Why is the Northern Forest Center promoting wood heat?

The Northern Forest Center promotes wood heat because it can deliver direct economic and community benefits for the region. The Center believes that a robust regional economy is central to the health of Northern Forest communities and ecosystems, and that integrated approaches to economic, community and environmental issues are fundamental to creating new opportunities for the region. The Model Neighborhood Wood Heat Initiative delivers in all three of these areas.

Improvements in technology, particularly efficiency and air quality, have made wood heat “new” again and created opportunities to expand pellet production, an important slice of the forest products economy. The convenience factor—no need to manually feed wood stoves or pellet stoves--makes new, fully automated wood pellet boilers attractive to businesses and homeowners and promises an expanded market for wood fuel.

Increased demand for wood pellets creates a stronger market for the byproducts of good forestry, helping forestland owners offset the costs of long-term stewardship. In addition to income for forestland owners and savings for pellet boiler users, other community benefits include jobs in pellet production, forestry, logging, and trucking; jobs in pellet boiler manufacturing, installation and maintenance; and a net reduction in carbon dioxide emissions into the atmosphere.

Summary of state and Northern Forest financial incentives for wood pellet boilers

About Pellet Boilers

What’s a modern wood pellet boiler?

These systems are virtually seamless replacements for traditional oil-based systems. Minimal changes to the home heating system are required (depending on distribution system), and your oil boiler can remain in place if flue space allows. This graphic from the German Renewable Energy Agency shows one type of typical installation:

diagram of wood pellet heating system

How is a pellet boiler different from other types of wood heat, like pellet stoves or outdoor wood boilers?

Compared to wood stoves and pellet stoves, automated pellet boilers require little hands-on tending and maintenance by the homeowner. There is no cordwood or pellet bag to haul. Also, since these boilers modulate their combustion they are significantly more efficient than other wood heating systems.

What are the main advantages of pellet boilers?

  • Local Economic Benefits: Heating with Northern Forest pellets retains wealth on our communities instead of sending it elsewhere (78% of money spent on oil leaves the region) and creates or sustains jobs. 
  • Renewable: The forest resource is renewable and locally available, and provides a more stable source compared to imported fuels traveling through global transportation networks.
  • Fuel Cost and Stability: Wood pellets cost about the same or slightly less than oil today, but just a year ago - when oil approached $4/gallon - they cost over 40% less. The cost of wood pellets is far more stable than fossil fuels, making budgeting easier. 
  • Consumer Convenience: Modern wood pellet boilers are automatically fed by contained storage bins and refilled by bulk delivery trucks on a regular basis – no pellet handling is involved, and maintenance is minimal.
  • Carbon Footprint: As discussed below, using wood heat instead of fossil fuels leads to a net reduction in carbon dioxide emissions over time.
  • Cultural Connection: Many northern communities have a rich forestry legacy and residents feel proud to support it.
  • Particulate Emissions: Replacing an outdoor wood boiler or wood stove with a modern pellet boiler dramatically reduces a household’s particulate emissions.

We track the local environmental and economic benefits of our program in our Regional Dashboard

How much does it cost to heat with a pellet boiler?

Cost depends on how much fuel you use and how much alternative fuels cost. Estimate your own cost savings using this fuel cost calculator.

Are these systems proven to work?

Yes. They’ve been used in Europe for over a decade, and there are tens of thousands installed around the world. See this 2009 report by Intelligent Energy Europe for more details. Over 50,000 were installed at the time of publication. According to boiler distributors, that number has grown exponentially since.

How much maintenance does a pellet boiler require?

That depends on the system. The most automated pellet boilers require homeowners to spend just a few minutes of time every 3-4 weeks to empty an ash box, plus an annual maintenance check-up. Others require a little more hands-on time, but much less than is required by a pellet stove or outdoor wood boiler.

Can I keep my oil or propane boiler?

Yes, if your basement space allows.

What if I have a steam or forced hot air distribution system?

A new wood pellet furnace (hot air) is now available in the US. Most pellet boiler models are designed for hot water distribution, but some can be adapted for steam or forced hot air systems. Local boiler vendors will be able to tell you what options exist for your home.

Can a pellet boiler heat my hot water too?

Yes, it is often connected to and domestic hot water tank.

How long will the pellet boiler last?

According to the manufacturers of the boilers, these systems are expected to last at least 20 years.

When are wood chip systems appropriate instead of pellets?

Pellet systems are most economical for residences and small commercial-scale buildings. At a larger scale, it becomes more cost-effective to use wood chip heating systems. Newly available "semi-dry" chips offer a new alternative for buildings that fall into the middle range.

What are the downsides of heating with pellets, and what’s being done to address them?

Like any fuel source, pellet heat isn't completely benign.

  • Burning wood releases air pollutants, but high-efficiency modern systems emit just marginally more particulates than oil or gas heating systems. See below section on air quality.
  • Forest resources are limited. Conservative estimates suggest that only 18.5% of the Northeast could be sustainably heated with wood, but we are nowhere close to that level and the region’s forests are currently growing more than they are being harvested.
  • The carbon impact of wood heat is variable. Accurate carbon accounting must consider factors such as time, land use change, forest management practices, and the type of fuel being displaced. Wood is a low carbon fuel when harvested sustainably from land that is managed well over time.

