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Hearth & Home January 2017

Facts, Figures & the Future II

By James E. Houck

Despite the uncertainties in weather and the price of fossil fuels, it’s clear that there remains a huge market for hearth products, and it’s increasing every year.

Nearly a decade ago, in an article entitled “Facts, Figures & The Future,” (Hearth & Home, March 2007), forecasts were made on what the future might hold for the various products that constitute the hearth industry. Data provided by governmental agencies, universities, and trade organizations were reviewed, along with environmental policies and energy trends, to provide a grounded basis for the forecasts. Now, almost 10 years later, it’s time to repeat that effort.

What was said in March 2007 still holds true today. The prediction of future sales is the bottom line for any industry. The hearth industry is in an enviable position in that the number of households in the United States will most assuredly continue to increase with population growth, and the need for heat will not go away, thus moderate baseline growth is nearly guaranteed.

Short-term fluctuations due to consumer reactions to a particular fuel’s cost and availability, and year-to-year changes in weather and housing starts, are where the rub lies. Both environmental regulations and perceptions, along with the economy in general as it impacts remodeling and replacement purchases, also certainly will play a role.

New Homes

The population of the U.S. is predicted to climb by more than 26 million people over the next 10 years. Not only will there be a continued and expanded demand for space heating units in new dwellings, but older space heating units also will need to be routinely replaced. According to the U.S. Department of Energy, more than 23% of the residential space heating equipment was more than 20 years old as of 2009. Beyond utilitarian heat, the fascination with fire seems almost primordial, with 49% of new one-family houses completed in 2015 having one or more fireplaces. This demand won’t change overnight.

Millions of Housing Units – 2013
Millions of Housing Units for the year 2013

There is a huge market for all things related to home heating, as well as the aesthetics of fire. Over 99% of homes in the United States have main heating equipment; slightly more than one-third have at least one fireplace, and slightly less than one-third have one or more secondary heating units. Secondary heating units are typically such things as wood stoves, fireplace inserts, heater-rated gas fireplaces, etc. About one in five homes with a fireplace or a secondary heating unit has more than one installed.

New Housing Units Completed by Year
(X 1000)
New Housing Units Completed by Year

Housing construction still has not returned to the peak reached in 2006, but all indicators are that it’s increasing slowly. And 958,000 housing units completed in 2015 is still a large number and a substantial market for new hearth products.

Unfortunately, the number of multi-family units is becoming a bigger fraction of the total of new housing units. Multi-family units are less likely to have hearth products installed than single-family units. For example, the percentage of multi-family units completed in 2015 that had a fireplace was only five percent as compared to 49% for single-family units completed that same year.

New Families and New Housing Units
(all data X 1000)
New Families and New Housing Units

Beyond the hoped for continuation of a resurgence in housing construction stimulated by an improving economy, it seems reasonable that there will be some “catch up.” In the most recent five years for which there are data (2010-2015) there were 972,000 more new families in the population of the U.S. as compared to housing units. In comparison, during the five-year period of 2000-2005 there were more new housing units than new families. Additional catch-up new homes with their attendant hearth products seem to be a likely future scenario. (The average family size in 2000 was 2.62 members. The average family size in 2015 was 2.54 members.)


In a survey conducted in 2012 for the Hearth, Patio & Barbecue Association, over a third of hearth owners were considering remodeling in the next year or two. Possible remodeling activities were listed as: upgrading with new model, adding outdoor fireplace to patio/deck, changing decorative look with accessories, surround, mantel, adding fireplace to an interior room, adding a room that will include wood fireplace/stove, adding stove to an interior room, adding pot-bellied stove, wood stove, gas stove, or country stove to an interior room of home, and converting wood fireplace to gas.

The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending in owner-occupied homes. The indicator is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify major future turning points in the business cycle of the home improvement and repair industry.

The LIRA projects the annual rate of change in the value of residential improvements and repairs in the U.S. Home improvement activities include remodeling, renovation, alterations or replacements of home components to existing owner-occupied properties that add value to the home, whereas maintenance and repairs simply preserve the current value of the home.

