has only $50/year maintenance, whether it be gaskets, catalyst replacements, whatever. I also set this guy's oil burner maintenance real low, as he's not the type to have a service contract with the oil company, anyway.



So, this guy has spent about $6k on heating with wood, over a 20 year period. The guy who just kept his oil burner, and invested that wood stove start-up money has seen his investment grow to $12k, but with $3k'ish yearly oil bills, he's $36k in the hole. Heating with wood has saved this guy $30k over 20 years.

Scenario 2 is the polar opposite. This guy bought a new BK or Woodstock, had it professionally installed with a new hearth and chimney, and buys all of his wood. He also has a chimney sweep come out to service his stove and chimney each year. He does not need much equipment, other than a real expensive set of hearth tools, and a cheap Poulan from Lowes Depot. If he still used his oil burner, he would've had a maintenance contract on it, so that's figured in.



So, this guys investment has grown very nicely, because it was much larger to begin with. He's spent $23k on heating with wood (ouch!), while investing that money and spending the same $3k'ish/year on oil, he'd have been in the hole only $17k. Heating with oil would have been cheaper, for this guy.

The third guy is me. I inherited one stove with the house, and bought a second used. I had two chimneys relined at a net cost of $3k. I use MUCH more than average oil (previous owners paid $7k in 2011, but I had it down to $5k yearly average, on last calculation) to heat this joint, but I collect all of my own wood. I bought three new saws, cant hook, and some other fun stuff, but also sold two good saws, when figuring my equipment cost. I buy catalysts, and do have a pro check my chimneys from time to time, and figure my maintenance to average $100/year. I had a contract with my oil burner co. at $160/year. The 401k is a little irrelevant (I'm already putting away the maximum allowed by law), but I'm assuming I'd find some other place to stick that start-up money at similar rates, taxes ignored.



So, I'll spend just shy of $10k to heat this place with oil for 20 years. In the same time, that start-up money would grow to $31k, but I'd be $84k in the hole after subtracting out what I'd have spent on oil. Not bad!

I'm sure no one will be shy at poking holes in my analysis. Let me know if you want me to run your numbers.

 

[BrianK]

The bottom line isn't always the bottom line.

Its not just about "saving" money.

Its the security of knowing that if an ice storm or other unexpected event (or financial hardship?) knocks out power/natural gas/oil, I can still heat and cook indefinitely.

Its the exercise, the lifestyle, being outside, the smell of the wood from felling to CSS to burning, the joy of being able to provide something substantial towards the well being of hearth and home by the sweat of the brow, etc. All things that modern man is desperately missing and, consciously or not, craving.

 

[My Oslo heats my home]

I have had my current stove since 2008. The initial costs might be high considering but the long term results are better. I might put 100+/- a year on maint issues (seals, burn plates etc). Chimney sweep and chain saw costs. The wood is mostly free, and after doing this for 10 years or so now I have been able to stockpile my supply to at least 2 years in advance now.
After looking at this in "my head" and not on paper, I would definitely say its worth it.

 

[CTPipeDream]

Brian k I couldn't have said it better myself. There many intangables of burning wood that can't be quantified in a dollar amount. In ct last year when we had the big ice storm and everyone was out of power for a week plus I was sure glad we had the woodstove. Bottom line is you either pay out of your wallet or you pay with your sweat when it comes to home heating.

 

[BrianK]

Here's my analysis:

I paid $950 for a lightly used used Woodstock Fireview and installed a new $120 CAT, I have $1500 in the Class A flue, stove pipe and install, I had a Stihl MS250 already but spent $400 on an additional Farm Boss, I have almost $1000 in my diesel powered splitter and spend $1000 for my 16x6 dual axle trailer (which replaced an enclosed trailer I already owned, $0 net). I've bought a cant hook, helmet/eyeshield/ear protector unit and chainsaw chaps, and various other sharpeners, tools and things that all add up to several hundred dollars. Then there's gas and oil for the saws, splitter, truck to trailer the wood, etc. That's about ~$4300 investment to get into wood burning.

Our budgeted natural gas bill has dropped about $120 per month since we installed the stove in January 2012. That's $1400 per year.

So my initial investment is paid off in about three years. We're already 1.5 years into that. In another 1.5 years, I hope to use the savings to finally insulate this drafty old house and replace windows and doors.

In the meantime wood burning has been immensely satisfying, and the peace of mind it brings me cannot be given a monetary quantification.

 

[firecracker_77]

Here's my analysis:

I paid $950 for a lightly used used Woodstock Fireview and installed a new $120 CAT, I have $1500 in the Class A flue, stove pipe and install, I had a Stihl MS250 already but spent $400 on an additional Farm Boss, I have almost $1000 in my diesel powered splitter and spend $1000 for my 16x6 dual axle trailer (which replaced an enclosed trailer I already owned, $0 net). I've bought a cant hook, helmet/eyeshield/ear protector unit and chainsaw chaps, and various other sharpeners, tools and things that all add up to several hundred dollars. Then there's gas and oil for the saws, splitter, truck to trailer the wood, etc. That's about ~$4300 investment to get into wood burning.

