Pellet Heat Approaches Liftoff with Residential Consumers

“We’re this far from taking off,” said a speaker at a pellet boiler firm’s recent sales meeting in Portland, Maine, while holding his thumb and index finger two inches apart. At the same time, another major pellet boiler firm in Maine is pounding the television airwaves with a commercial comparing the price of pellet fuel to heating oil, and Maine’s state energy agency recently announced an incentive program whereby up to 50 residential pellet boiler purchasers will receive rebates up to $5,000. The boiler firms and installers hope that this incentive will prove so popular that it will be extended beyond the initial funding.

 Speaking at the 2013 Kedel (a Danish pellet boiler) Summit in Portland, former Biomass Thermal Energy Council Chairman Charlie Niebling was asked what it will take for residential pellet boiler sales in Maine and New Hampshire to achieve liftoff. Niebling suggested that increased tension in the Middle East, thereby spiking oil prices, would be an obvious stimulus. Absent such a spike, Niebling stated that while the pellet sector is “poised to significantly expand,” it behooves the industry to undertake a strong education and promotion program.

Other speakers at the meeting cited the need to answer consumer questions about bulk delivery, the long-term price outlook for pellets, the resale value of homes with central pellet heat, and greenhouse gas emissions. A panel of customers speaking at the end of the meeting emphasized that the desire to “get away from oil,” for both economic and environmental reasons, trumped whatever unanswered questions they had about switching to pellets. A secondary reason cited was a desire to spend their fuel dollars in support of Maine’s forest products economy.

Sales staff at the meeting spoke with confidence, noting that the 20-year longevity of oil burners means that every year, five percent of Maine homeowners are in the marketplace for a new heating system. The marketing pitch is “pellets are half the price of oil, and emit one-tenth the greenhouse gas.”

Will Maine be a significant partner in achieving pellet heat liftoff? According to its critics, the outlook among some trustees and staff at the state’s energy agency, Efficiency Maine, is that economic development considerations—the huge multiplier effect of a heating system using a locally produced fuel—are not central to the agency’s mission.  In addition, the “insulation uber alles” crowd continues to demand that no home receive funds for a heating system change-out without the building envelope first being secured, a proposition that often leaves the homeowner with only enough funds for a new oil burner.

There are indications that the insulationists’ shrill arguments, threatening legal action if Efficiency Maine does not interpret an ambiguous section of new state law in their favor, are losing sway at the state agency. Also, Efficiency Maine recently made a modest grant to assist the Northern Forest Center’s promising Model Neighborhood project, which incentivizes pellet boiler installations in a concentrated area of homeowners.

At any rate, Efficiency Maine has just announced a wide range of incentives designed to reduce both energy demand and heating costs. Pellet stove purchasers will receive a $250 rebate provided the stove is EPA-approved and makeup air is ducted into the unit. Homeowners installing heat pumps or efficient new gas, propane, or oil furnaces will receive $500 rebates. The first 50 homeowners to install pellet boilers meeting HUD Energy Saver standards—or geothermal heat—will receive a $5,000 rebate, which is approximately the incentive amount that has proved most effective in selling pellet boilers.

Our industry up here obviously hopes that this incentive, sales force enthusiasm, the media advertising being done by one boiler firm—Maine Energy Systems—promoting pellet heat in general, and word-of-mouth recognition of our product quality will get us into a sharply upward flight path.