Choosing and Paying for a System

How do I find a pellet boiler?

A number of pellet boilers are currently on the market. Research the different models and contact distributors to identify the installer(s) nearest you. Those listed below meet basic automation, emissions, and air quality standards (as defined by New Hampshire’s pellet boiler rebate program). The Center does not endorse any particular brand.

What should I consider when choosing a pellet boiler brands?

Some boiler types require more hands-on cleaning than others. Safety features, online monitoring capability, burner design, and combustion controls also vary. Also consider how long the boiler has been on the market in Europe and the U.S. and how much experience the installer has. Distributors and installers will be able to explain what distinguishes their product apart from the others.

Who will install and maintain the system?

Boiler distributors have trained installers across the Northeast. Contact the distributors to find the installers nearest you. This person will also provide maintenance services.

Does home insurance cover pellet boilers?

The U.S. Department of Housing and Urban Development has now classified wood pellet boilers as a “conventional, primary heating source” eligible for Federal Housing Authority funding – an important signal to the marketplace that these are not risky appliances. Some insurers remain leery of wood pellet boilers, even though the systems are proven to be safe and effective for whole-house heating without a backup fuel source. Others - including Liberty Mutual, American National / Farm Family, and MMG - are becoming comfortable with these systems and will cover them. You may want to double-check with your insurance provider to ensure that it covers the pellet boiler as a primary heating source; if not, This email address is being protected from spambots. You need JavaScript enabled to view it. and we can provide information to the company that may lead them to accept it.

How much does a pellet boiler cost?

Residential projects that the Center has supported average $18,000 including installation and incidentals. By comparison, the installed cost of a top quality oil boiler is about $12,000. Installation costs vary greatly by project based on factors such as basement and existing heating system conditions, and additional features (e.g. thermal storage tanks to improve efficiency or different types of pellet storage).Read below about incentives that can help reduce the total cost of a pellet boiler system.

Are there special programs or loans to help me pay for a pellet boiler?

There are more incentives for wood heat than ever before, and the Center continues to advocate for additional state and federal funding. Download this chart to see current incentives, including those associated with the Center's Model Neighborhood Project. Another resource is DSIRE, the Database of State Incentives for Renewables and Efficiency. Federal tax credits similar to those offered for solar and wind power are not yet available but the "Biomass Thermal Utilization Act" currently being debated in Congress would change this.

What about financing options?

  • Many banks and credit unions offer home improvement loans, personal loans or home equity lines of credit for pellet boiler installations. Some have "green" options with lower interest rates and/or other appealing features. Ask your local lender about what's available.
  • Efficiency MaineEfficiency Vermont, and NYSERDA in New York all have special programs to help homeowners finance energy improvements at attractive rates.
  • At least two lenders - Home Loan Investment Bank and Admirals Bank - offer FHA Title 1 Home Improvement Loans for pellet boiler installations.


Where do the pellets come from?

A number of wood pellet mills serve the Northern Forest region:

What kind of wood is used in pellets?

Both hardwood and softwood can be used, and the wood comes from many different sources. The wood is typically “low-grade” – that is, lower quality than what’s used for other wood products (e.g. furniture or lumber). Creating a market for low-grade wood makes forestry more profitable – thus the pellet industry helps sustain and create forestry jobs. Sawdust and wood chips can also be processed into pellets. Northeastern forests are never harvested just for energy uses, though, because the material has such low value – the wood used for pellets or chips is a secondary product from forests harvested for more valuable wood. See below for more information about biomass harvesting.

How are pellets made?

Raw wood may be processed in mills and dryers before being pressed through high-pressure dies to create pellets of uniform size and moisture level. Natural lignins released in the process are what hold each pellet together, not plastics or other additives. Pellets in the Northeast contain 100% raw wood, with no additives and no recycled wood content that could contain contaminants. Regular testing at each mill confirms that their pellets are “pure.”

What are premium pellets?

There are two different grades of pellets. "Premium" pellets have less than 1% ash content and make up about 95% of pellets on the market, while standard pellets have less than 3% and can only be used in systems designed to accommodate higher ash content. Tree bark and agricultural residues in pellets are what typically increase the amount of ash, according to the Pellet Fuels Institute (PFI). Most pellet mills currently test their own products to demonstrate compliance with Pellet Fuel Institute standards; some have been third-party certified and allowed to use the PFI Quality Mark.

Who delivers pellets in bulk?

The main bulk delivery companies are listed below, with their general coverage areas indicated – though they may be willing to deliver further than the areas listed, so it doesn’t hurt to give them a call if you are comparing prices. Some of these companies deliver to southern New England as well. New suppliers may become available; please let us know of any serving Maine, NH, VT and New York that are not listed.

Where would I store the pellets?

Pellets are usually stored in fabric, steel or wood bins in the homeowner’s basement or garage, or in outdoor silos. Installers will help you determine the best storage solution for your home.

Can I use grass or some other kind of pellets?