Our budgeted natural gas bill has dropped about $120 per month since we installed the stove in January 2012. That's $1400 per year.

So my initial investment is paid off in about three years. We're already 1.5 years into that. In another 1.5 years, I hope to use the savings to finally insulate this drafty old house and replace windows and doors.

In the meantime wood burning has been immensely satisfying, and the peace of mind it brings me cannot be given a monetary quantification.

I agree with the last line. And you've been warmer than you would have been if you were paying for the thermostat.

 

[Ashful]

Hey guys... I wasn't stating there aren't other reasons for burning. In fact I've said many times myself, that I'd be burning if it COST me money, which so far (2 years in), it has! You're ignoring the point of the OP, and preaching to the choir, on other valid reasons for burning wood.

I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation. Small changes make big differences, extrapolated over 20 years.



So, I'll only save $12k over 20 years burning wood. Hardly worth it, in my situation, if I didn't enjoy the work and exercise.

 

[firecracker_77]

Hey guys... I wasn't stating there aren't other reasons for burning. In fact I've said many times myself, that I'd be burning if it COST me money, which so far (2 years in), it has! You're ignoring the point of the OP, and preaching to the choir, on other valid reasons for burning wood.

I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation. Small changes make big differences, extrapolated over 20 years.

View attachment 109892

So, I'll only save $12k over 20 years burning wood. Hardly worth it, in my situation, if I didn't enjoy the work and exercise.

I agree. I hear you...you will be better off. And if you live in heating oil territory, it's the only way to go if you have access to trees.

 

[heatwise]

Interesting thread, I did tally up everything years ago . My latest calculations show me spending $600 a year to heat our house. This includes 3 stoves which one is brand new and never used . Each year the cost will go down if we don't buy a different stove or anything else . I say it's worked out well for us.

 

[Ashful]

Interesting thread, I did tally up everything years ago . My latest calculations show me spending $600 a year to heat our house. This includes 3 stoves which one is brand new and never used . Each year the cost will go down if we don't buy a different stove or anything else . I say it's worked out well for us.

But the question is, what was your initial investment, and how much would you spending on the alternative heat? That's the key to determining if your initial investment is doing well in wood, or if you'd have been better off putting it elsewhere.

 

[SteveKG]

I also forgot the $1k I spent on a splitter, and the fact that I still plan on using somewhere close to $2500 gallons of fuel this year (even with burning two stoves), so here's the updated analysis for my particular situation.

View attachment 109892

So, I'll only save $12k over 20 years burning wood. Hardly worth it, in my situation, if I didn't enjoy the work and exercise.

Wait a minute. $2500 a year in oil even with two stoves? I would recommend moving somewhere warmer!!

 

[Huntindog1]

Here is my investment:

Stove $599 onsale

Misc hookup pipe $50.

Already had a nice condition masonry flue to use.

Already had a chainsaw.

Bought a wood splitter $900

Got $300 from Gov. Rebate program

Total cost $1249

Savings over electric baseboard heat $1200 - $1500 a year.

Investment was paid for in first year from the savings.

 

[Ashful]

Wait a minute. $2500 a year in oil even with two stoves? I would recommend moving somewhere warmer!!

Moderate climate, big leaky house. We're making improvements on that, each year, but will never be completely oil free. Last year I burned 5.5 cords + 960 gallons of oil + 50 gallons propane.

 

[heatwise]

Ok,the investment in upgrading our heat system in the house and pay for gas heat would have been a greater expense to us than our current wood set up.

 

[Ashful]

Here is my investment:

Stove $599 onsale

Misc hookup pipe $50.

Already had a nice condition masonry flue to use.

Already had a chainsaw.

Bought a wood splitter $900

Got $300 from Gov. Rebate program

Total cost $1249

Savings over electric baseboard heat $1200 - $1500 a year.

Investment was paid for in first year from the savings.

Not sure what you mean by "total cost", or what you consider your wood collection cost to be, but here's what I figure for you. Stove install is figured as $599(+6% tax) + $50 - $300.

The big inaccuracy here is that I'm assuming $0.25 increase in oil cost per year (normalized to your cost of $1350 for 2012), which is fairly accurate for oil, but perhaps not accurate at all for your electric heating cost. In any case, based on this, I see you as spending $5400 for 20 years of wood heat, versus $22,600 for your "oil". You'll save somewhere near $17k heating with wood for 20 years, versus investing your initial $384 at 9% annual return.



Once you get away from oil, my system is not accurate. In fact, since I'm not considering all taxes, etc., my analysis is not super-accurate in any way. But it's close enough to give some idea of where you land, in the grand scheme. The biggest factor seems to be the cost of initial investment versus on-going wood procurement costs (duh). A big initial investment favors putting it in a mutual fund and continuing to use your mainstream heating (oil,electric), particularly if you have to buy your wood. If you can do your install less expensively, and pay for wood with sweat and 2-stroke mix, then you can save upwards of $20k over 20 years by heating with wood. No great surprise, there.