Experts with Harvard’s Joint Center for Housing Studies have stated that, “A healthier housing market, with rising house prices and increased sales activity, should translate into bigger gains for remodeling this year and next.

“As more homeowners are enticed to list their properties, we can expect increased remodeling and repair in preparation for sales, coupled with spending by the new owners who are looking to customize their homes to fit their needs.

“By the middle of next year (2017), the national remodeling market should be very close to a full recovery from its worst downturn on record. Annual spending is set to reach $321 billion by then, which after adjusting for inflation is just shy of the previous peak set in 2006 before the housing crash.”

Homeowner Improvement Spending
Homeowner Improvement Spending

As of 2013 the rebound in homeowner improvement spending had lifted the remodeling market back to nearly $300 billion, and it’s projected to be well over $300 billion in 2016 (not shown).

Leading Indicator of Remodeling Activity - Second Quarter 2016
Homeowner Improvements & Repairs
Four-Quarter Moving Totals Billions
Four-Quarter Moving
Rate of Change
New Families and New Housing Units

Notes: The former LIRA modeled homeowner improvement activity only, while the re-benchmarked LIRA models home improvement and repair activity. Historical estimates are produced using the LIRA model until American Housing Survey data become available. Source: Joint Center for Housing Studies of Harvard University.

Beyond the hoped for continuation of a resurgence in housing construction stimulated by an improving economy, it seems reasonable that there will be some “catch up.” In the most recent five years for which there are data (2010-2015) there were 972,000 more new families in the population of the U.S. as compared to housing units. In comparison, during the five-year period of 2000-2005 there were more new housing units than new families. Additional catch-up new homes with their attendant hearth products seem to be a likely future scenario. (The average family size in 2000 was 2.62 members. The average family size in 2015 was 2.54 members.)

Millions of Housing Units by Fuel
Millions of Housing Units by Fuel

The single largest source of heat for U.S. homes is supplied by natural gas-fueled, central warm air furnaces with 44.3 million homes so equipped in 2009. Homes with electric central warm air furnaces followed with 19.1 million homes. Not surprisingly with the zone heating characteristics of traditional wood stoves, more homes reported using cordwood fuel as a secondary source of heat than as a main source.

* An additional 0.9 million households use pellet fuel and an additional 1.2 million households use scrap wood. No information is available to proportion those fuels between main and secondary use.


Not surprisingly, fuel availability and cost have been, to a large part, responsible for the character of space heat in the U.S. and are pivotal in projections of future markets. Each fuel has a unique history and “story to tell.” Regionalism cannot be ignored. For example, in 2014, 61% of housing units in the South census region had electricity as their main heating source as compared to only 14% in the Northeast census region.

In contrast, less than two percent of housing units in the South census region used fuel oil as their main heating source, while 26% of the housing units in the Northeast census region used fuel oil. Similarly, natural gas usage is regional with its use in the Midwest the highest at 68% of housing units as compared to the South census region where it stands at only 31% of housing units.

To make a grounded basis for projections each major fuel category needs separate and detailed consideration.

Natural Gas and Propane

Natural gas is the fuel responsible for the largest portion of home space heating in North America. With the expansion of the natural gas distribution network starting in the mid part of the last century and continuing to this day, more and more homes have natural gas hookups. Currently natural gas availability is high and cost is low due to fracking technology. High availability and low cost, coupled with its convenience and cleanliness, have made natural gas a very attractive fuel for space heating and decorative fireplaces.

Unless environmental concerns such as contamination of groundwater or the instigation of earthquakes slows fracking’s use, future availability of low-cost natural gas seems nearly assured. However, future foreign exports, typically controlled by complex political and business considerations, may reduce the availability of low-cost domestic supplies.

Propane perhaps best can be described as natural gas’s “weak sister.” It is most often used in areas that the natural gas distribution system has not reached, such as many rural areas. About seven times fewer homes use propane than natural gas. Most heating appliances or fireplaces can be made in both a natural gas version and a propane version with only modest changes.

