It’s predictable: When fuel oil prices rise, some customers start to consider other heating options, and some grow bound and determined to make a change. Rather than lose such customers altogether, some dealers practice a longstanding business credo – “Give the people what they want” – and market themselves as “indoor comfort specialists,” offering alternatives such as solid fuel appliances that burn wood, pellets or coal.
Solid fuel appliances have gained ground in the past couple of years as the cost of fuel oil has climbed, equipment manufacturers, distributors and dealers said.
Sales of pellet-burning stoves, for example, rocketed last fall in Vermont and elsewhere in New England and the Northeast because many customers perceived them as a less expensive heating method than burning fuel oil. (Fuel oil distributors can still make a case for efficient oil heating, however. See sidebar below.)
Nelson & Small Inc., a distributor in Portland, Me. that supplies dealers in New England and 26 counties in upstate New York, added pellet- and wood-burning stoves to its lineup in 2008. It had not offered such appliances for some 20 years.
“There was a huge demand” in 2008, Peter LaRose, senior vice president and general sales manager for Nelson & Small, said, “and that was driven primarily by oil prices in the Northeast that got to around $4.69, $4.79 a gallon. There was a rush to get out of oil and get into some kind of alternative fuel, and people looked to the wood stoves and pellet stoves.”
But, LaRose said, “As the price came down to where it is today – $2.39, $2.49 a gallon – the demand has fallen off rapidly.” He called the stove business “a high-oil-price driven industry, for the short run.”
For many manufacturers of alternate heating products, last year was busy, and business should be good in 2009 as well, “barring unforeseen circumstances such as prolonged economic crisis or stable – and lower – oil prices,” said Tony Comeau, technical marketer for Newmac Manufacturing, Inc. in Debert, Nova Scotia. Newmac’s products include appliances that burn wood or coal.
“A typical comment from an owner of a solid fuel product is, ‘Wood’ – or coal – ‘is warmer,’ which is partly due to the radiant factor,” especially noticeable with stoves inserted in fireplaces, Comeau said.
The reach of some Pennsylvania coal suppliers extends well into New England, Comeau said, noting that Newmac has customers in Maine and Massachusetts who burn coal.
Customers for wood-burning appliances “have happily chosen the lifestyle of wood burning,” Comeau said. “They enjoy the whole process of handling, seasoning the wood and maintaining their solid fuel system.”
It’s uncommon for fuel oil suppliers to venture into wood delivery, according to Comeau. Wood-burning customers tend to get their wood from one of two sources.
“In our area and through New Hampshire and some areas of Pennsylvania some of them are farmers” or people who have a woodlot that is family property, Comeau said. A portion of each fall is devoted to cutting and splitting wood. Customers without their own wood source solicit quotes from suppliers and make a decision based on price and word of mouth about the quality of the wood, Comeau said.
Newmac has been offering solid fuel heating appliances since it was established in 1978 in Ontario, Canada. Within a couple of years of its founding, Newmac relocated to Nova Scotia, where it has been since. Solid fuel appliances were part of the company’s lineup from the start because consumer demand shot up during the oil crisis of the mid 1970s, Comeau said.
People interested in purchasing solid fuel products usually have done their homework and are well-informed, Comeau noted. In looking for a cheaper way to heat their homes, they investigate a wide range of alternatives, including heat pumps, propane, and pellets, as well as coal and wood, he said, and turn to friends, the Internet, home shows and dealers for information.
Education of consumers and dealer-installers is a continuing mission. Comeau said that Newmac representatives attend home shows to support contractors who sell and install the company’s products. “People at the home shows are well-informed,” Comeau said, and Newmac representatives can collect valuable feedback from attendees, Comeau said.
Newmac’s products – boilers and furnaces – are designed for the residential market. The appliances the company supplies generate a range of heating power, from 90,000 Btus per hour, up to 170,000 Btus per hour, Comeau said, although the high end of that range would be for a big residence. Somewhere between 80,000 Btus and 100,000 Btus is sufficient for most bungalows, Comeau said.
BioHeatUSA, formerly Tarm USA, offers wood/fuel oil and wood pellet/fuel oil boilers for both residential and commercial applications.
Company representatives said growth has been steady over the years and interest grows considerably when oil prices go higher. Based in Lyme, N.H., BioHeatUSA is building an installing dealer network. O.C. McCuin & Sons in Highgate Center, Vt., and Daigle Oil Co. in Maine are part of that network.
