Cost of Wood Pellets Pricing

The selling price of pellets currently ranges anywhere from $270-$290 per ton and averages $280. Price varies by region, availability, and season, just like other heating fuels. Because bags of pellets stack and store easily, many prudent customers take advantage of lower off-season prices and ensure their winter fuel supply by buying early.

The primary issue is the cost of energy. Pellets purchased at the average $280 per ton and burned in a typical pellet stove cost less than the cost of oil and electric heat, and competitive with average energy costs of some other fuels.

Wood pellets are affected by the current energy crisis in the form of raw material procurement and the transportation of both raw material and finished goods. Coupled with the slow down in the forestry industries, more raw materials must be drawn from direct forestry operations. The price of this fuel is going to increase and may have, in fact, some spot shortages as manufacturers struggle to keep up with demand.

Heating Costs

While tables and charts assume average appliance efficiencies and fuel costs, real world experiences vary widely. The actual cost of heating a home must take into account the insulation and tightness of the home, its size and layout, the level of comfort desired, and local climate. Other economic factors impacting energy costs, though hard to quantify, are also worth consideration. Biomass pellets reduce the use of dwindling fossil fuels, often imported from foreign countries. Every ton of waste material used in pellets reduces the rising costs associated with waste disposal.

Quick Comparison of Wood Pellets Vs. Other Heating Fuels

Below there are four quick references comparing wood pellets to other fuels. This comparison is made based on BTU to equal BTU content. In all four senarios the price per ton of wood pellets is $300.00 per ton as later in the 2008 season we believe that to be the approximate price.

One ton of wood pellets are equal to 120 gallons of heating oil ($4.33/gallon*). Pellets are delivering the same BTUs, but with a price 42% cheaper than heating oil.

One ton of wood pellets are equal to 170 gallons of liquid propane($2.598/gallon**). Pellets are delivering the same BTUs, but with a price 33% cheaper than liquid propane.

One ton of wood pellets are equal to 16,000 ft3 of natural gas ($14.30/1000 cubic feet***). While natural gas is 24% cheaper then wood pellets currently, natural gas is not available in every cold weather state as an effective option.

One ton of wood pellets are equal to 4,775 kWh of electric ($0.102/KWH****). Pellets are delivering the same BTUs, but with a price 38% cheaper than kwhs of electricity.

NOTE:
*Price for heating oil comparison from
** Price as of March 08
*** Price as of April 08
**** Price as of January 08
Liquid Propane, Natural Gas and Kilowatt Hour prices gathered from Energy Information Administration (EIA)