Wood and pellet appliance sales surge amid demographic heating changes

Fuel prices, extreme weather & heat pumps driving changes

By John Ackerly & Caroline Solomon

 

With rising gas, oil and electricity prices, wood and pellet stove manufacturers are struggling to keep up with a demand not seen in more than a decade. In Europe, demand for stoves is even larger, with lines forming outside hearth stores in hopes of getting one installed before the next heating season.

 

This recent surge comes on the heels of major demographic shifts already underway in wood and pellet heating in America. Households in southern states are retiring old stoves and not buying as many new ones, while in many northern states, demand has been surging. And while wood and pellet stoves are far more dominant in rural areas, there has been significant growth in some urban areas in recent decades. 

 

From 2000 to 2020, the number of U.S. homes using wood and pellets as a primary heating fuel grew very slightly, from 1.68% in 2000 to 1.70% in 2020, based on U.S. Census data. In real numbers, that means 2,075,845 households are using wood or pellets as a primary fuel. An additional 8 to 9 million homes use wood or pellets as a secondary heat source, making it the most popular secondary heating fuel after electricity. (The US Census gathered this data in 2000 and 2020 by asking the following question: “Which FUEL is used MOST for heating this house, apartment, or mobile home?”) 

However, this national data obscures some important local and regional trends. In some urban areas, wood heating is growing rapidly, while in some states it is falling rapidly. This is one of the first analyses based on US Census data to identify these trends in wood heat, which have been playing out over the last 20 years.  

Nationally, electricity continues its ascent and will likely become the most common heating fuel by 2030, if not before. In 1940, when the US Census began tracking heating fuel, wood was the second most common household heating source after coal. Wood heat steadily dropped, bottoming out in 1970 at 1.3% of homes, and then peaking at 3.9% in 1990. Primary wood and pellet heat could see a dramatic rise again if oil and gas prices stay high, for example going from 1.7% of homes back to 2.5% or even 3%, but that would still barely register on national graphs like the one above.

 

Overall, the only sources of heating that are rising between 2000 and 2020 are electricity, solar and wood, although wood only had a tiny rise. Fuel oil, propane, coal and gas all fell. 

Based on US Census Data. Compiled by the Alliance for Green Heat.

Urban vs. rural wood heat trends

 

On average, urban areas in the US saw an increase of 7.05% in wood heat, while rural areas saw an increase of 5.58%. But in 3 states, the number of homes using wood or pellets in urban areas more than doubled, and nearly doubled in 2 other states.  

Based on US Census Data. Compiled by the Alliance for Green Heat.

Michigan and Pennsylvania are both in the top 5 states for wood heating growth in urban and rural areas. Interestingly, the fastest growth in rural areas is not in the states where wood heating is most common. It’s important to note that the rapid increase in wood heat in some states does not always correlate with stove sales. One possible explanation is that many homes that used their stoves as a secondary heater in 2000 are using it as a primary heater in 2020. 

 

For the Northeast and Midwest, the urban change is much higher than the rural change; and in the South, urban wood heat usage is decreasing at a slower rate than rural wood heat usage. The West is the only region in which urban wood heat usage is falling more quickly than rural usage. 

 

But wood and pellet heating remains mainly a rural phenomenon. About four times the number of homes heat primarily with wood or pellets in rural areas than they do in urban areas. As a percentage, in 2020 less than half a percent of urban homes heat with wood but nearly 7% of rural ones do. 

 

More than 80% of Americans live in areas classified as “urban” by the US Census, which includes thousands of towns and suburban areas around cities. In 2010, Census data found 57% of households who primarily heat with wood live in rural areas, 40% in suburban areas and only 3% in urban areas.

 

The growth of wood heat in urban areas may reflect a much faster growth of pellet stoves, compared to wood stoves. In some states, hearth retailers sell more pellet stoves than wood stoves. Nationally, experts often say that about a one quarter to one third of all stove sales are pellet stoves, but there is no reliable data indicating exact percentages or where they are installed. Some urban areas, in addition to areas that experience frequent weather inversions, are beginning to ban the new installation of wood fireplaces and wood stoves. This is an effective way to ensure wood smoke does not get much worse where wood stoves are already common. For the smoke issues that do remain in more urban areas, wood smoke is primarily driven by outdoor fire pits, chimmneys and fireplaces.

