As the name suggests, pellet stoves burn “pellets.” These actually are recycled sawdust, wood shavings, corn, walnut and peanut shells, and similar biomass wastes that are ground up, compressed, and extruded. The 3/8-to-1-inch-long pellets look like rabbit feed and are sold in 40-pound bags. Pellets turn wastes that would otherwise be dumped at landfills into energy, lessening our dependence on oil.

Both because of the fuel’s consistency and the stove's combustion mechanics, pellets burn very hot. This means they burn more efficiently and more cleanly than wood.

Intense compression squeezes the moisture out of the pellets, dropping their moisture content to below 8 percent, which is very dry compared with cord wood, which has from 20 percent to 30 percent moisture.

The drier the fuel, the more heat it can produce. And the hotter the fire burns, the more fuel it can consume. Compared with EPA-certified wood stoves, which give off about 5 grams of particulates per hour, pellet stoves give off less than 1 gram per hour.

Combustion efficiency is a measure of how much of a fuel is converted to energy by an appliance. Pellet stoves offer 75 percent to 90 percent overall efficiency (be sure to look for “overall efficiency” ratings when comparing makes). In fact, so much heat is extracted that most pellet stoves may be vented horizontally out through a wall instead of through a conventional chimney (see How a Pellet Stove Works).

Pellets also create much less ash than cord wood and produce far less creosote, a common wood stove and fireplace hazard that blackens glass doors and collects in chimneys, potentially causing chimney fires.