Propane is nearly as convenient and nearly as clean as natural gas. But it’s not as cheap as natural gas. Typically it is more than two times as expensive as natural gas for the same unit of heat output. For this reason when natural gas becomes available in a region, propane’s use for heating or in fireplaces diminishes.

Propane is derived from both natural gas and crude oil resources therefore, like natural gas, it has become more available and generally less expensive due to fracking. However, because it’s not supplied continuously its production can not respond rapidly to changing demands such as those caused by heating loads due to severe weather which can reduce stocks and cause a concomitant spike in cost.

Percent of U.S. Space Heating Energy
Proportioned between Urban and Rural Settings
New Families and New Housing Units

The slow but steady urbanization of America will in the future tend to favor the use of natural gas but not propane and wood. In 1940 only 56.5% of all Americans lived in urban areas. In 2010 more than four-fifths did. The historical trend is slow but steady and it seems reasonable to project that it will continue.

Urban areas are defined as densely developed residential, commercial and other nonresidential areas. Although the rural population – the population in any areas outside of those classified as “urban” – grows, it continues to decline as a percentage of the national population.

U.S. City Average of Consumer Price Index
Utility (Piped) Gas (Dollars/Therm)
U.S. City Average of Consumer Price Index Utility Piped Gas in Dollars/Therm

U.S. City Average of Consumer Price Index for Utility (Piped) Gas (Dollars/Therm). The Producer Price Index for natural gas, measured on an annual average basis, fell 56.8% between 2007 and 2012, in response to strong growth in domestic energy production, which is tracked by the consumer price index.

The application of horizontal hydraulic fracturing (fracking) to shale rock formations contributed significantly to this increase in supply, as the technique boosted natural gas production yield by more than 25% over this period. With some limited volatility, low-cost abundant natural gas has remained present, making gas home heating and gas fireplaces attractive to the consumer.

U.S. Natural Gas Production by Source, 1990-2040, Trillion cu. ft.
U.S. Natural Gas Production by Source, 1990-2040, Trillion cubic feet

Natural gas production from shale gas and tight oil plays facilitated by fracking now makes up about half of the U.S. total dry natural gas production. Production from shale gas and tight oil plays is projected to grow from about 14 trillion cu. ft. (Tcf) in 2015 to 29 Tcf in 2040, making up 69% of the 2040 total dry natural gas production.

Also, like natural gas, future foreign exports could reduce domestic stocks and increase consumer costs; it should be noted that there has been a recent rapid growth in U.S. propane exports. Propane exports increased from 562,000 barrels per day in the first half of 2015 to 793,000 barrels per day in the first half of 2016.

There is no question that gas as a space heating fuel and as a fuel for decorative fireplaces has become more and more popular, replacing other fuels in the process. Since the middle of the last century, the use of solid fuels – coal and coke – as main heating fuels has declined dramatically, and the use of natural gas (and electricity) has largely replaced them. Similarly, fuel oil furnaces, very common in homes in the Northeast, are now very uncommon in newly constructed homes there, and in contrast 87% of newly-constructed Northeastern homes now have natural gas as their main heating fuel.

While central gas furnaces are not the typical mainstay of hearth industry manufacturers, a home with a hookup for a natural gas furnace already in place is much more likely to have a gas fireplace, a gas log set, or a gas insert added to a cordwood fireplace. Fireplace manufacturers’ shipment records show gas fireplaces shipped now substantially exceed the shipment of cordwood fireplaces, and even when the large number of existing, older cordwood fireplaces already in homes is taken into account, surveys also show that now about half of fireplaces used for secondary heat are gas fueled. There are no reasons to believe that these trends in main heating or fireplace fuels will change in the near future.

In addition to the increase in natural gas used as a main heating fuel and the increase in gas fireplaces directly sold, about 25% of gas fireplaces in homes were originally cordwood and converted to gas by the addition of a gas log set. There is still a very large reservoir of cordwood fireplaces that have not been converted to gas and are a potential future market for gas log sets.