Kyle Lothian of McCuin & Sons noted that interest in the solid fuel boilers was high last fall, but has since decreased. The boilers that McCuin & Sons carries from BioHeatUSA range in price from $7,500 to $12,000 and are an investment that can add to the value of a house, Lothian said. He noted that the boilers have the latest gasification technology and that the heat exchanger carries a 20-year warranty. McCuin & Sons supplies wood pellets, which some of the models use, but not wood, which other models use. “We have too many irons in the fire as it is,” Lothian said, when asked why McCuin doesn’t deliver wood. “We let the loggers take care of that end.”
“Firewood has always been a very accessible heating source in northern Maine, and we have offered wood heating appliances for at least the last three decades,” said Dan Vaillancourt, president of Daigle Oil, based in Fort Kent, Me.
Daigle Oil itself is not in the firewood business. “There are several logging contractors in our area that are equipped to process and deliver customers’ needs,” Vaillancourt said. “We have sold a limited volume of pellets and coal, primarily to supply customers that have bought heating appliances from us.”
Sales of solid fuel heating equipment has varied over the years, depending primarily on fluctuation in heating oil prices, Vaillancourt said.
“We have seen periods when wood boilers and furnaces have been more popular, such as in the early 1980s and particularly in the first eight months or so of 2008, when heating oil prices were high,” Vaillancourt said. “There have been periods in which there was virtually no demand at all for them, and I expect activity to vary going forward, based on oil prices.”
Within the last year or so, Daigle Oil has taken on some new brands of wood boilers, as well as pellet stoves and boilers, Vaillancourt said.
Based on recent sales, the Scandtec and Tarm wood boilers, and New Yorker wood/coal boilers have been the more popular makes among several that Daigle offers, Vaillancourt said. Also selling well are two brands of pellet parlor stoves, he said. Demand has been comparatively slower on two brands of pellet boilers that Daigle carries.
The appeal of solid fuel appliances generally is that they provide a high-efficiency alternative for customers who want the security of more than one heating source, Vaillancourt said. “Those who have purchased them have kept their oil systems in place and, in some cases, upgraded to a newer oil unit as well. They will use the source that is most convenient and cost effective for them.”
The Scandtec and Tarm units utilize wood gasification technology and achieve very high overall boiler heating efficiency, according to Vaillancourt. “There is very little ash residue and little creosote buildup,” he said.
“The pellet boilers can work very much like an oil boiler,” Vaillancourt noted. With enough storage, they operate automatically, some with automatic feed systems, he added. They have daily automatic ash cleaning, but need to be manually cleaned every ten days to two weeks.
The main challenge in installing a solid fuel appliance is finding an appropriate location for installation, one that will meet current codes, Vaillancourt said. The State of Maine Oil and Solid Fuel Board licenses solid fuel installers; units must be installed to comply with the board’s regulations, to ensure a safe installation. Wood-fueled boilers are typically heavier and larger in size than an oil boiler, and are difficult to maneuver.
Solid fuel appliances do not generally account for a big part of Daigle Oil’s business, “although the sale of solid fuel appliances as a percentage of our total heating equipment sales in our last fiscal year was significant,” Vaillancourt said. “As has been the case in the past, sales of that type of equipment, going forward, will depend on the market conditions of competing fuels.”
Making the Case for Oil Heat
“We see people’s knee-jerk reaction to high oil or propane prices,” said Peter LaRose, senior vice president and general sales manager for distributor Nelson & Small Inc., Portland, Maine. The reaction is “to get rid of it,” LaRose said.
That can be a mistake, though, in LaRose’s view.
“We caution people,” LaRose said. “Don’t throw the baby out with the bathwater. It’s not the cost per gallon that people should consider. It’s how much they use.”
People intent on purchasing a wood or pellet burning system “had a gas pump mentality,” LaRose said, meaning they were buying systems that used the cheapest fuel at the time. Nelson & Small told customers that this was not the best basis for choosing a system. “What they need to do is upgrade their equipment to high-efficiency products,” LaRose said.
“A lot of oil-heating systems that were put in 20 or 30 years ago are single-stage. They’re either on or they’re off. They’re inefficient all the way up to when they reach [the desired] temperature and then they shut off and they’re inefficient all the way down.”
Using fuel oil with high-efficiency equipment featuring direct vent technology and modulating can reduce consumption by 40 percent or even 50 percent, LaRose said.
“We encourage all of our dealers to go out and sell new equipment. They will do a service for their customers – and they’ll retain them.”