Pellets are made of compressed sawdust. They are about the size of rabbit food pellets and are a good fuel alternative to wood, coal or gas. Before deciding on a pellet stove, be sure that there is a supply available near your home. Most pellet manufacturers are based in the northwest and Rocky Mountain regions, but there are retailers available throughout the nation. You may be able to source suppliers if you live near a heavily wooded area. Wood pellets are available in 40lb bags.

One main advantage of a pellet burning stove is that it does not need a typical chimney. Instead, the few gases can escape through a hole in the wall directly behind the appliance using a Pellet Vent or Class L chimney of stainless steel interior and galvanized or aluminum exterior. If you already have a regular chimney, you can use it, but it must be modified with the addition of a smaller pipe, usually of stainless steel. Pellets are clean and easy to use and, depending on your stove model and heating needs, may only need to be added once a day to keep the stove burning. Pellets are poured into a hopper and are transferred slowly by auger to the fire chamber.

Some models of pellet stoves are built to burn corn as well, or an inferior grade of pellets, something to be considered for a time when pellets may be made from something other than high-grade sawdust. The outside of the stove does get hot, a consideration if you have small children. The stove relies on mechanical air-supply systems to vent air from the home.

Pellet stoves also use fans to assist the air circulation in your home, so if your electricity goes out, you won't be able to use the stove. There are battery packs available on some stoves to circumvent this problem. The US Department of Housing and Urban Development has strict guidelines in place as to where pellet stoves may or may not be installed. For instance, they may not be installed in new manufactured (mobile) homes.

Pellet burning appliances cost upwards of $1,200 or more, but when comparing costs of different fuel stoves, remember to include the complete installed cost of each as well as the fuel and fuel consumption. While some fuels seem more expensive, they last a lot longer or give of much more heat, so this must be taken into consideration too.