Maintaining Industry Stability

All looks good for Maine’s pellet industry. Spurred by $5,000-per-unit consumer rebates from the state’s Efficiency Maine energy agency, pellet boiler firms are installing at a combined rate of one unit per day.
By Bill Bell | November 02, 2014

“Girl, we couldn’t get much higher…”  (Light My Fire, The Doors, 1967.)

All looks good for Maine’s pellet industry. Spurred by $5,000-per-unit consumer rebates from the state’s Efficiency Maine energy agency, pellet boiler firms are installing at a combined rate of one unit per day. These firms’ annual sales targets are being met or exceeded; in one instance, amounting to a doubling of sales over an already robust 2013. The Pine Tree State’s four pellet manufacturers are running all-out and are having to turn down requests. Consumers visiting industry booths at the state’s large fall fairs are much more informed about pellet heat than in previous years. Clearly, the corner is being turned. And yet…

“We need to maintain stability in the boiler rebate program,” says Jacob Roberson, partner in Portland-based Interphase Energy, which imports and distributes Kedel boilers from Denmark. “We’re nowhere near critical mass.”

“As we displace existing technologies, we’re going to get more and more pushback from our competitors,” warns Les Otten, founding partner of Maine Energy Systems, which, in the ski town of Bethel, assembles and distributes Austria’s OkoFEN boilers from New England to Alaska.

The Efficiency Maine boiler rebate program is scheduled to stay on track, at least through the budget year ending June 2015. This program is an outstanding example of what a state agency can do when it decides not to act like a state agency. Under Executive Director Mike Stoddard, the overriding priority has clearly been to get insulation, weather sealing, and better heating and lighting equipment into Maine homes and business firms, and the agency has operated like an aggressive retailer rather than a bureaucracy. Partnerships with private sector contractors have been emphasized, and the agency has aggressively branded itself with Maine’s public.

Boiler firms also serving the New Hampshire market note that, despite a rebate program slightly higher than Maine’s ($6,000 per unit as opposed to $5,000), “the equipment isn’t exactly flying off the shelves over here.” The variable? The New Hampshire program is conducted through a finely tuned regulatory agency, the state’s Public Utility Commission, which lacks the promotion capacity and pizzazz exhibited by Efficiency Maine.

But what about the “pushback” of which Otten warns? He names three areas that competitors to pellet heat are likely to cite, one being alleged depletion of Maine’s forest resource. While Maine is the most forested state in the U.S., this is not readily apparent to mall shoppers in the southern part of the state. Maine’s industry may need to publicize the fact that virtually all of the wood going into pellets is from certified sustainably managed woodlands, where trees are actually growing faster than they are harvested.

The second potential objection to the expansion of pellet heat, alleged air pollution, is equally bogus. Maine’s industry will be exploring a partnership with American Lung Association of Maine, whereby homeowners are encouraged to swap out aging cordwood stoves—the real cause of woodburning air pollution—for EPA-approved wood and pellet stoves. This should help to get across the point about the high-intensity burn, low-particulate matter characteristic of pellet heat. 

The third issue, “Will there be a ready supply of pellets?” poses a challenge.  There is adequate capacity among Maine’s four pellet manufacturers. Lacking, however, is foresight among pellet retailers, particularly the Big Box stores, whose conservatism in placing orders in 2013 led to empty pallets when the Maine winter turned out to be as long and cold as, well, Maine winters used to be. While the chains have reportedly upped their orders this year, small retailers who only just recently have decided to add bagged pellets to their merchandise are being put on waitlists or simply turned away.

Bulk delivery customers will all be served, and the supply side of market will find ways to respond to increased demand for bagged product. The pellet mill in Corinth will be coming back on line after undergoing—via new ownership—some significant equipment upgrades, and the mill in Athens will be expanding production as part of a huge project to generate its own electricity.

The future remains bright, so bright that we’re still wearing shades.

Author: Bill Bell
Executive Director, Maine Pellet Fuels Association
[email protected]