In one of the only academic studies of U.S. wood heating trends published in 2012, the authors identified changes in wages and other energy prices as key drivers of demographic shifts in wood heat usage. That study, Analysis of U.S. residential wood energy consumption: 1967–2009, is an excellent overview of many factors impacting wood heat, and was done at the end of a 4-decade period of gradual decline in wood heat. This was before wood heat began trending up in 2000, ending its decades-long decline. 

Little research has been done in recent years on wood and pellet heat usage in urban and rural areas. One of the very few comprehensive analyses of U.S. wood heat usage, a report from 2012, called its lack of a breakdown of urban vs. rural wood heat as a “shortcoming” that was due to a “lack of time series data corresponding to urban/rural areas.” 

 

State and regional wood and pellet heat trends 

 

The states with the highest percentage of homes using wood or pellets as a primary heating fuel have remained relatively steady over the years. New Mexico was ranked sixth in 2010, quickly rose to third place in 2019, and then dropped back to fourth in 2020. One potential reason there could be more rapid changes in primary heating with wood and pellets is that a stove can be a primary heater one year and a secondary heater the next, which is usually not the case with central heating systems using oil, gas or electricity for fuel.

Based on US Census data. Compiled by the Alliance for Green Heat.

Many states experienced dramatic increases in wood heat usage from 2000 to 2020, while others saw declines in wood heat. The majority of the states which saw an increase in wood heat were not in New England and the Pacific Northwest where it is most popular, but in second tier states a bit further south. States where wood heat dropped the most are the warmest, southernmost states in the country.

 

Based on US Census Data. Compiled by the Alliance for Green Heat.

Aggregating by region, the general trend seen with states located in northern vs. southern regions holds. The two regions that saw increases in wood heat were the Northeast (+51.05%) and the Midwest (+27.73%), while the South and the West both saw overall decreases (-28.31% and -9.94%, respectively). 

Based on US Census Data. Compiled by the Alliance for Green Heat.

 

Selected state graphs

 

The residential heating mix in each state tells a different story over the years and presents different challenges to lowering the greenhouse gas intensity of heating fuel.

Wood and pellet heating has typically been the second most common primary heating fuel in Maine after oil. Wood did not prove to be any more popular in Maine in 1970 than it did in the rest of the country, but when heating oil costs rose, wood heating bounced back in a much dramatic way.

Wood heating in Washington state closely parallels Maine, starting at over 50%, diving to under 2% in 1970 and then rebounding in 1990. Electricity, however, has been extremely popular in Washington, probably due to milder winters, and local, cheaper hydroelectricity.

One of the largest, unknown stories about wood heat is that it was far more popular in the south in the 1950s, 60s and 70s than the rest of the country, including New England. This was largely because many rural Black communities were not included in gas or electricity infrastructure projects that enabled wealthier communities to get off wood and coal. Many households that rely on wood heat to this day do so not out of choice but out of necessity, and represent a significant, though little-noticed, energy justice issue.

 

Policy considerations

 

The rapid rise of wood heat presents a number of policy considerations that are frequently overlooked. Wood and pellet heating is often seen more of a public health nuisance in some circles, an energy lifeline in others, and a solution to shed fossil fuels in others. All of these narratives are valid and must be balanced at the local, state and federal level. 

 

Lack of understanding of the issues is a major barrier, as many policymakers and organizations often confound the issue of burning industrial pellets to make electricity with the sustainable use of premium pellets for local heat. And many still assume wood heat primarily involves cutting live trees, instead of sourcing wood that is already down or dead and has no other use. There is little awareness that pellet heat is consistently far cleaner than cord wood heat. Finally, there is still a lack of awareness that wood smoke, which may smell good to many people, is a serious health issue. 

 

If utilizing the cleanest and most modern wood and pellet heating to reduce fossil fuel use was the goal, federal and state governments could focus tax incentives and rebates on pellet stoves and boilers, as some states already do. Already in Vermont and other areas, the high rate of wood and pellet heat reduces stress on the grid during winter peak load periods, which are likely to get worse as more of our energy needs are electrified. If the federal government wanted to support rural low-income families to utilize free local wood, it could drastically increase its R&D funding to jumpstart the production of automated wood stoves that use computer chips to regulate air supply and prevent smoldering.

