While wood pellet sales have been increasing rapidly over the past number of years as people seek an alternative to rising home heating oil price increases, the actual availability of wood pellet has been decreasing.
Unless you live in an area where there is a high demand for wood pellet you are faced with the ever increasing costs of trying to source good quality wood pellets. The demand for wood pellet is increasing but it does so in a disjointed fashion. Wood pellet sales tend to lean toward rural areas where there is a ready made supply of wood pellet raw material. Urban dwellers that have wood pellet stoves are faced with higher transportation and storage costs. This acts as a barrier to wood pellet popularity.
Increasing oil prices has a positive impact on wood pellet sales as householders seek to hedge their exposure to the fluctuations in the oil market. In turn this leads to an increase in demand for wood pellet. In any true market suppliers will seek to satisfy this demand. Unfortunately there is a lag between the time of an oil price increase and the increase in demand for wood pellet. The cause of the time lag is primarily down to the costs associated with changing from an oil based heating system to one that is based on wood pellet.
Wood pellet sales have also been impacted by the perceived notion that installing and operating a wood pellet stove is expensive. While admittedly initial installation costs can be high, the long term savings to be made by using wood pellets rather than home heating oil are too significant to ignore.
Until the expensive image of wood pellets is tackled along with the real lack of availability, wood pellet will continue to experience volatility. It is up the wood pellet suppliers to continue their efforts to sell wood pellet as an environmentally friendly and economically viable alternative to oil.