The first winter we spent in our small home in west central Michigan we used the oil furnace that came with the house. We spent about $1800 on fuel oil that winter.

By the next winter, oil prices had doubled. Worse, we had to call three suppliers before we found one willing to fill our tank in advance. We had no idea where oil prices were going, and like a lot of people, we were nervous.

It gets damn cold here. For a long time.

Suddenly we realized we might want to get an alternate plan in place.

We didn't have a natural gas line to the house and didn't have the cash to install one. We couldn't really afford to have an LP gas furnace installed either, so we bought a pellet stove.

Our first winter with the stove we cut our fuel costs to about $600 for the entire winter.

Pellet stoves are selling like crazy right now in the northern and midwestern United States. The first three places we went looking for one were completely sold out in August. Finally, a local big box home store put them up on sale through special order only, and we were able to buy our pellet stove for right around $1500.

We installed the stove ourselves in an afternoon and were able able to use it that same evening.

It worked great. It still works great.

Depending on the size of your home and the area you need to heat, a pellet stove will run you between $1,000 and $4,000 (including the installation kit, which is generally sold separately).

A wood stove will run you a third of that or less, depending on what kind of wood stove you buy.

Wood is what it is. Pellets have to be processed and purchased, just like gas, oil, or coal.

So why should you buy a pellet stove?

If you have a ready supply of wood and don't mind splitting, stacking, and curing it before use, then a wood stove might well be a good buy for you. However, pellet stoves offer a number of unique features that make them an attractive alternative:

• Pellets stoves are extremely energy efficient. Most pellet stoves burn at 98-99% efficiency, meaning they create very little ash and almost no toxic fumes. Manufacturers will tell you that you only have to empty the ash pan about once per week. That's true if you live in Florida. Here, we emptied it two or three times a week, but it's easy and quick.
  
• Pellet stoves have low clearance requirements. You can install a pellet stove within six inches of an interior wall without worrying about a fire hazard. Several options for venting are available, so you can install the pipe and the vent yourself without a lot of hassle.
  
• Pellet stoves are easy to install. Wood stoves are subject to stringent building code requirements because of the heat that builds up in the chimney, toxic fumes, and other issues. Most wood stoves need their own chimney. If you install a wood stove incorrectly, you can lose your home insurance or cause a fire. Most people choose professional installation for this reason, which has to be added into the cost. Pellet stoves, on the other other hand, can be safely vented directly outside through a side wall, like a dryer. Anyone with standard tools and basic home repair skills can install one safely and correctly.
  
• Pellet stoves have fewer parts to wear out. If you use standard chimney pipe for your wood stove you'll have to replace it every three to five years because the fumes will corrode it that quickly. You can buy double walled pipe and get more mileage, but with a pellet stove the burn is so clean you don't have to worry about corrosion at all.
• Pellet stoves can burn other waste items cleanly and cheaply. 'Multifuel' pellet stoves burn wood pellets made of compressed sawdust, dried corn, or even fruit pits. we have a friend who cuts his (already inexpensive) pellet supply in half by supplementing it with free cherry pits he gets from a friend with an orchard.
  
• Pellets are a completely renewable, clean burning energy resource. The first fuel pellets were made of saw dust left over from furniture manufacture, compressed to remove all the moisture. As pellet stoves become more popular, sawgrass pellets and wastewood pellets are becoming more widely available. Saw grass is an indigenous plant that can be dried and pressed into very cleanly burning pellets. Saw grass, unlike wood, can be grown each year, harvested, and then grown again.
  
• A pellet stove is cheaper than a new high efficiency gas furnace. A pellet stove is lots, lots cheaper than a new furnace. You can leave you old furnace installed and use the pellet stove for back up. Or you can use the pellet stove as you main heat source and use your furnace for back up. (We do the second.)

Owning a pellet stove isn't all a toasty pellety dream world. There are indeed drawbacks to pellet stoves in general, and to using them as your main source of heat in particular.

• You have to store up to a ton of pellets at a time somewhere on your property, and keep them dry. This isn't as awful as it sounds. A standard pallet stacked about four feet high is a ton of pellets. You can get them delivered or pick them up yourself if you own or can borrow a truck. We keep ours in the garage.
  
• You can't cook on a pellet stove or roast marshmallows over it.
  
• Pellet stoves use electricity to run the feeder that dribbles pellets out of the hopper into the burn chamber. You will want to use a fan too, which, depending on the type of fan you choose, may or may not add to your electric bill. You can buy a little automatic back-up generator for your pellet stove for not too much money. The generator will kick on by itself and keep the stove running in the event you lose electricity.
  
• You have to pour 40 pound bags of pellets in the hopper every 6 to 8 hours. This will lose its charm over time. (If you are lazy like me, that means, it will lose its charm fast.) However, pouring pellets in a hopper is way less annoying and constant than loading wood into a wood stove.  Some people build on a super-sized hopper outdoors so they only have to load it when they restock.
  

We like our pellet stove. We'd like a wood stove too, but realistically speaking, finding a steady supply of wood where we live would be much harder than finding plenty of pellets. We live near three pellet manufacturers, and we're right in the center of the fruit belt and the corn belt, so fuel for our pellet stove is easier for us to find (and cheaper to use) than wood.

Your situation might be different.

But if you're looking for good, cheap, clean heat that you can install yourself, a pellet stove will not let you down.