 

We can expect some cities and states to restrict new installations of wood heaters in densely inhabited areas and others to expand modern, automated heat at the commercial and residential level. Such outcomes are not inconsistent but require more educated debate among policymakers and the public. Already some of these policies are helping to shape the rise and fall of wood and pellet heat across America, but are likely a small influence compared to market forces. 

 

Conclusion

 

While wood and pellet heating has changed little in the last 20 years at the national level, regional and state changes have been significant. At a national level, studies show that reductions in household size, growth in heated floor area per house, and increased access to space cooling are the main drivers of increases in energy and GHG emissions after population growth. Improved generation efficiency and decarbonization of electricity supply are bringing about GHG emission reductions. Wood and pellet heat may be on the rise again, meaning it could factor more into national discussions of energy security and decarbonization.

 

This paper looks at the size of primary wood and pellet heating at the national and state level, but the role of secondary wood and pellet heating is equally, if not more, important in terms of sheer BTU output and reductions in fossil fuels.  Similar challenges of understanding, guiding and managing the pros and cons of wood heat are emerging across the northern and southern hemisphere and particularly in Europe, where the energy implications of Russian’s invasion of Ukraine are most acute. 

 

The next 20 years will likely see an even more rapid shift in residential heating fuel, as climate change becomes a more urgent issue. Electrification is emerging as the dominant, most obvious solution to home heating but wood and pellet heating may emerge as larger factor in the Northeast region and in various other states.

 

Further Reading

Households heating with wood or pellets declined by nearly 10% between 2011 and 2016 (AGH, 2018)

Increase in wood as main source of household heating most notable in the Northeast (EIA, 2014)

More than 30% of homes heated with wood in some counties (US Census, 2018)

Vermont and Maine retain top rank in residential wood heat, while New Mexico climbs to #3

Wood heat provides resilience, benefits to utilities as climate change quickens

An analysis of U.S. Census data by the Alliance for Green Heat shows that wood heating is expanding in some states and shrinking in others between 2009 and 2019.  Generally, it is expanding in northern New England and shrinking in the Pacific Northwest. In areas that experience frequent weather inversions causing excessive smoke build up, like Oregon and Washington, fewer homes heating with wood is good news for local air quality. In New England states where it is expanding, it's good news for agencies and groups that want to more aggressively reduce fossil fuel heating, and invest heating dollars in the local economy. 

Overall, the number of homes that use wood or pellets as their primary heat source dropped from 2% to 1.6%, with low fossil heating fuel prices likely being the top factor.  From 2000 until about 2012, wood and pellets were the fastest growing heating fuel in the United States. According to the U.S. Energy Information Agency, 8 states experienced more than 100% growth and 7 states experience between 50 and 100% growth from 2005 to 2012.

Vermont and Maine have long been ranked #1 and #2 for per capita primary wood heating with 9% and 13% of homes as of 2019.  New Mexico rose from #6 in 2009 to #3 in 2019, passing Montana, Idaho and Oregon.  It experienced a 14% rise in primary heating during that decade whereas Montana, Idaho and Oregon dropped 14%, 10% and 17% respectively.  Poor economic conditions in Native American Reservations may account for some of New Mexico’s per capita rise.

Wood and pellet heating is widespread and culturally accepted – it is used in about 10 million homes – and consistently offsets a significant amount of fossil heating fuel every year. Now, the electrification movement is leading to more and more homes heating with heat pumps. In the coming decades, until renewable electricity is more available, wood and pellet heat can help utilities by lowering wintertime peak demand.

Census data on the rise or fall of per capita primary wood and pellet heating only tells parts of the story. Stoves are used far more often as secondary heaters and can be a secondary heater one year and a primary one the next, depending on fossil fuel prices or a household’s ability to pay for fossil fuels. It also doesn’t necessarily reflect the sale of stoves, or how many people buy new stoves to replace old ones, buy stoves for secondary homes, or switch from wood to pellet stoves, for example. According to the Energy Information Administration (EIA), about 3 times more homes use wood as a secondary fuel than a primary one.

