The newspaper is full of articles that predict fuel costs in the future for heating are going up 50 percent this year and maybe even more next year. It seems to make sense that with plenty of wood scraps in a manufacturing facility, heating with wood should help our pocketbook. Here are a few things to consider.

Safety and insurance

Certainly, the most important part of wood heating is to do it safely. I suggest that the first step is to contact your insurance company to make sure that you still have complete insurance coverage when you heat with wood. Find out now rather than waiting until you have a claim. The insurance company may have some requirements for you to burn wood. After all, they do have a vested interest in having you do it safely. In fact, some insurance companies will work very closely with you to help do this safely.

It would also be prudent to find out if there are any state regulations for small-scale wood burning. Your county extension office will probably be able to help answer this question.

Wood burners

There are many types of wood burners, starting with the simple 55-gallon drum with scraps of wood tossed in it (an accident waiting to happen, for sure), to wood furnaces burning slabs and large pieces of wood located away from your shop, to fluidized bed burners that take all sorts of wood fuel at any moisture content. When you explore the different options, the first consideration has to be the type of fuel you will have -- wet or dry wood, scraps of various sizes, ground up wood or dust. Once you have targeted one or two systems that look perfect for your operation, make sure they are burning the exact same fuel (moisture, species, particle size) that you will and then go visit them (or at least call them on the phone).

You also have to consider if the burner will operate 24/7. If so, you will need to have an automatic fuel storage and feed system. If not a 24/7 system, then you will have to use an auxiliary, non-wood-fired backup system for heating at night and on weekends. This backup system can be expensive to install and expensive to run.

Investment issues

In general, burning on a grate with air being blown under the grate and then through the fuel is very efficient and attractive as a burning system. But it is expensive, so only the larger operations would use it. Smaller shops would be more attracted to stoves or furnaces where wood is burned on the bottom shelf of the burner, similar to burning in a fireplace. Nevertheless, getting a stove or burner with a more sophisticated burning system is much more efficient and often is much more economically attractive.

Chances are good that as energy prices rise, money spent today on a wood fueled heating system will become a very wise investment. (Special note: My crystal ball says that we are going to see some tax credits or other government incentives for burning wood fuels, especially after the next Presidential election. Oftentimes, your county extension agent will be one of the first to hear of such credits through their connections with the state university specialists. So, in less than two years, capital investments may decrease substantially.)

Wood fuel costs

There is a lot of information comparing the cost of heating with various fuels. Certainly, the decision to heat with wood is an economic decision. Some of the information that you will find on the Internet, even if it is from the government, is wrong. I have prepared a comparison that is accurate and will help you evaluate wood heating (see chart). Note that this listing only compares fuel cost and does not include capital costs for the furnace (or burner), installation and maintenance, and fuel handling. As a result, electricity for fuel looks high, but in essence you are paying the electric company to have the burner and associated costs. Similarly, wood costs look low, but there are additional fuel handling costs that must be included.

To make this comparison more helpful, I have chosen to assume that the total energy demand is 100 million BTUs per year. This would be in the ballpark for a small shop. Again, this is just fuel cost and does not include the cost of the burner, storage system and so on. Note that in the chart, you can adjust the energy costs. For example, if you think that electricity cost will increase by 50 percent to 12 cents per kWh, you can increase the annual fuel cost by 50 percent.

As an example of how you might use this chart, let's compare burning wood in a furnace to using natural gas in an old burning system. We see that burning $25 per ton wood in a furnace will save about $1,450 per year ($1,626 - $195) on fuel cost compared to conventional, old natural gas burner that you presently have. This means you could afford a wood burner system, including storage, that costs about $17,000 more than a natural gas burner, using a 10-year amortization. In truth, it will be hard to get a wood-burning system that only costs $17,000 more than gas. But, if you now predict that gas prices are going to increase substantially (you make a choice here), then wood begins to look more attractive. And if you can get some sort of capital assistance (tax credit, for example), the wood certainly becomes very attractive. On the other hand, if you have a little cash to spend and burning wood is just not something you want to do, investing in a modern efficient gas or oil burner ($600 per year gain or more) might be a worthwhile investment.


There are very few locations in the United States or Canada where the smoke from a small wood-burning installation (including your home fireplace) is considered pollution. Yet, you might be concerned about this and maybe your local government will be concerned too.

Another big consideration is disposal of the ash. A ton of wood will generate about 12 pounds of ash from the minerals that are in wood. Although these minerals came from the soil in the forest, in burning we have concentrated these chemicals so they are now in one spot. We cannot legally dump this ash in a city dump in most cases. In some states, a special spreading permit can be obtained so that the ash can be spread and scattered on farm fields. Certainly, you could just dump the ash over the side of the hill, but that is not being responsible.


As wood people, sometimes we get blinded when it comes to burning wood. I encourage you to approach wood burning in a logical and financially sound manner. Wood burning for heat is already positive and over the next few years will become even more attractive.

Typical Seasonal Heating Systems


Fuel % Efficiency Annual Fuel Cost
Oil Burner ($2.70 per gallon)    
   Retention-head burner
   Advanced mid-efficiency furnace



Electricity ($.08 per kWh)    
   Central furnace or baseboard



Natural Gas ($10 per therm)    
   Powered exhaust



Propane ($1.80 per gallon)    
   Powered exhaust



Wood ($30 per ton; pellets $150 per ton)    
   Conventional stove
   High-tech stove
   Wood furnace
   Pellet stove



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