Wood chips and sawdust (top) before being processed into wood pellets at Maine Wood Pellet Company in Athens (Photo courtesy Maine Wood Pellet Company). George Haselton of Rockport Mechanical (inset) inspects the fuel usage of a pellet boiler. (Photo by Andy O’Brien)
Wood chips and sawdust (top) before being processed into wood pellets at Maine Wood Pellet Company in Athens (Photo courtesy Maine Wood Pellet Company). George Haselton of Rockport Mechanical (inset) inspects the fuel usage of a pellet boiler. (Photo by Andy O’Brien)
In 2012, when Ret and Karen Talbot moved from California to a drafty, 100-year-old house in Rockland, the couple knew that they had some work ahead of them. The house needed renovations and it wasn't well insulated, but the most pressing issue was the deteriorating oil burner in the basement. During their first winter, it burned 1,500 gallons of oil and, at $3.60 a gallon, that hurt.

"We knew that we wanted to get away from oil if at all possible," said Ret Talbot. "It was just a matter of deciding how we were going to do it."

Talbot decided to call in George Haselton of Rockport Mechanical, a contracting firm specializing in all types of heat sources, from oil and gas to air-source heat pumps, solar thermal and geothermal. Air-source heat pumps have become all the rage lately, but Haselton noted that the couple only needed a heating system and weren't interested in a cooling function. The Talbots also travel a lot for their jobs and needed a system that could feed itself and that they could monitor remotely. Haselton recommended that they install a new boiler. But unlike conventional boilers that rely on fossil fuel imported from overseas, the one he recommended is fueled by little pellets made from round wood produced in Athens, Maine.

A Growing Market for Wood Pellet Fuel

According to the latest census figures, about 390,000 Maine homes, or over 70 percent, are heated with oil. About 65,000 homes used wood heat in 2012, which is an increase of 18,000 more homes from the year before. But pellet boilers have only very recently been introduced to Maine. According to Ryan Hamilton, managing partner of Interphase Energy, in 2008 an average pellet boiler cost about $20,000 and was unaffordable to most Mainers. After only selling around 24 units in six years, Hamilton said his company needed a lower-cost alternative and ended up traveling to Denmark to find what some would call the "Model T" of pellet boilers.

"[Kedel] had already identified Maine as a lead market for the industry because of the pellet mills and the delivery infrastructure that's already in place, meaning there would be prompt delivery for houses. In most of the US it doesn't have that advantage," said Hamilton.

Although fewer than 1,000 pellet boilers have been installed in Maine so far, with four pellet mills across the state, 500 certified boiler installers, and fleets of bulk delivery trucks, it's an industry that's growing. Last year, as part of the so-called "omnibus energy bill," the Legislature appropriated $3 million from Regional Greenhouse Gas Initiative (RGGI) revenue to fund low-cost heating rebates for appliances, including a $5,000 rebate for pellet boilers. According to Efficiency Maine, since the program began last September, 178 pellet boilers have been installed through the rebate program.

"The curve has continued to go upwards since more and more people have heard about it," said Bill Bell, executive director of the Maine Pellet Fuels Association. "Right now we're installing an average of one a day."

According to the Wood Pellet Fuels Association, the cost of a pellet boiler ranges from $15,000 to $20,000, but with the new state rebate, the cost drops to $10,000 to $15,000. According to Haselton, the total cost of a pellet boiler, including installation, is usually $3,000 to $5,000 more than a comparably efficient fossil-fuel boiler. But with the average Maine household spending over $3,000 a year on heating, wood pellets are still competitive in the long term. According to the Governor's Energy Office, measured in British thermal units (BTUs), pellets are about $14.67 (at $242/ton), which is about half the cost of heating oil and about $3 more than cord wood.

According to Ret, after the house was finally insulated and the radiators restored, the new boiler has burned nearly three tons of wood pellets since last winter, at a cost of $240 a ton. By Haselton's estimates, the Talbots are saving about 50 percent on heating, although he said most homeowners would save closer to 40 percent compared to a conventional boiler.

Said Haselton, "We have plenty of experience in all of the options, and I'm looking at [pellet boilers] as the best solution for Maine."

How They Work

While conventional wood and pellet stoves require constant attention and only heat the immediate area of a house, the new pellet boilers are fed automatically from storage hoppers and can be connected to a central heating and water system. Pellet fuel is delivered in bulk by trucks just like fuel oil and pumped directly into massive storage silos. The pellets are then metered out of the silo into the combuster just like oil or gas. Some of the new boilers, like the Talbots', are also self-cleaning and only require annual routine maintenance like other central heating systems.