Only premium wood pellets can be used in the automated wood pellet boilers currently on the market.

Are pellet prices stable?

Prices have been significantly more stable than fossil fuels for over a decade. The cost increased by 100% from 1999 to 2013 while oil increased by 350% and propane by 302%, as shown in this graph.

Fuel Cost Comparison

Pellets have been consistently less expensive than oil, propane, or electric heat, as shown in this graph; at times they have also been more affordable than natural gas. However, the recent decline in oil prices has made pellets about comparable to fossil fuels.

dollars per btu

What are state and federal governments doing to support wood heat?

State and federal energy policy is focused predominantly on transportation fuels and electricity, not on heating. Yet it is in thermal energy use that the Northern Forest has the most to gain (or lose). The Northeast consumes 84% of the entire U.S. supply of home heating oil—5.5 billion gallons annually. Buying this oil sends $10 billion out of the region each year.

Substituting sustainably produced energy from wood for even a portion of this oil use can benefit the Northern Forest region by reducing its reliance on imported oil, strengthening the economic basis for sustainable forestry in the region, and creating new economic opportunities for Northern Forest communities.

To complement its own biomass energy programming, the Center works with partners across the region and beyond to identify and advocate for ways that federal and state energy policy can support the region in realizing this potential. These policies include state pellet boiler rebate programs and federal tax credits, for example.

This report, written by the Biomass Energy Resource Center for the Northern Forest Center, examines how existing state policy does or does not promote biomass heating in the Northern Forest states and makes recommendations for how Maine, New Hampshire, Vermont and New York can use public policy to advance biomass thermal energy.

Read the report, Thermal Energy Policy Opportunities in the Northern Forest

Health and Environment

What are the carbon impacts of heating with wood?

Wood can be a low-carbon fuel when harvested sustainably from land that is well-managed over time. Wood energy has often been referred to as “carbon neutral” because the carbon emitted when the wood is burned can be recaptured by new forest growth, but this assumption is overly simplistic. Accurate carbon accounting must consider factors such as time, land use change, forest management practices, and the type of fuel being displaced by biomass. Our blog post "Modern Wood Heat Delivers Fast Carbon Payback" from December 2015 addresses this issue head-on.

Are there air quality issues with heating with wood?

Modern wood heating appliances, including the pellet boilers for which the Center advocates, have pollution controls and high efficiency ratings that minimize negative health effects – the chart below shows how they measure up to other forms of wood heat. Some forms of wood heat – particularly older, inefficient wood stoves and outdoor wood boilers – can cause air quality and health problems, as described by the EPA

emissions of pellet boilers

Are forests being sustainably harvested to supply wood for heat?

Many lands are harvested in accordance with forest management plans, but the degree to which forests are managed sustainability is hard to quantify across the board.

Several pellet manufacturers use Forest Stewardship Council (FSC) or other third-party certifications to ensure that, for at least a portion of the feedstock for their mills, the forests producing wood for the pellets are harvested sustainably. Other mills monitor their supply independently. Foresters generally strive to comply with states’ best management practices (BMPs), which were designed to protect water quality. (The BMPs are only mandatory on Vermont land enrolled in the state’s “current use” program.) Some states have also developed biomass harvesting guidelines, but have not yet set mandatory standards. In addition, organizations such as the Forest Guild have developed Forest Biomass Retention and Harvesting Guidelines.

Part of the challenge in ensuring sustainable biomass harvest is a lack of “definitive and prescriptive scientific research to guide biomass harvesting,” as discussed in this 2012 report by the North East State Foresters Association. Also, forests are rarely harvested just for biomass and so it is difficult to develop biomass-specific guidelines; sustainability measures would need to be applied to integrated harvesting operations.

Characteristics of sustainable forestry include long-term planning, minimizing the environmental impact of logging operations, and harvesting with biological diversity, soil productivity, and water quality in mind. A forest that is sustainably managed retains its ecological and economic value over time; logging does not compromise its long-term viability. A 2011 Yale Forest Forum publication discusses this concept in greater depth as it relates to biomass. The “Economic Importance and Wood Flows of the States of Maine, New Hampshire, Vermont, and New York, 2013” reports released by the North East State Foresters Association provide state-level detail on harvesting practices.

Will there be enough wood for pellet heat in the long run?

Wood could not sustainably heat the entire Northeast, but it could be used much more widely than it is now. A 2010 report by the Biomass Thermal Energy Council estimated conservatively that 18.5% of the northeastern U.S. could be heated with wood without over-taxing native forests; currently only 4% of heat in the region comes from wood. Of course, changing markets for wood products could affect the amount of wood available for heat.

Overall, growth exceeds harvest in the Northeastern states – that is, forests are growing by volume more than they are being harvested. State reports released by the North East State Foresters Association provide detail on this matter.

How does wood heat compare to wood-based electricity?

Using wood for heat is more efficient than using it for electricity. Pellet boilers have a maximum combustion efficiency of 85%, while burning wood in an electric power plant is less than 25% efficient. That said, using wood for electricity provides many of the community economic benefits and critical markets for low-grade wood.