WoodPellets.com stocks coffers for winter

When it comes to converting plants into usable energy, biofuels garner the bulk of attention and dollars. But there's a growing number of people using biomass for heating.

One company that's betting on continued growth is New Hampshire-based WoodPellets.com, which on Monday plans to disclose that it has raised $11 million to expand its online home wood pellet delivery service.

Click on this image for a photo gallery of assorted green home retrofits, including a pellet stove.

(Credit: Martin LaMonica/CNET Networks)

With the money, the 3-year-old e-commerce company plans to expand its distribution network to more places in the U.S. (right now, it works mainly in the Northeast) and to develop ways to do bulk shipments of pellets. Investors are venture capital firm 406 Ventures and private equity company Monitor Clipper Partners.

Pellets are made by compressing sawdust into small pellets that look a little bit like pet food for rabbits or guinea pigs. The appeal of heating by burning pellets is that it can be cheaper than heating with oil, it's a domestic fuel source, and it's less polluting, say proponents. There are currently 800,000 Americans that heat all or partially with pellet stoves, according to the Pellet Fuels Institute.

The fuel can be up to half as expensive as heating with oil and the payback on a stove, with small ones starting at about $2,000, can be two to five years, according to WoodPellets.com. (Disclosure: I am a customer.)

On the environmental front, pellet stoves are typically more efficient and burn more cleanly than older wood-burning stoves. The Pellet Fuels Institute claims that burning biomass in efficient stoves or boilers is carbon neutral since the growth of trees will absorb the carbon dioxide emissions from burning the wood.

The environmental picture isn't perfect, though. The level of particulate matter from burning pellets is higher than burning natural gas and oil. But particulars per million BTUs is lower than an EPA-certified wood stove and dramatically lower than burning wood in a fireplace or an uncertified wood stove, according to the EPA.

The source of wood is typically lumber mills, which sell sawdust for different wood products. Although there are well-documented cases of deforestation around the world, Strimling said forests in the U.S. are generally well managed, as landowners and forest management services have an interest in sustainable growth.

On the policy side, biomass heating this year received a significant policy boost--buyers are able to get a 30 percent tax credit on the purchase of stoves.

WoodPellets.com expects it can grow quickly simply by serving existing customers, many of whom buy pellets from big-box retail stores or from stove vendors. To buy pellets online at WoodPellets.com, consumers put their ZIP code in and get options for buying different types of pellets and for scheduling delivery.

The company developed the logistics software to track the availability of pellets for consumers in different regions from several different suppliers and different storage locations--which is "not an easy math problem," said Strimling.

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Right now, pellets are delivered in plastic bags--a stove could burn through a bag a day. WoodPellets.com is looking to develop a system where pellets are delivered in bulk from a truck and stored in a hopper in a basement or garage.

Another issue that has choked growth of biomass heating--and spiked the price of pellets--in the past is availability of fuel, but a number of new mills have come online in the past few years. According to a recent U.S. Department of Agriculture study, 1.1 million metric tons of pellets were produced in 2003, 4.2 million tons in 2008, and as much as 6.2 million tons in 2009.

[kieranmullen]

Need cost comparisons against natural gas.

[mlamonica]

Based on national averages, the Pellet Fuels Institute has pellets cheaper than natural gas (and oil) heating. But you should try to put in data from your area, which could change your results. The stoves themselves also run on electricity so that's a cost as well.

see here: http://www.pelletheat.org/3/residential/compareFuel.cfm

[pixelpusher220]

For those looking for comparisons of pellet stoves to natural gas, this months issue of Consumer Reports has that exact comparison. Don't have my copy handy, but it's worth a read. a 2 year payoff is way under their estimates.

[kbellve]

As long as oil is below $2.30/gallon, it is cheaper to heat your house with oil

My house uses ~130 gallons of oil/month in the dead of winter versus 1 ton of pellets/month.

1 ton of pellets was going for around $320 last winter.

130 gallons of oil * $2.27/gallon = $295.10 to heat with oil.

You can reduce the pellet costs by buying at the right time. I paid $279/ton delivered over the Summer. But, using pellets is work, while oil isn't.

130 gallons of oil has about 18,000,000 BTUs
1 ton of wood pellets has about 16,000,000 BTUs

Which means I am not heating my house as much with pellets which results in some parts of my house being colder.

[lixingchen]

Things to consider is installation and upkeep. Payback = 2-5 years is probably stretching it. I can hardly believe anyone trying to sell something!

[macoverdose_dot_com]

I bought a pellet stove last summer and used it exclusively this past winter (in Boston). It was worth every penny. Figuring in what it would have cost me to burn oil this past winter the stove and pellets almost paid for themselves already.

And an added bouns is that now I have 2 heat sources in my home... Not that I use both but its always nice to have options

[Keith_Mann]

I'm not quite as concerned about carbon as some, but assuming equal carbon usage in delivery (i.e., from the delivery trucks) I'm prepared to accept wood pellets as preferable to oil in that regard. Clearly, as long as every tree consumed for this purpose is replaced, then net carbon must be zero. A comparison to natural gas and electrical would require more investigation.

Cost appears competitive, at least given current prices, and shows a promise of greater resiliency to inflation due to shrinking supply and to fluctuation due to market forces. So, attractive there as well.

