Meet the teams: Entrepreneur at Stove Design Competition tackling China’s massive wood stove market

This post is the eleventh in a series introducing the 12 teams participating in the 2018 Wood Stove Design Challenge in November.

By John Ackerly and Shoshana Rybeck, Alliance for Green Heat

Founding of Cygnoides Smart Energy Tech Co

Cygnoides Smart Energy Tech Co.
engineers with local university student
volunteers working for a public welfare
project in Guizhou mountain area. 

In the US, the 60 million rural residents own about 5 – 7 million old, uncertified stoves. In China, there are nearly 600 million rural residents and up to 100 million old, polluting stoves. The market for cleaner wood stove is huge.

When Min Chen returned to China after getting his doctorate in engineering in Denmark in 2013, he dedicated himself to making a wood heating stove that rural Chinese would buy. To do this, he knew he had to keep the price around a few hundred dollars and it had to make enough electricity to light up a small home and provide hot water. Without providing electricity, a cleaner stove in and of itself was not going to sell. Scores of “improved” stove models have been tried in China, but the problem is so vast that its hard to know if they even made a dent.

Min also has to face major changes in national energy policy that can open up, or close down markets for tens of millions of stoves. China set a goal of banning coal heat by winter of 2017 in a bid to switch hundreds of towns and cities to gas. The ban had to be rescinded to avert a heating crisis but it spurred innovation in biomass stoves. Biomass was seen as much better than coal, and there still appears to be significant policy support for biomass, but gas and electricity are ultimately seen as the solution. A World Bank study found in China that replacing current wood stoves  for heating with pellet stoves and replacing chunk coal fuel with coal briquettes could provide significant climate benefits.

Nearly 100% of Chinese homes have electricity, but the problem Min says is that is that “there is still no reliable electricity” in millions of homes. Electricity is often spotty, thus Min understands that an inexpensive stove that provides indoor lighting will have a huge market. Min says that he “made a lot of generator toys and stove simulators when he was in the academy, but wanted to make this toy practical and really usable”. Min and his four other team members found investors and have designed their model that will consistently create heat, hot water for drinking, and electricity.

Wood stove similar to the ReBao

Stove making in China is complicated by the fact that Chinese use a wide variety of feedstocks. In fact, it is illegal to harvest firewood in most stoves use branches and agricultural residue like corn cobs – and lots of coal. Min’s stove is designed to used pelletized fuel or briquettes made of sawdust.  China has a large amount of agricultural and forestry residues that can be used as energy, and biomass densified solid fuel (BSDF) is an important pathway to use them as energy, especially for heating.

ReBao

Rebao uses an innovative converter as a voltage regulator to convert the stove’s input energy to output energy, and can be manually or automatically run. However, the stove runs on its own with full automatic operation, and can produce up to 100w of electricity with a few kw of heat, which Min says is enough heat to keep a small home comfortably heated and meet part of the electric load in the winter. 

Since he is trying to develop a product that will help people in their everyday lives, Min says “price is the most important part of the product”. He does not see why he should work so hard on developing a technology for people if they would even be able comfortably afford it. The stove has been sold in small quantities and currently costs around a few hundred dollars US dollars. Min reports that all units have worked well and continues to be optimistic about the future of the stove’s price and market success.

Further developments

China has a vibrant stove manufacturing industry for
domestic stoves for both heating and cooking, but most
are basic with little secondary PM reduction technology.

The development of ReBao is ongoing, and Min says that he would like to try to make the stove even more user friendly by developing smart functions on the stove that are wifi enabled. Heating stoves have to be emission certified in China by the national agricultural energy association but they can be continually improved without having to go back to the test lab for expensive certification tests. A stove with a cost of a few hundred $ that also heats water and makes electricity will probably not be the cleanest stove at the competition. But the competition seeks to include innovative heatings stoves that are fully or partially automated for markets that are much larger than the North American market. 

Contact the team

Min Chen

chenminmike@gmail.com

Pellet Stoves Make Huge Gains in Market Share

Pellet stoves nearly outsold wood stoves in 2006 and 2008

Alliance for Green Heat, March 26, 2013 - In 1999, pellet stoves only had an 11% share of the stove market. Nine years later in 2008, they had a nearly 43% market share. Today, for every three stoves sold, two use cordwood and one uses pellets. For a technology that was only invented in 1980s, this is a remarkable innovation success story.

The large percentage of pellet stoves sold today is great news for air quality agencies since they operate far cleaner in homes than almost all wood stoves. It’s also great news for the renewable energy community since a pellet stove burns 24/7 and is usually a home’s primary heat source. Pellet stoves typically make as much or more energy than residential solar panels and drastically reduce a home’s fossil fuel use.

