Sales Strong, Future Unknown
By Bill Sendelback
Despite the recent surprises and resulting uncertainties of the EPA’s New Source Performance Standards (NSPS), sales of wood-burning stoves and fireplace inserts continue to make a comeback, according to most manufacturers.
Wood stove sales in the U.S. rose 5.2 percent in 2013, a welcome sign, but still off 39 percent from the 2008 high water mark of 127,196 units. Wood-burning fireplace inserts staged an even stronger recovery last year, up more than 14 percent. The Canadian market kept pace, with wood stove and insert sales both up 6.5 percent for the year.
|Defiant FlexBurn in Bordeaux from Vermont Castings.|
First quarter 2014 manufacturer shipment numbers promise an even better year for wood burners. Wood stove shipments in the U.S. were up 12.9 percent, and fireplace insert shipments 8.2 percent. Sales in Canada didn’t fare as well; wood stove sales were down five percent, while fireplace inserts continued strong; they posted a huge increase of 25.5 percent.
In the U.S., cast-iron wood stoves grabbed a little more market share last year, up 6.5 percent, while sales of steel models rose only 4.5 percent in 2013. Steel stoves, however, still hold a big lead in unit sales, representing 56 percent of the wood stove market, while cast-iron models total 35 percent and stone/cast-iron units are at nine percent.
Steel models fared even better in Canada, taking 89 percent of wood stove sales, while cast-iron units were at 11 percent. EPA-certified non-catalytic wood stoves continue to dominate wood stove technology, earning 83 percent of U.S. sales, while sales of catalytic models totaled 17 percent for the year.
As a further indication of the renewed growth in wood stove sales, 2.5 million U.S. households now use wood as their main fuel for home heating, up from 1.9 million in 2005, according to the U.S. Energy Information Administration (EIA). An additional nine million households use wood as a secondary heating source. In the New England and Mid-Atlantic regions, there was more than a 50 percent increase, from 2005 to 2012, in the number of households that rely on wood as their main heating source.
“Overall, we had a really good biomass sales year in 2013,” said Chad Hendrickson, Quadra-Fire brand manager for Hearth & Home Technologies (HHT). “Wood stove sales are good this year, too, strong in all regions of North America. This could be the banner year we all are hoping for. 2013 was such a good year that we saw sales driven to the higher-end products as consumers were more willing to spend.”
|Explorer II cast wood stove from Quadra-Fire.|
Like many manufacturers, HHT is seeing a trend toward cleaner, simpler designs in wood stoves, but not necessarily modern designs. As a result, the company is using fewer scrolls and details in its new cast-iron models, such as its new Quadra-Fire Explorer II, a mid-size wood stove using Quad’s four-point, non-cat burn system to produce 65,800 Btus and 2.17 gph of emissions. Small and large Explorer models are planned for later this year.
HHT is one manufacturer that has not let the uncertainty of the NSPS slow its R&D efforts. “We’ve continued to improve and make changes,” says Hendrickson. “You can’t hold back waiting for what’s next.”
“Sales never really slowed down after the season,” according to Glen Spinelli, president of Regency Fireplaces. “But with the momentum from last year, we’re up over last year. Dealers tell us that, with the cold winter in many areas, wood-burning is more popular now. People are coming into their stores to buy wood stoves.”
Regency is also seeing the trend to cleaner designs, but to bigger glass to provide the look of a more open fire. “Stoves are becoming furniture,” Spinelli adds. “They don’t have to look like your grandfather’s stove.”
The company has revamped its entire wood stove and insert lines, including raised pedestals for its stoves and new doors for both its stoves and inserts, giving the lines a more “transitional” look.
Regency is another company that has not let the NSPS slow it down. “With hybrid technology, combining catalytic and non-catalytic technology, we’ll meet the EPA standard no matter what they do,” says Spinelli. “We’ve gone full speed ahead to be prepared. The proposed test methods are very confusing, but we’ll be compliant no matter what.” Regency has introduced its CS 2600 wood stove, a cast-iron, transitional design that delivers up to 27- to 30-hour burn times
Every hearth category is up at Travis Industries, but wood stoves and inserts top the sales increases, says Sales director Perry Ranes.
“All regions are up, but New England and the Mid-Atlantic, where winter hit the hardest, are up more. We’ve already had to bump up our sales forecasts.
“This NSPS fiasco has been incredibly frustrating. We don’t know what the test protocols will be or what the EPA will want. But we are recertifying all models that we can, to at least give them five years of sales life.”
|Evergreen wood stove from Avalon.|
Travis has, however, added to its Rockport medium-sized, cast-iron wood stove that uses hybrid burn technology to its Lopi line, and to its Avalon line an Evergreen medium-sized, steel wood stove with an ash pan and a “unique” door to its Avalon line.
Vermont Castings Group’s (VCG) sales are up this year by double digits for both wood stoves and inserts, says Jess Baldwin, senior vice president of sales and customer service.
“Dealers are feeling very positive,” he says. “All regions are up, but the Northeast is up significantly, and the Southeast is well up, too.” VCG is seeing a “significant” increase in its cast-iron models, while its steel models are slightly ahead of last year. But more important, VCG is seeing its average sales price go up with the sales of higher-end models.
The company is introducing no new wood models because of questions on possible changes to the NSPS, so the company has been working on cosmetics, clean-view doors and new colors.