The convenience and cleanliness of gas have been significant motivators for the conversion from cordwood to gas. In 2013 there were 43,636,000 total housing units in the U.S. with a useable fireplace. Due to multiple ownership there is, on average, 1.2 fireplaces per household. Fifty percent of fireplaces are wood fueled. Approximately eight percent already have a fireplace insert installed. (43,636,000 households with fireplaces) X (1.2 fireplaces per household) X (0.50 wood-fueled) X (0.92 that are wood-fueled and do not already have a wood-fuel insert) = 24,087,072 wood-fueled fireplaces available for future gas log set or gas-fueled insert installation.

Fuel Oil

Out of the 6.9 million housing units in the U.S. with fuel oil as their main heating fuel, 5.7 million or 83% are located in the Northeast Census Region with 27% of the housing units there using fuel oil. While most of these units have central warm air furnaces or steam/hot water systems that are not directly of interest to most hearth product manufacturers, low oil prices as we are now seeing primarily from the abundance produced by fracking, would tend to dampen a consumer’s interest in turning to secondary heat sources such as wood stoves or gas fireplaces for economy.

Shale gas extraction by hydraulic fracking

Shale gas extraction by hydraulic fracking.

U.S. Natural Gas Production, Consumption, and Trade (1990-2040), Trillion cu. ft.
U.S. Natural Gas Production, Consumption,
				and Trade (1990-2040), Trillion cubic feet

Even though production is projected to substantially exceed consumption, future supply and demand price benefits may be reduced by exports.

Sources of 2012 Propane Supply
Sources of 2012 Propane Supply

Recently about three quarters of the total U.S. supply of propane has come from U.S. and Canadian natural gas liquids. About one quarter of total U.S. propane supply has been produced by U.S. crude oil refineries. While other factors such as export levels and the severity of weather-related residential demand can affect propane availability, the availability of propane tends to follow that of natural gas and heating oil.

Percent of U.S. Housing Units Using Utility
Gas, Wood, or Coal as Primary Heating Fuel
Percent of U.S. Housing Units Using Utility Gas, Wood, or Coal as Primary Heating Fuel

Coal and wood have declined as main sources of U.S. household heat since the middle of the 20th century, being supplanted largely by gas. The convenience and cleanliness of natural gas as compared to solid fuel, as well as the increased availability of natural gas with the expansion of its transmission infrastructure, are responsible.


Pelletizing wood for commercial heating and power generation in the U.S. began in the 1930s, but its modern surge came into being in response to the 1973 oil crisis. Residential pellet stoves and furnaces entered the market in the mid-1980s. Between 1999 and 2014 manufacturers’ records reveal 857,254 pellet stoves and 187,415 pellet fireplace inserts were shipped to retailers. A lesser number of pellet-fueled, warm air furnaces and boilers also have been installed in residences.

The historic trend in year-to-year pellet heater sales in the U.S. since 1999 when reliable data started to be collected is a roller coaster. The volatility is a reflection of the several factors that affect a pellet heater’s desirability. The availability (both real and perceived) and associated cost of fossil fuels, namely natural gas and heating oil, have had a strong influence on consumer purchase decisions.

The availability and cost of pellet fuel itself has also historically played a role, with a shortage in 2008 ostensibly affecting the next year’s sales. The severity of weather also plays a significant role, particularly in the purchase of a system principally for auxiliary heating such as is typical for the use of pellet stoves and inserts. Finally, as with all hearth products, the economy, housing starts, and level of remodeling activity play a role.

Clearly, the current trend of high availability and low cost of fossil fuels is a detriment to pellet heater sales. Less clear is the long-term impact of climate change. While climate change theory suggests on average warmer winters, it also suggests weather instability with extreme storm events and low temperature episodes when a secondary heat source is desirable. Also less clear is future pellet fuel availability.

At first glance adequate future availability of pellets seems assured. As of May 16, 2016 there were 184 pellet plants (operating, planned or proposed) in the U.S. with a total projected capacity of 18.6 million short tons. For Canada the analogous figures were 56 plants with a total projected capacity of 6.1 million tons. But there is a rub. To a large extent, these pellets will end up as fuel for massive municipal boilers in Europe, where wood is increasingly replacing coal as a means of producing heat and electricity.

