We found this article in Popular Mechanics.  It is one of the best pieces we have seen addressing heating with wood, home heating costs, fuel alternatives to reduce overall heating costs and renewable energy.

A few significant points to highlight:

1. At an average price of $200 per cord, firewood is one of the cheapest fuels per unit of heat. Prices tend to rise and fall along with fossil-fuel heat sources, but because wood is sourced locally, the shifts in cost are less dramatic.

2. The impact of a widespread switch to biomass would be huge. Heating accounts for about half of U.S. residential energy consumption. The most popular fuel, natural gas, heats 50 percent of U.S. homes. About a third of the country heats homes with electricity. John ­Ackerly, president of the Maryland-based Alliance for Green Heat, says, “Electricity is too inefficient and too expensive to make and waste on heat.” The same goes for the 5 billion gallons of oil and 15 billion gallons of propane that are used annually to heat 20 percent of American homes.

3. Great chart: How to Heat a House.

Excerpts from Is Wood the Best Renewable Fuel for Heating?

Wood heating isn’t what it used to be. It’s now clean, efficient and, in the right stove, high-tech. And, as it’s always been, it’s a renewable resource. Here is what the future holds for wood heating.

Cordwood Stoves

Wood stoves balance performance and cost. The best stoves are 60 to 70 percent efficient at converting well-seasoned wood into heat. At an average price of $200 per cord, firewood is one of the cheapest fuels per unit of heat. Prices tend to rise and fall along with fossil-fuel heat sources, but because wood is sourced locally, the shifts in cost are less dramatic.

Wood is cheaper if you harvest your own. Jerry Marquez, a homebuilder in Libby, Mont., heats his two-bedroom house for about $200 per year, but he spends a couple of grueling weeks each spring harvesting and splitting standing deadwood in Kootenai National Forest. Like Richards, he shovels ash from his stove weekly. It’s hard work, but the price is right, and Marquez says he loves the way the flames crackle in his Enviro Kodiak 1700 stove, warming his living room and kitchen on subzero Montana mornings.

Marquez’s house is small enough to get by on what is essentially a 74,000-Btu room heater. Lee Richards heats his larger Virginia ranch home by strategically installing multiple wood stoves to blanket the house in heat. But the stoves cost $3,000 to $4,200 each (including flue installation). So pushing a single stove to its limit can make more economic sense. “You have a nice toasty living room and kitchen and maybe the edges of your home are a little chilly at five o’clock in the morning,” says Charles Niebling, a forester in New Hampshire.

Wood stoves have become much cleaner since the EPA began regulating their maximum particulate emission levels. Stove manufacturers first added catalytic combustors—tubes with honeycomb chambers coated in a corrosion-free noble metal, usually palladium. Similar to catalytic converters on cars, these turn exhaust gases into heat. Catalytic-combustion stoves have been improved by a new process called secondary burn, which converts wood smoke to heat, drawing extra fuel from logs and boosting stove efficiency.

Another option is a masonry stove, sometimes known as a Russian stove. These built-in units resemble free-standing fireplaces made of dense stone or brick, with snaking channels leading from the firebox to the chimney. The channels maximize the transfer of heat from the gases to the surrounding masonry, allowing the stoves to store and radiate warmth from very hot fires for long periods. They are efficient and clean-burning and require less stoking, though they are expensive because they are almost always custom-built. Installed prices range from $13,000 to well above $20,000.

Pellet Stoves

Owners of these stoves can’t harvest their own fuel, but what they give up in price and freedom they gain in ease of use. A $250 ton of pellets yields three-quarters of the heat generated by a cord of wood, yet pellet stoves operate at higher efficiency rates—usually around 80 percent. Thermostats allow some pellet stoves to automatically control temperature and heat output.

Pellet fuel offers many advantages over cordwood: It has a moisture content of less than 8 percent, compared to 20 percent or more for seasoned wood and 50 to 60 percent for unseasoned wood. (Btus are wasted in vaporizing moisture.) Dry pellet fuel is inert and nontoxic. It has an infinite shelf life, and it doesn’t harbor bacteria, fungus, bugs or mice. Its energy density rivals that of coal, but it doesn’t produce as much ash as either coal or wood. A high surface-to-volume ratio makes pellets combust more like kindling than logs. The pellets’ standard size means they can be fed automatically by the turn of an auger. Once pellets enter the stove’s fire pot, airflow is metered to maintain a steady burn. The hopper usually must be refilled daily. Efficient combustion produces particulate emissions levels of around 1 to 3 grams per hour—comparable to oil or gas.

Pellets are cheaper than oil, propane or electricity, and they don’t cost much more than natural gas. But because of the recent collapse in the housing market, the number of lumber and furniture mills producing high-grade sawdust has decreased, driving the price of a ton of pellets from less than $200 to $250.

Jerry Whitfield, a former Boeing engineer in northern Washington, is tackling the price problem by improving stove technology. Whitfield is researching a next-generation stove that burns a variety of pellet types and grades, including pelletized grasses, straws, hay, rice husks, sugarcane bagasse, corn stover, even poultry manure.

“I can envision a future,” Freihofer says, “where there would be the equivalent of a local community pellet mill. It would recycle everything from newspapers to yard trimmings to waste wood, the way a grist mill might have operated 150 years ago.”