Running costs of pellet heaters versus alternatives


One of the most important questions to ask when choosing a new heating system is, of course: how much will it cost to run? Here we present two ways of answering this question.

  1. The first is to estimate the cost per one unit of heat output for each of wood pellets, firewood, reverse-cycle air conditioning, gas and electrical resistance heating (electric bar heaters etc). This is the most accurate way to compare heating costs across different fuels.
  2. It can be difficult though to translate this cost into an actual day-to-day running cost. So to give a sense of the day-to-day cost, we will also show the cost of running each of the pellet heater, reverse cycle unit, gas heater and electric heater for two and a half hours a day on a high setting and two and a half hours a day on a low setting. This is the calculation used for energy efficiency ratings when comparing energy consumption for different heating appliances (although we don’t include the period of time on standby).  It is not quite as accurate as the first measure because heat outputs are not going to be exactly the same (heater efficiencies will differ and heater outputs on “low” settings will be different) but it will give a sense of the difference in running costs.

The chart below shows the first way of measuring the running costs. There are some assumptions that need to be made to estimate these costs but the most important are the underlying cost of the fuel. The costs we used were: for pellets, we used the cost (including delivery) of pellets for a customer who has purchased a heater from EnviroHeat Australia (we give a 10% discount on heating pellets to heater customers); for firewood we assumed a cost of delivered and split firewood plus some extra for kindling/firelighters of $270/t (the average price in Perth); for mains gas we used the WA regulated price of 13.26c a kWh; for regional gas we used the regulated cost of gas in Albany, WA of 16.71c kWh; for electricity we used the WA unit price of 26.5c kWh and for bottle gas we assumed a 45kg bottle cost $115 and annual hire was $17 (half the usual cost because we assume the bottle gets refuelled once).

Cost of heating chart

The chart shows that pellet heaters are one of the cheapest heating options available. Reverse cycle air conditioners/heat pumps remain the cheapest (although they struggle to function when the outside temperature falls below 5 degrees and, in WA at least, we have an increase in electricity prices coming soon) with pellets a similar cost to firewood and significantly cheaper than gas or electric bar heaters. A switch to a pellet heater from a gas heater could reduce your heating bill by 30% if you are on mains gas and by over 50% if you use bottled gas.

So that gives the most accurate measure of the cost of heat delivered into your living room. An alternative approach is to simply ask, “if I ran each heater for two and a half hours on its high and two and a half hours on its low setting each day, what would that cost?”. It won’t be quite as accurate because heater output and efficiencies are going to differ somewhat but it will still be a useful guide. In this case, a standard 7kw heat output reverse-cycle unit will cost about $2.40 a day to run, a pellet heater will cost $3.30 a day, a mains gas imitation log heater will cost $4.00 and regional and bottle gas will cost $5.10 and $6.60 respectively.

Overall, pellet heaters provide a cost-effective way of heating your home while still being attractive, sustainable, convenient and environmentally friendly.

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