The main driver for growing wood pellet consumption in Europe is the European Commission’s 2020 climate and energy plan, which aims to reduce greenhouse gas emissions and increase the contribution of renewables to total energy consumption in the European Union. Individual member states are assigned national renewable energy targets.

Wood pellets are used in co-fired or dedicated biomass power plants as part of compliance plans. Co-firing is the simultaneous combustion of pellets and coal, while dedicated biomass plants run completely on biomass.

Growth of U.S. wood pellet exports has been concentrated in southeastern states, which have advantages in terms of abundant material supply and relatively low shipping costs to Europe. There are currently 46 pellet plants planned, under construction, or in operation in the Southeastern United States. Transportation cost is a large part of the total cost of wood pellets. The proximity of the Southeastern U.S. to Europe compared to wood pellet manufacturers in western Canada provides a pricing advantage for U.S. wood pellet exporters. (Most of the pellets manufactured in western Canada are shipped from Vancouver, British Columbia.)

Over 80% of U.S. pellets in 2008 were used domestically; in contrast, by the end of 2016 it is estimated that the U.S. will ship 7.3 million tons of pellets to Europe as compared to a domestic consumption of only three million to four million tons. In addition, historically, most of Canada’s pellet production has been shipped to Europe. Remarkably, the USDA has projected that Europe’s demand for pellets by 2020 will be 80 million tons. The future availability and costs of pellets for domestic residential use in North America is unclear.

Ratio of Gas Fireplaces to Cordwood Fireplaces Shipped in the U.S.
Ratio of Gas Fireplaces to Cordwood Fireplaces Shipped in the U.S.

Gas-fueled fireplaces have become more popular among consumers as compared to cordwood-fueled fireplaces. The ratio of gas-fueled units compared to cordwood-fueled units shipped by manufacturers in 1993 was close to one-to-one, whereas in 2014 it was more than three-to-one.

Percent of All Fireplaces that Are Used
for Secondary Heat that Are Gas Fueled
Percent of All Fireplaces that Are Used for Secondary Heat that Are Gas Fueled

The use of gas-fueled fireplaces for secondary heat, in lieu of cordwood-fueled fireplaces, has unmistakably become more prevalent in the U.S. This, in part, may be due to the continued improvement in quality and user-friendliness of heater-rated gas fireplaces and, of course, the increase in household gas hookups.

gas log set

In addition to decorative and heater-rated gas fireplaces directly installed, a survey of gas fireplace owners in 2012 revealed that 24% of their gas fireplaces were originally wood-fired and later converted to burn gas primarily by the installation of gas log sets. While the sale of gas log sets has been in decline in recent years, there were still over 200,000 units shipped in 2015.


The use of wood to heat homes and to provide the enjoyment of fire has been a long tradition in North America. For example, wood was still the dominant home heating fuel in the Pacific Northwest and South as late as 1940. An abundant low-cost fuel supply, low-density rural settings, the crackle of burning logs, the pleasant aroma, and the aesthetics of the flames have combined to make wood stoves and wood fireplaces as American as apple pie.

However, wood that was used nationally as a major heating fuel in 1940 (23%), virtually disappeared by 1970 (only 1.3 percent). Since that time, it has shown a modest comeback, and by 2009 there were 2.1 percent of households using wood as their major heating fuel plus an additional 6.6 percent of households using it as a secondary fuel.

Wood fireplaces have remained popular although used to a lesser extent than they once were with 16% of households reporting having a cordwood fireplace in 2013; many are used for aesthetics rather than serious heating, and consistent with this aesthetic use, notably, many are in homes in the suburbs where they are not used for heating purposes.

Even with this slow comeback, since 1999 when reliable manufacturers’ shipment records started being kept, annual sales of cordwood stoves have actually declined and the annual sales of cordwood-fired fireplace inserts have only increased insignificantly. In addition, the annual sales of cordwood fireplaces have declined.