It is still unclear how climate change and slowly warming winters will impact wood heat. The federal government and states may increase rebates for the cleanest and most efficient units, since wood and pellet stoves are a very cost-effective way to reduce fossil heating fuels. Additionally, stoves that used to be secondary heaters may now become primary heaters as more and more households need to use their furnace or boiler less.  Other factors that are expected to lead to more stove sales include the increasing severity of major storms and blackouts and the widespread switch to electric heat pumps.  Many households with heat pumps want back-up heat, cheaper heat during the coldest months, and a more intensive heat source.

Northern New England states have already started to incentivize more pellet heating to invest in local energy jobs, reduce reliance on carbon-intensive oil and propane heat and help build the infrastructure for modern pellet heating systems. Those states do not have the level of wood smoke problems that some western U.S. areas have.

The list of the per capita top 10 wood heating states has also seen some reshuffling over the past decade. The popularity of wood relative to other home heating fuels increased in some states and declined in others. 

State	2009 Rank	2019 Rank	Change in Percentage of Homes Heating Mainly with Wood  (2009-2019)
Vermont	1	1	▲+10%
Maine	2	2	▲+7%
New Mexico	6	3	▲+14%
Montana	3	4	▼ -14%
Idaho	4	5	▼ -10%
New Hampshire	8	6	▲ +18%
Oregon	5	7	▼ -17%
West Virginia	7	8	▼ -10%
Alaska	12	9	▲ +9%
Wyoming	9	10	▼ -23%
Washington	10	11	▼ -24%
Arkansas	11	12	▼ -12%

In the past ten years, New Mexico overtook Montana, Idaho, and Oregon to become the state with the 3rd highest percentage of homes heating with wood. Wood’s popularity has declined in West Virginia, Wyoming, and Washington, while increasing in Alaska, Vermont, New Hampshire and Maine. 

The home heating question has been a Census question since 1996, and the question and definitions have not changed since then. As a result, pellets are not specifically mentioned, though the Census definition says: “This category includes purchased wood, wood cut by household members on their property or elsewhere, driftwood, sawmill or construction scraps, or the like.” Therefore, we assume that people answering this question today will say they use wood if they use pellets.

Regarding older Census data, it is difficult to find historical annual state-level data that are 10 years or older. Data from 1999 is available for download online but in aggregate form with unlabeled questions. The 2020 Census data will be released starting in September, though some of the data will not be released until January of next year. The data used to compare household wood heating 2009 and 2019 is from the American Community Survey (ACS), which the Census Bureau conducts every year. One-year ACS wood heating estimates are less accurate because the respondents are fewer than the official decennial “Census,” which only happens once every 10 years. 

Further reading:

Households heating with wood or pellets declined by nearly 10% between 2011 and 2016

EIA: 2014 Increase in wood heating most notable in the Northeast

2012 Census Shows Wood Heating Continues Growth Streak

2011 Census Shows Wood Heat Continues to Rise in U.S.

2010 Census Shows Wood is Fastest Growing Heating Fuel in US

Coal Heating in the United States (June 2017)

  

Maine Governor LePage and Jotul Team Up Against Wood Stove Regulations

Updated: Jan. 2017

On April 4 2014, the Wall Street Journal ran an op-ed from Maine Governor Paul LePage. We believe the ideas in it would likely do little to advance the debate about how wood stoves could be regulated to be cleaner and more efficient.

Maine Governor Paul LePage

An underlying problem with LePage’s op-ed is that it purports to speak to national wood stove policy but speaks more to a prominent wood stove importer and manufacturer in Gorham, Maine.  

Governor LePage’s primary argument is that the EPA’s regulations will require manufacturers to spend so much money to improve their stoves that new models will be unaffordable.  As a result, instead of buying new, cleaner stoves, more people will hang on to their dirtier old stoves making pollution problems worse, not better.  The Governor greatly exaggerates this argument while overlooking the huge benefits that the EPA regulations will bring.

The Governor’s arguments are based on shaky or inaccurate assumptions.  First, many if not most people in the market for new stoves don’t already own an old stove. They are first time buyers and will be able to get a cleaner and more efficient wood or pellet stove.  Second, the price of new stoves may not go up much, if at all, for some manufacturers, because some manufacturers are already making affordable stoves that meet the strictest standards being considered by EPA that would not take effect until 2020.  Other manufacturers are buying or developing innovative technologies that are affordable and extremely clean.  Third, even if some stoves have slightly higher prices, those price increases may be more than offset by fuel savings from improved efficiency, a fact that Governor LePage overlooks.  Finally, Governor LePage does not dispute the enormous public health benefits of these regulations. 