Jim Merkel, national Sales manager for Jøtul North America, is “very pleased” with sales increases this year for its wood-burners. Fireplace inserts are doing particularly well, and while a year ago smaller and medium wood burners were selling, now medium and large freestanding wood stoves are leading the way. Jøtul is not introducing any new wood stove or insert models this year, but is recertifying current models to ensure five years of sales life.
|Ashford 20 from Blaze King.|
Blaze King has seen “very, very brisk” sales of its wood stoves and inserts, says vice president Chris Neufeld, particularly inserts and high-end models. Neufeld believes that awareness of the upcoming NSPS has encouraged consumers to buy wood stoves now because of the uncertainty of the possible effects of the new rule.
“We’ve been very, very slow to bring out new products because of the uncertainty of the NSPS,” he says. “The proposed NSPS as it is written would put Blaze King out of business. In these ‘worst case’ standards, none of the four low-burn rate tests can exceed 1.3 gph. This will eliminate most of our industry.”
Despite waiting for the NSPS, Blaze King soon will introduce its Ashford 20, a traditional wood stove similar to its Ashford 30, with a 1.8 cu. ft. steel firebox and a cast-iron shell.
Proposed NSPS Big Threat to Industry
When the EPA began talking about its new proposed NSPS a few years ago, there appeared to be a few challenges for the hearth industry, but for the most part, it seemed a proposal hearth manufacturers could support and live with. That is, until Jan. 3, 2014, when the EPA finally published its proposed NSPS for residential solid fuel appliances.
In what now appears to be typical fashion for the EPA, this proposal throws huge, unexpected challenges at the hearth industry and uses unfounded and unverified data to support its positions.
The result could be an NSPS that extinguishes solid fuel-burning in the hearth industry.
While the proposed step one of the NSPS continues to set the maximum emissions level at 4.5 gph for most wood- and pellet-burning appliances – the current Washington State maximum and a level most manufacturers have met or exceeded – the NSPS proposes a step two that would reduce maximum emissions to 2.5 gph. Additionally, a step three may be proposed that would reduce emissions levels to 1.3 gph.
The industry questions whether these lower emissions levels are economically and environmentally effective, especially since it is estimated that there are still more than 11 million dirty-burning, non-EPA certified wood burners still being used.
Many believe it would be more effective to eliminate these old, polluting wood stoves, perhaps through stove change-out programs, than to take aim at the products that already emit extremely low emissions.
But the biggest and most detrimental surprise in the NSPS is its proposed testing methods. In addition to questionable methods, the NSPS suggests these tests should be done using cordwood rather than the currently used cribs.
“The stoves might have to be tuned for testing with cribs and cordwood, but the testing method with cordwood has not yet been determined,” according to John Crouch, the HPBA’s director of Public Affairs. “So many changes will be needed going from cribs to cordwood. You may be able to tune the stoves to pass, but they probably will not work in the real world.
“But a big impact on our industry when the NSPS is final is that every covered solid fuel hearth appliance will have its efficiency measured and reported. Over time, retailers will have to stop using grams per hour as a measure of efficiency. Grams per hour and efficiency are not the same thing.”
The NSPS proposes to phase in emissions limits in two steps over five years. The first step – 4.5 gph – goes into effect 60 days after the NSPS is final, published in the Federal Register and signed by the EPA administrator; the second step – 2.5 gph – goes into effect five years later. The third step that EPA is considering – 1.3 gph – would phase in all three steps over eight years.
|CI2600 from Regency.|
Other key issues with the proposed NSPS are grandfathering of previously EPA-certified models and how long manufacturers and retailers will have to sell their older EPA models.
The public comment period for the now proposed NSPS ended May 5, 2014; it elicited spirited comments from both the industry and the HPBA. The EPA must respond to these public comments or it may face grounds for invalidation of any final rule.
“The NPSP will not go into effect for at least a year after this public comment period,” Crouch speculates. It may be finished about the time of our Nashville trade show, but it won’t become effective until at least mid-May, 2015.”
The HPBA is suggesting to manufacturers that they certify new models to the current EPA standards in order to at least take advantage of the resulting five years of certification and sales. That includes pellet stoves, many of which were never EPA-certified but will be required to be under the NSPS. A loophole in the current EPA standards, the K list, also allows manufacturers to re-certify current models under the current standards if “substantial” changes are made to that model.
“If the EPA has its way, new regulations will make life harder for those who most need wood stoves,” said Paul LePage, governor of Maine, in an April 5, 2014, Wall Street Journal column. “And the EPA’s proposed rules will hit stove manufacturers hard. The EPA’s proposal is unlikely to reduce the amount of harmful wood smoke in the air. It may do just the opposite. The rule would make it prohibitively expensive for homeowners to purchase a new, more efficient stove, so many people will just hold on to their old stove. The EPA could reduce air contaminants just by instituting an incentive program for stove owners to buy newer models.”
Taking a proactive stance toward the proposed NSPS, the HPBA has worked with members of the U.S. House of Representatives, resulting in House bill H.R. 4407 dated April 4, 2014, also called the “Wood stove Regulatory Relief Act of 2014.”
Introduced by representatives Blaine Luetkemeyer (R-MO) and Gregg Harper (R-MS), H.R. 4407 requires the EPA to “undertake a more responsible, common-sense approach to the NSPS by preventing the EPA from establishing the costly and stringent step two, requires it to address this with data when it next revises the rule in eight years, requires the EPA to allow adequate sell-through time of covered products for manufacturers and retailers, prevents the EPA from making any changes in certification or auditing processes for at least three years and requires the EPA to allow EPA-certified products to be grandfathered in,” according to the HPBA.
The next step in the bill process is to locate Democratic sponsors for the bill because H.R. 4407 will go nowhere without Democratic support. According to John Crouch, wood stove sales appear headed in the right sales direction for at least this year, but the product’s future is highly dependent on the final NSPS.