The Talbots' boiler is also connected to the Internet, so that both Talbot and Haselton can monitor the oxygen levels and smoke temperatures, gauge whether it's overfeeding and then make adjustments from a computer or even their smartphones using a special app.
Although wood pellet stoves and boilers have only recently made a dent in the American market, they have been widely popular in Europe, heating an estimated 80 percent of new homes in Sweden and 76 percent of new homes in Austria. According to the US Census, wood was the primary heating source in Maine up until the 1950s, but as fuel oil became a cheaper alternative, woodstove use decreased. By 2000, only six percent of homes heated with wood. But as higher fuel oil prices drove people to seek other alternatives, wood heating grew by 96 percent in Maine between 2000 and 2010.

"Not for Everyone"

Haselton is also quick to point out that pellet heating, like any other fuel source, has its drawbacks.

"Pellets aren't for everyone, just like heat pumps aren't for everyone, just like natural gas isn't for everyone," he said.

In addition to the higher upfront cost, pellet boilers also require a substantial amount of space to accommodate the 3-ton storage hoppers for pellets, unless you don't mind carrying around big bags of pellets all winter long.

"If your house has a very low load, it's very well insulated, and you leave the country for two to three months at a time, go to the heat pump system," said Haselton. "Those work down to minus 15 to 20 degrees, but they're not quite as green. Your electricity is still coming from oil, gas, coal, etc."

There have been some hiccups with large retailers failing to meet the high demand for wood pellets, particularly last winter when there were pellet shortages on the retail side, but notably not on the manufacturing side. Some pellet boilers require daily cleaning to clean out the ash. There can also be some variability in the quality of pellets, depending on how they are manufactured and whether they have been exposed to moisture.

The Carbon Question

Proponents of pellet heating argue that pellet heating is potentially carbon neutral because the carbon emitted by burning pellets gets sequestered by planting new forests. But that is a topic of intense debate. A 2010 report by the Manomet Center for Conservation Sciences for the Massachusetts Department of Energy Resources stated that burning biomass, such as wood pellets and wood chips, releases so much CO2 into the air that it actually creates a net increase in greenhouse gases if it isn't retired within 20 to 25 years. The report concluded that net emissions from utility-scale biomass plants are higher than fossil fuels, but that emissions from thermal biomass is likely lower due to its higher efficiency, but still higher than natural gas.

The researchers stated that the amount of "carbon debt" accrued by burning wood for heat really depends on the combustion technology and the biophysical and forest management characteristics of the forests where the wood is harvested. It also depends on whether fuel is regrown at the same rate at which it is harvested.

"The best way to think of this subject is whether choosing an alternative would have a beneficial effect on climate and over what time will that effect take place," said Robert Perschel at the New England Forestry Foundation. "Most agree that forest biomass when derived from sustainably managed woodlots and utilized in efficient modern equipment to heat homes or buildings has a beneficial effect on atmospheric carbon levels within 20 years."

The Future of Pellet Heating

Maine's emerging pellet heating market has attracted a range of entrepreneurs, from mission-driven companies like ReVision Heat and Interphase Energy, which have become evangelists for reducing fossil-fuel use in the face of climate change, to former conservative gubernatorial candidate and Maine Energy Systems founder Les Otten.

"I'm a Republican. I'm a capitalist, and I don't know if I believe in global warming," said Otten in his opening remarks at the Northeast Biomass Heating Expo, held in Portland last month. "But what I do understand is that we're about to use up a single resource that was put on this planet once in our piggy little generation and we shouldn't do that."

But while some cheerleaders for biomass heating have deemed Maine the "Saudi Arabia of wood pellets," Haselton at Rockport Mechanical says we need to approach the technology carefully in order to try to avoid some of the mistakes that happened, for example, in the "mad rush" to install heat pumps due to the shoddy work of some installers. After attending a training workshop in Denmark, he observed that Scandinavians take a more hands-on approach with their heating appliances, cleaning and emptying the ashes, whereas Americans would prefer to turn on the thermostat and walk away. He said it will take a little time for Americans to become accustomed to European technology.

"They're more ready to do it in Scandinavian countries where oil is pushing $10 a gallon," said Haselton. "You get very ready to change ashes at that price. One would say that oil is too inexpensive in the United States and that's why we're not making this adaptation yet."