The EPA estimates that public heath benefits will be a minimum of 115 times the cost to manufacturers to improve performance, and as much as 262 times in the best case.  (EPA estimates the public health benefits during the first 8 years at $1.8-$4.1 billion annually, and the cost to industry at $15.7 million annually.  Thus the public health return is a minimum of 115 to 1. 

Bret Watson, owner of
Jotul North America

These regulations are likely to be more costly to Jotul than to most other manufacturers. This is because Jotul’s most popular stoves have further to go than others to meet stricter standards.  And, it is because Jotul makes stoves using cast iron rather than steel. Changing to steel stoves or just adding some steel models may be tougher for Jotul because it is owned by a foreign company wed to cast iron. 

None of Jotul’s most popular stoves are less than 3.0 grams an hour, which is one likely reason that the company has been an outspoken advocate against stricter emissions standards.  Almost all major stove manufacturers except Jotul have multiple models in the 1.5 to 2.5 gram an hour range.  Jotul actively opposed a Maryland state program to give rebates to stoves at 3 gram an hour or less, but consumers, stove retailers, legislators and state regulators wanted a rebate program for cleaner wood and pellet stoves.  The program was established and has successfully helped hundreds of Marylanders get cleaner, new stoves and retire older, dirtier ones.

One of the most striking ironies of LePage’s op-ed is that he supports a common industry position that wood stove change-outs would be more effective in reducing wood smoke than requiring stricter standards for new stoves.  However, Maine is not one of the states that have provided state funds for change-out programs.  To its credit, Jotul has provided a summer discount program for consumers to trade-in an old stove and buy a new Jotul stove. 

Governor LePage mentions that Maine has a $250 rebate program for wood stoves (since then its been raised to $500).  We think this and similar programs are good, however this one does not require trading in an old, uncertified stove when buying a new one. The Efficiency Maine program has one of the lowest rebate levels and highest requirements, such as dedicated outside air supply, so that to date, the program has given out only one rebate.

The Governor also calls on the EPA to establish an incentive program for stove owners to buy newer models.  This is not a bad idea and some states do this, but not Maine.  The Federal government has had such a program in the form of a $300 tax credit.  Industry lobbies for that program but has never suggested that program only be open to owners of uncertified stoves.   

The Governor also says in his op-ed that his environmental-protection commissioner testified in Boston in February at the EPA's only public hearing.  His environmental protection commissioner, Patricia Aho, made quite an impression because she was out of step with other state officials by being so critical of the proposed regulations.  State officials representing state agencies from Massachusetts, Connecticut, Vermont, New Hampshire, Minnesota and Washington also attended the Boston public hearing and were all very supportive. 

A few observations:

1.     Any increase in purchase price that happens over the next 5 years is likely to be more than offset by fuel savings from the higher efficiency appliances that consumers will have access to.

2.     These regulations will finally require manufacturers to disclose actual, verified efficiencies to the public so that consumers can better calculate what their energy savings will be.  (Currently, most manufacturers exaggerate their efficiencies or do not disclose them at all.)

3.     Stricter emission standards are needed to help get wood and pellet appliances into renewable energy incentive programs that will help consumers afford high efficiency equipment.

4.     The regulations will bring the American indoor and outdoor wood and pellet boiler industry into the 21^st century and give consumers many more choices of cleaner, higher efficiency domestic appliances.

We think the future lies in investing in the R&D that will help make American wood and pellet stoves the best in the world.  Some of the cleanest and most efficient stoves are already made here, and exports of US stoves are increasing.  In Europe and America, innovation is emerging that may start to transform the stove industry.  Soon, we are likely to have stoves that recharge cell phones in a power outage and that have automated features to maximize efficiency and minimize emissions without the operator having to guess where to set the air intake. Pellet stoves and boilers will soon be connected to our smart phones and smart thermostats – and be far smarter themselves.

Many in industry are fighting for the status quo rather than building on a robust engineering tradition and good old Yankee ingenuity to build cleaner, more efficient and easier to operate stoves.  Wood stoves have had the reputation of being too dirty for too long.  These new regulations from the EPA are our best shot at getting away from that reputation and joining the mainstream of the renewable energy future.