With skyrocketing oil prices, the cost of heating homes is jumping off the charts. The Department of Energy expects heating bills to be 27 percent higher this winter for people who heat with oil and 41 percent higher for those who heat with natural gas. In cold-winter climates, this number will be closer to 30 percent. What can you do?

Some homeowners are turning to pellet stoves to provide supplemental (or in some cases, primary) heat. Pellet stoves look similar to wood stoves or fireplace inserts, but the similarities end there. Instead of burning wood, they burn small pellets made typically of recycled wood shavings, sawdust, or corn. Inside, they are very sophisticated combustion appliances that offer very low-cost heating. For more about this, see Advantages of Burning Pellets and Pellet Stove Energy Cost Comparisons.

Most pellet stoves produce a small fire that, concentrated in the center of the unit, burns hot. If you like the look of a fire, it's important to find a unit with a good flame pattern and large viewing glass. For some pellet stoves, you can get ceramic logs that help disperse the flames and give the fire a more traditional look.

One drawback of pellet stoves is that they're relatively complex. As shown in How a Pellet Stove Works, they have a variety of moving parts and motors that require occasional maintenance. It's a good idea to select a model that gives you easy access to any parts that need care. Regarding maintenance, it's not a bad idea to get a service contract because servicing a pellet stove can be a bit tricky.

When choosing between a bottom- or top-fed pellet stove, consider the benefits and drawbacks of each. A top-fed stove has a lesser chance of fire burning back into the hopper because of its pellet delivery system. But the combustion chamber is more likely to become impeded with ash and clinkers (the deposits that are caused by reheating ash).

Why we like it: • Wood-fire-like flame • Great warranty • Instructional video * Push-button ignition

As a result, many manufacturers of top-fed models recommend burning high-grade, low-ash pellets. Bottom-fed models don't require premium fuel because the ash and clinkers are pushed into the ash pan. Keep in mind that you have to remove the ashes about once a week with steady use. An easy-to-use, large-capacity ash access drawer makes cleanup easier.

The motors, of course, require electricity (some have battery backup units). A stove will need a nearby 110-volt outlet. If you live where power outages are frequent, you may want to have a gas-powered generator on hand so that you can use the stove if the power goes out.

Pellet stoves are measured in heat output range, also called heating capacity. Most have a rating of 8,000 to 90,000 Btus (British thermal units) per hour. To choose the right sized pellet stove, work with a knowledgeable dealer who can take into account the many variables and factors that will determine the best choice.

A variety of styles are available in both freestanding stoves and fireplace inserts. Some manufacturers also make pellet-fueled furnaces and boilers that are designed to take the place of—or supplement—conventional forced-air heating systems.