Can An Automatic Pellet Boiler Lure Consumers Away From Heating Oil?

Feb 13, 2012

A pilot project in Berlin is helping homeowners get sophisticated boilers that are automatically fed wood pellets.

The idea is to persuade people throughout the region that they can save money and say goodbye to oil while bolstering the region’s forest economy.

NHPR’s Chris Jensen reports.


Peter Canning is in basement of his home on a hillside overlooking Berlin.

He’s showing off his new wood-pellet boiler.

“You can open up down in the bottom here. I can show you how the pellets come in if you want to kneel down here and take a peek.”

But this is no ordinary pellet boiler, it’s self-feeding, and even the ash automatically collects in a bin so it can be easily emptied.

It is made by an Austrian company called OkoFEN.

And it’s not cheap.

Canning was able to get one because he is participating in a pilot program in Berlin that heavily subsidized the $18,000 cost.

“With the rebates and all that I received I paid about a little over $5,000 for the boiler. I think the rebates are tremendous and we’re looking at starting to save money now.”

One of those rebates came from a state program using federal stimulus funds.

It was expected to end Feb. 15th.  But it is continuing and is offering up to $6,000 to consumers anywhere in the state who buy any brand of bulk-fed, pellet boilers.

But Canning got most of the help by participating in the Model Neighborhood Project.

For that project the City of Berlin has partnered with the Northern Forest CenterBerlin BetterBuildings, and Maine Energy Systems, which imports and assembles the OkoFEN boilers.

The project –which aims to help 40 homeowners - is getting much of its money from tax credits as well as grants.

But the hope for such boilers goes far beyond Canning’s tidy basement.

The hope is that such systems will catch on throughout the region, boosting the economy by replacing oil with a renewable resource – wood pellets.

Mike Wilson is with the Northern Forest Center, the project’s major backer. The Center promotes sustainable forestry.

“Right now the Northern forest states, Maine, New Hampshire, Vermont and New York, spend about $6 billion a year on fossil fuels and 78 cents out of every dollar we spend leaves the regional economy.”

If more homeowners used wood pellets, those dollars would stay in the region.

But moving beyond the first 40 homeowners and into widespread adoption of these sophisticated, bulk-fed units is the challenge.

Eric Kingsley is an analyst with Innovative Natural Resource Solutions, which sometimes consults with the forest industry.

“The pellet boilers tend to be a higher, up front cost than a comparable oil boiler. So there is a capital hurdle.”

The units are sold and maintained by companies trained by Maine Energy Systems.

The least expensive residential OkoFEN is about $11,000, but installation and a storage bin could easily add $6,000.

The Northern Forest Center said it picked the pricey OkoFEN because it was “the most seamless” replacement for an oil unit.

Kingsley says another challenge is the delivery of wood pellets.

“There is a little bit of a chicken and egg dilemma at this point.”

Kingsley says distributors don’t want to invest in equipment because there aren’t a lot of customers.

But customers are nervous about getting deliveries and they don’t want to buy the boilers.

Owners can buy the premium-grade pellets from several companies, but Dutch Dresser, who runs Maine Energy Systems, also sells them.

To encourage OkoFEN sales he says he won’t charge for delivery even to a distant homeowner.

Dresser is also promising OkoFEN purchasers he’ll keep the price of the pellets the same for three years.

“It is $239 a ton which is the equivalent of oil at $1.99 a gallon.”

He says a ton of premium pellets equals the energy in about 120 gallons of oil.

Dresser says he has sold more OkoFENs for commercial use than residences. He thinks that will change, particularly if there is a spike in the price of oil.

But even if there is a big increase in the demand for pellets analyst Kingsley says the region can easily handle it.

It will take some time to tell whether the region is ready to give up oil for wood pellets, something the forestry industry would love.

But back in Berlin Peter Canning plans to save a lot of money.

It is estimated heating with pellets costs about 40 percent less than heating with oil.

And the Model Neighborhood Program is looking for 35 more participants.

For NHPR News this is Chris Jensen.