The competition with other more convenient fuels, namely natural gas, has certainly been responsible for much of the stagnation of cordwood stoves and insert sales and the decline in cordwood fireplace sales. The urbanization of America is also partly to blame. Conversely, the saving in costs using cordwood versus other fuels, the independence from fossil fuels, and the sense of responsibility with using a renewable resource have influenced consumers’ purchase decisions in a positive way toward wood.

Regrettably, environmental concerns and regulations have played and continue to play a significant role in the decline of wood-burning. Residential wood combustion has been identified nationally as a major source of fine particles (a.k.a. respirable particles or PM2.5). Fine particles are health injurious, have environmental impacts, and are defined by the U.S. EPA as a criteria pollutant for which there are federal ambient air quality standards.

To comply with these federal standards, a number of state and local air quality jurisdictions have taken measures to control the future installation, as well as the use of existing cordwood heaters and fireplaces. For example, the South Coast Air Quality Management District and the Maricopa County, Arizona, Air Quality Department have banned the future installation of cordwood fireplaces into homes.

Conversely, as an outcome of efforts to achieve ambient air quality standards, there have been a number of short-term, localized “wood stove change-out” programs that subsidize or encourage the replacement of old, higher-polluting stoves with cleaner, newer units. Wood stove change-out programs can provide a short-term, localized spike in sales.

An environmental regulation with even more impact on the hearth industry has been the New Source Performance Standard (NSPS) promulgated in 1988. It requires testing of wood heaters to demonstrate that emission of particles is below a standard. As a consequence of this regulation, hundreds of wood stove manufacturers went out of business by the early ’90s. It has been stated that of the approximately 500 manufacturers prior to the U.S. EPA regulation, only about 100 remained.

On Feb. 3, 2015, the U.S. EPA promulgated a new NSPS with even stricter future phased-in emission limits. The updated regulation not only made emission standards for new wood stoves more strict, but established the first-ever federal air standards for several types of previously unregulated wood heaters, including outdoor and indoor wood-fired boilers (hydronic heaters), single-burn-rate stoves, all pellet stoves, and indoor wood-burning, forced air furnaces.

The general consensus is that many of the details of the new regulation are not well defined and will require considerable interpretation and cause unnecessary uncertainty for wood heater manufacturers. Additionally, probable litigation will further cloud compliance with the regulation and impact future wood heater sales. It is believed that there will be a shift toward catalytic technology for wood heaters to be able to achieve the new lower emissions standards.

One positive outcome is that, prior to the new NSPS there was no mechanism for hydronic heaters, single-burn-rate stoves, some pellet stoves, and some wood furnaces to become certified for low emissions, yet certain local air quality jurisdictions have, or may in the future only allow certified wood heaters to be installed. As a result, a modest new market will likely be available for the units that could not heretofore be certified.

With new federal, state, and local environmental regulations, with the continued urbanization of America, and with a future of abundant and inexpensive fossil fuel probable, it is unlikely that a marked increase in annual wood heater sales will be seen even with the expected measured recovery of the housing market. However, based on history, a solid, continued market could be reasonably anticipated.

U.S. City Average of Consumer Price Index
#2 Fuel Oil (Dollars/Gallon)
U.S. City Average of Consumer Price Index number two Fuel Oil in Dollars/Gallon

U.S. City Average of Consumer Price Index for #2 Fuel Oil (Dollars/Gallon). Consumers have seen a significant reduction in fuel oil prices due primarily to fracking. The severity (or mildness) of winter weather and its attendant impact on supply/demand has also played a role in its cost fluctuations.

Comparison of Gas and Oil as the Main Heating Fuel in New
Single-Family Housing Units Completed in the Northeast Census Region
Comparison of Gas and Oil as the Main Heating Fuel in New Single-Family Housing Units Completed in the Northeast Census Region

Even with the historical use of oil as a heating fuel in the Northeast, and its current abundance and lower cost, heating systems in new housing units are predominately fueled by gas.