 

[Butcher]

I dont figure I'll ever get a payback for burning wood around here. L.P. is cheap in the midwest. But that being said, I like to cut wood and have a feeling of self when it comes down to it. I dont have to reliy on some speculater driving up the cost to heat my home and when the lights go out I can cook, keep warm and tell everyone else to, well, you know.

 

[firecracker_77]

Unless your axes and saws were given to you, I think it's only fair to throw those into the equation. The other problem with this is we're not comparing apples to apples. I roast with my stove...somewhere north of 75 degrees much of the time. I would never do that with a furnace.

 

[Huntindog1]

Bottom line I dont really figure any cost for gathering my wood as its my hobby for fun. I save that $400 fitness center membership. LoL

I already saved enough money to cover my initial investment.

I dont have to pay the electric company $1200 to $1500 a year.

 

[firecracker_77]

Bottom line I dont really figure any cost for gathering my wood as its my hobby for fun. I save that $400 fitness center membership. LoL

I already saved enough money to cover my initial investment.

I dont have to pay the electric company $1200 to $1500 a year.

Yeah...and cheaper than playing golf or membership to a country club.

 

[Ashful]

Unless your axes and saws were given to you, I think it's only fair to throw those into the equation.

I did. See "equipment" field.

The other problem with this is we're not comparing apples to apples. I roast with my stove...somewhere north of 75 degrees much of the time. I would never do that with a furnace.

True. Again, you're missing the point. This is just a simple look at some rough numbers, not a detailed analysis of your personal situation.

Yeah...and cheaper than playing golf or membership to a country club.

Yeah, but a membership to the country club includes the use of many other facilities... and a few very good meals thrown into the monthly fee, as well.

 

[firecracker_77]

I did. See "equipment" field.



True. Again, you're missing the point. This is just a simple look at some rough numbers, not a detailed analysis of your personal situation.



Yeah, but a membership to the country club includes the use of many other facilities... and a few very good meals thrown into the monthly fee, as well.

I was just saying to others to include the cost of axes, saws, chaps, mauls, etc. I know you had that all in there. It's easy to say...my stove was $3,000 and I paid for it in 2 years...meanwhile, there's a shop full of saws, chains, files, etc that are worth a couple grand.

 

[Thomas Anderson]

You failed to compound inflation... it is not a linear additional cost every year but an exponential one. Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future. I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events. Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind. You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc. Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable. And if taxes go up in the future, that's another variable in your risk equation. If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks. You don't have that with oil or electric or gas. This is especially important if you're on a fixed income or fear that you may be downsized at some point. The last thing you need is an inflated heating bill at the perfectly inopportune time. So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me. Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.

 

[Jags]

I can make it real easy. All my equipment has been paid off years ago. Going forward...I save over 1000 gal of propane per year.

 

[Ashful]

You failed to compound inflation... it is not a linear additional cost every year but an exponential one.

It's not that I forgot to include it, but that it really did not factor into this. Increasing oil cost is largely independent of inflation. When viewing the last 10 years the hard data used in this example, it's a fairly linear trend. The regression line drawn fits P = 0.25*D-24.4, where D = todays date minus Jan. 1, 1900. It's plenty close enough for the purpose of this analysis, as the simple week-week variation in price is way beyond the error in the trend line.

 

[firecracker_77]

You failed to compound inflation... it is not a linear additional cost every year but an exponential one. Also, it's hard to predict exactly where inflation is going, but since the Federal Reserve tripled the money supply in the past five years, it's a fair bet it's going much higher in the not-too-distant future. I don't see burning wood as superior in cost if you assume that inflation is muted and oil prices will never be impacted by black swan events. Instead, wood is a matter of self-sufficiency, so the return is measured not in dollars, but in peace of mind. You know that you'll be okay even if global war erupts in response to Syria or some other tinderbox in the Middle East or elsewhere or if global trade breaks down or if the currency hyperinflates or if government imposes crazy environmental laws on coal/oil/gas extraction, etc. Also as alluded to above, you pay income and sales taxes on your purchases of oil and other fossil fuels, but your labor to cut wood is non-taxable. And if taxes go up in the future, that's another variable in your risk equation. If you have a good stove, a chainsaw, and a reliable wood lot or other source of wood, then you have visibility into your future costs and risks. You don't have that with oil or electric or gas. This is especially important if you're on a fixed income or fear that you may be downsized at some point. The last thing you need is an inflated heating bill at the perfectly inopportune time. So calculating the savings (or costs) using a baseline set of assumptions doesn't really do much for me. Of course you do have to consider the possibility of no longer being able to cut wood due to injury or illness, and for this reason, wood burning remains a backup heat source for me along with propane, while solar is my primary.

It's interesting to mention the money supply...we have not really seen higher prices. I bought metals some years ago and they fell off too. We live in a casino economy where all is manipulated.