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Which is cheaper? To produce wood pellets on your own or buy from store?

24/05/2017

Promoting Home Pellet Production - using electric motor model and diesel engine model as illustrations

An average household uses about 5000 kg of wood pellets per year for their heating needs.*

(*Note: According to Sfgate website©, the average American household uses about 7300kg of wood pellets per year. For illustration purpose we reduce this number to 5000kg for a smaller household (©http://homeguides.sfgate.com/much-cost-run-pellet-stove-67241.html)

 

Slide1

One 15kg bag of wood pellets cost around $10.00.  This means, the household pays about $3333.00* per year for 5000kg of wood pellets

(*Note = $10/15kg x 5000 kg including delivery and taxes.  Price varies according to location)

 

Producing wood pellets at home

Single-phase electric motor
home pellet maker

Diesel engine powered motor home pellet maker

HPM20S_superior_electric HPM12dS_Superior_diesel02
  1. Equipment cost = $1800.00 (estimate)
    1. 8Hp Diesel motor (entry model) OR 3Kw single-phase electric motor pellet mill operating at max. 80% power
    2. Production output about 20kg/hr (max. 30kg/hr but we will use 20kg/hr for this illustration)
    3. Cost includes lubricant, 1 extra set of roller/die & one moisture content tester
    4. Cost includes shipping, custom and delivery charges
  2. Raw material cost = $375.00 (estimate)
    1. 1 ton (1000kg) of fine sawdust cost about $60.00 (including delivery)
    2. 1kg of sawdust can produce about 0.8kg of wood pellets (20% leave the compression chamber as unprocessed sawdust waste which can be reused)
    3. To produce 5000kg of wood pellets, we need about 5000/0.8 = 6250 kg of sawdust
    4. Cost of 6250kg of sawdust cost = 6250kg/1000kg x $60 = $375.00
  1. Electricity cost = $189.00
    1. Grid power = $0.30 for 1kWh (average)
    2. Number of hours to produce 5000kg of wood pellets = 5000/20 = 250 hours
    3. Add 5% more of 250 hours for preparing of die/maintenance = 12.5 hours
    4. Electric motor operates at max. 80% of 3Kw
    5. Therefore, estimate electricity cost = (250 + 12.5) hours x $0.3/kWh x (0.8 x 3Kw) = $189.00

 

  1. Diesel fuel cost = $1102.50
    1. Diesel per litre around $1.4 (estimate)
    2. Diesel fuel consumption (estimate) = est. 3L per operation hour
    3. Number of hours to produce 5000kg of wood pellets = 5000/20 = 250 hours
    4. Add 5% more of 250 hours for preparing of die/maintenance = 12.5 hours
    5. Therefore, estimate diesel fuel cost = (250 + 12.5) hrs x 3L/hr x $1.4/L = $1102.5
Estimate cost of producing 5000kg wood pellets at home (Using single-phase electric motor home pellet maker)

= item 1 + item 2 + item 3

= $1800 + $375.00 + $189.00

= $2364.00

Estimate cost of producing 5000kg wood pellets at home (Using diesel engine motor home pellet maker)

= item 1 + item 2 + item 3

= $1800 + $375 + $1102.60

= $3277.50

Summary

  1. Using single-phase electric motor home pellet maker, the cost of producing 5000 kg of wood pellets at home can save as much as 30% (compare with buying at the store)
  2. Using diesel engine motor home pellet maker, the cost of producing 5000 kg of wood pellets at home can is almost the same, but if you produce more, the savings will increase.