I suspect the real challenge to mass adoption is a matter of convenience. Unless and until an automatic, hopper-fed conversion burner that's basically a drop-in furnace replacement becomes available (perhaps there already is such a beast), this will remain a niche market. It is nevertheless something to consider for those looking for an alternative, and home builders might find it an interesting optional feature to offer.

[USDecliningDollar]

I find it interesting how for some reason, things "green" always have some dubious "payback" number associated with it. When I had a new patio installed this summer, I wasn't concerned about payback. The same goes for my car, iPhone, curtains, and any consumer yadda, yadda, yadda ... none of which ever have a "payback" associated with them. Anyhow, the green industry will do better once this idea of "payback" goes away.

There is or was a company here in Colorado which produced corn heaters - certainly a niche market, but other than ethanol boom year - corn for corn heaters was very cheap. Also, the corn heaters burned clean enough to pass the strict air pollution standards in and around Denver.

In any case, I think pellet stoves are great.

[Joe Real]

In some applications, payback makes no sense just like you concluded. There are many applications where payback makes sense to other people, such as this stove. We know that this will be an added expense over when you switch from your existing infrastructure. That added costs can be recouped by savings due to the switching and for how long will that be, is called the payback period. If it is such a short time, like a couple of years, it would really be worthwhile, because after the payback period would be true savings. And most people are more motivated in the long term savings than being truly green, carbin neutral or environmentally friendly.

[amadensor]

One advantage many miss is that pellets are made from sawdust and wood chips that would otherwise go to landfill. I own a pellet stove rather than corn because I prefer to burn trash over food.

I am on propane, and with what I have found from neighbors who also have pellet or corn stoves, and their reduced gas usage, the cost of the stove and installation will be covered in about 2 years. I will use less than half as much propane, and use about 3 tons of pellets a year. I live in a cold climate, so the guy who uses a tone per month may need some insulation work.

[sanenazok]

There are a lot of pressed wood products out there that use sawdust. Very little is wasted in for-profit businesses such as lumber mills.

[carlhage]

The question is, what percentage of households could replace gas/oil with pellets without a tremendous increase in price or requiring substantial land-use changes to grow wood? There is only a certain amount of byproduct wood dust/chips available-- how much is the actual supply? According to woodpellets.com growing trees for sole use in pellet stoves is not cost effective, and that's why it won't cause deforestation.

It may be cheaper than oil, but pellets (delivered by truckload in CA) cost $1.51/therm but gas is $.63 average.

[yepperdepper]

Watch the documentary 'KING CORN' and you will see that when you are burning corn you are indeed burning trash.

[disco-legend-zeke]

why not a cheap machine to make pellets from newsprint, which is presently about $20 a ton.

not to take recycled newspapers out of the mouths of cattle, which could eat cellulose and produce meat and milk. The only caveat here is that ink formulas might need modification.

[sanenazok]

I'm thinking of having a fireplace put in. What do these people use as a binding agent for the sawdust? I'm a little concerned about burning some weird adhesive. Just try burning plywood - it stinks from the glue. I figure the pellets aren't going to smell, but there's a lot of bad things out there that are odorless.

[USDecliningDollar]

I am the same ... i like the idea of pellet stoves, but i would rather know where my pellets came from, which is one reason why i would go for a corn stove. by the way, this corn is of the feed variety ... not something that anyone would want to eat. similar to calling hay "food" - but i suppose that with enough sugar, you could make something like a rhubarb pie. ;-)

[amadensor]

The wood itself is the binding agent. There is enough pressure to generate heat, and the sap in the wood actually binds it.

And the corn is food, at least indirect. You may not eat low moisture corn, but your food (chickens and cows) do eat it. Also, it is ground to be used as a food ingredient. I know, because my neighbors who have corn stoves buy it from the grain silo, exactly where the ranchers buy it.

If you are making your own low pressure sawdust logs (for a standard fireplace) wax makes a nice binder, like a giant candle. This is how duraflame logs are made.

[ErnieTheBear]

They don't specify, but I suspect they don't have any adhesives. The cell walls of wood contain "lignin", which is a sort of binding agent. It is released under heat and pressure, and that would be enough to hold the pellets together. That's also the "modern" way to make fake fireplace logs nowadays. Heat up the wood chips and then force them through a forming die under several tons of pressure.

[judeaugusta]

We hope to inspire more investment in domestic, renewable energy. Doing so reduces pollution, reduces dependence on foreign oil, increases National Security, and creates American jobs!


Jude Augusta
Director of Business Development
http://woodpellets.com
Wood Pellets Online Delivered Nationwide.

[Joe Real]

There are many farmers who regularly prune their fruit trees. Are there cheap and portable pelletizing machines available? If not, that could be one nice money making machine that can be invented or developed. Farmers should be able to sell pellets.

Even in my tiny yard for example, I regularly throw away many pruned materials from various trees, and so does our neighborhood. It seems to be very wasteful if you simply throw away the biomass from your yard. You water them, care for them, and then simply throw away? Our city picks up the biomass and send them off for composting in another city, a truly waste of resources when you should be able to pelletized them locally.

[Joe Real]

Farmers do have pelletizing machines for feed such as alfalfa hay. Perhaps a modification to process other agricultural residue for fuel.