Manufacturers shipped 48,277 pellet stoves to sell in the U.S. in 2012, according to the Hearth, Patio & Barbeque Association (HPBA), a trade association that tracks the annual shipments of wood, pellet and gas stoves. While 2012 sales were slow, the average pellet stove sales over the last five years was nearly 90,000 per year, according to HPBA data.

By contrast, wood stoves and wood stove inserts have sold an average of 137,000 units over the last five years. Pellet stoves have not yet ever sold more than wood stoves, but they came close in 2006 and 2008. It is likely only a matter of time before they top annual wood stove sales. Ten years from now, it is not impossible that pellet stoves would start outselling wood stoves on a regular basis.

Pellet stoves and pellet fuel did not take hold until the mid 1990s, when the component parts of the stoves became more standardized, interchangeable and less expensive, according to Scott Williamson, one of the country’s foremost experts on pellet stoves. Since then, reliability has improved and install costs are lower than wood stoves, giving them an edge in the marketplace, says Williamson.

Changing demographics also is likely to favor pellets. “As our population ages, more and more people will be switching from wood to pellets,” says Charlie Niebling, a thought leader in the pellet industry and board member of the Biomass Thermal Energy Council (BTEC). “Programs to change out old wood stoves usually give higher rebates for people to install pellet stoves instead of a new wood stove, and that has helped the market share of pellet stoves,” Niebling adds.

Despite their lower particulate matter emission profile, pellet stoves get an extra $100 or $200 in rebates, but rebate and incentive programs rarely just focus on pellet stoves and not wood stoves.  The federal tax credit has always applied equally to wood and pellet stoves and the ongoing state incentive programs in Idaho, Maryland, Montana and Oregon provide incentives to both wood and pellet appliances.

A recent example of the surge in popularity of pellet stoves is from a stove rebate program run by the State of Maryland. Maryland residents chose pellet stoves twice as often as wood stoves. “We are pleased to see rebates for pellet stoves were more popular because we know that pellet stoves are more likely to be used as a primary heating device and are usually cleaner,” said Kyle Haas, the Bioenergy Program Manager at the Maryland Energy Administration.

“This is an example of a new and effective renewable energy technology getting off the ground without significant government assistance,” says John Ackerly, President of the Alliance for Green Heat. “While this proves pellet technology can succeed in the market on its own, if it was treated like solar and geothermal in the federal tax code, many more consumers would have a very affordable way to reduce fossil fuels. Solar, geothermal and wind are great for wealthier families, but pellet technologies are a way to scale up residential renewables far more quickly” Ackerly said.

Pellet appliances are incentivized in Europe more often than cord wood appliances and have benefited from various green label programs, similar to the US Energy Star label. There is no regional or national green label in the US that recognizes the cleanest and most efficient pellet or wood stoves, which likely adds to the sluggish sales of these appliances, compared to Europe.

For the first time, the EPA will regulate pellet stoves as of next year. In 1990, when the EPA first regulated wood stoves, it exempted pellet stoves. This will mean that all pellet stoves have to be tested and certified by EPA approved test labs. The EPA’s draft regulations, which are far from final, do not set strict emission limits. The average pellet stove emits under 2 grams or particulates an hour. The EPA’s draft requires pellet stoves to emit under 4.5 grams per hour.

While pellet stoves have about a 30% market share in the US, in Canada pellet stove sales are only about 10% of the market, according to HPBA. Data on pellet stoves is tracked by number of stoves that are shipped by manufacturers that year. The data HPBA produces is conservative in nature and that "the numbers HPBA produces for the industry are conservative, containing the vast number of units shipped, although the actual shipment numbers are probably slightly higher,” according to Don Johnson, Research Director for HPBA. Pellet and wood stove shipments also include pellet and wood stove inserts. Most of the wood stove shipment data produced by HPBA does not include inexpensive wood stoves not certified by EPA.

The pellet stove market in the US is way behind the market in Europe and not just in terms of volume of sales. For example, reliable, verified efficiencies are not reported by manufacturers of pellet stoves in the US, which may reduce consumer confidence and satisfaction for those who unknowingly buy more inefficient appliances. And, there is no standardized way to report decibel levels on pellet stoves in the US and noisy fans are one of the biggest complaints of consumers.

Two major developments that will help propel the industry forward is a pellet fuel standardization program and new regulations by the EPA that will require pellet stoves to report their efficiency.