Annual U.S. Shipments of Pellet Stoves and Inserts
Annual U.S. Shipments of Pellet Stoves and Inserts

U.S. manufacturers’ shipments of pellet stoves have responded to a number of factors, notably the housing construction downturn in 2007, the 2005/2006 and 2008 gas price increases, and a pellet fuel shortage that occurred in 2008 damping consumers’ interest in pellet stoves in subsequent years. Shipments of pellet inserts followed a similar but more attenuated trend.


Electric heat is the second most common space heating method in the U.S. after natural gas. In 2009 there were 38.1 million households that used electric heat as their main heating source. Central warm air furnaces were in 19.1 million of these households. Simply put, heating with electricity is generally an expensive option and many of those households, for economy, have auxiliary non-electric heat.

If the cost of electricity stays at about the same level or increases, the future purchase of auxiliary heating equipment – fueled by gas, pellets, or cordwood – can be expected by those households. Over the past five years, nominal residential electricity prices have increased an average of 1.9 percent annually. However, during the first six months of 2016, residential customers paid on average 12.4 cents per kilowatt hour, or 0.7 percent lower than the same period last year.

If this trend continued for the rest of 2016, annual average residential electricity prices most likely declined slightly for the first time since 2002. While 99.9% of housing units in the U.S. have electricity, it is worth noting that electric heat is most common in the South with 70.5% of homes using it.

Electric fireplaces have become popular. Unfortunately, accurate shipment numbers of electric fireplaces are not available. However, with multi-family units becoming a larger fraction of new dwellings offering an appropriate market for electric fireplaces, and with electronic technology growing rapidly, the future of electric fireplaces appears promising.

Annual U.S. Shipments of Cordwood Stoves and Inserts
Annual U.S. Shipments of Cordwood Stoves and Inserts

The change in manufacturers’ annual cordwood stove and insert shipments has not been dynamic. There were fewer cordwood stoves shipped in 2015 than in 1999, and only about 3,000 more cordwood inserts were shipped in 2015 than in 1999. The response to the decline in 2007 of housing construction, and the increase in natural gas prices in 2008, are apparent in the trend lines.

U.S. City Average of Consumer Price Index
Electricity (Dollars/Kilowatt-Hour)
U.S. City Average of Consumer Price Index for Electricity in Dollars/Kilowatt-Hour

U.S. City Average of Consumer Price Index for Electricity (Dollars/Kilowatt-Hour). Over the past five years, nominal residential prices have increased an average of 1.9 percent annually, about the same rate as overall inflation. Prices are usually highest in the summer, as can be seen in the trend line, when total demand is high and when more expensive generation is added to meet the increased demand.

The Future

Admonishments about predicting the future are not without basis. For example, not many would have predicted the housing downturn, the impact of fracking, or the huge European pellet demand. There are, however, a few things that seem predictable. The population of the U.S. will increase, and with it new homes with the need for heating in the cold and temperate climates of North America. Man’s almost primordial fascination with fire and how it has manifested in the ubiquity of fireplaces is unlikely to change.

Unless there are restrictions in fracking due to environmental concerns or dramatic increases in fuel exports, the domestic availability and low cost of natural gas seem very likely to stimulate the expansion of sales of natural gas heaters and fireplaces. Propane will also benefit, mainly in rural areas where there is no natural gas availability.

Electricity is likely to become more expensive for consumers as climate change initiatives favor more expensive power generation technologies, such as wind, solar, low-impact hydroelectric, landfill gas, wood waste, and tidal power.

While subject to influence by many factors, history and consumer preferences suggest that cordwood heaters, cordwood fireplaces, and pellet heaters will continue to have a solid but not necessarily an expanding market.

Finally, it should not be forgotten that the hearth industry is in an enviable position among businesses. There are more than 116 million occupied housing units in the U.S., and between approximately 600,000 and two million new dwellings (single- and multi-family) have been added annually over the last 10 years; that is expected to continue more or less at the same level. That is a huge marketplace for hearth products.


Data for this article are from the U.S. Census Bureau, Joint Center for Housing Studies of Harvard University, U.S. Department of Energy, Bureau of Labor Statistics, National Propane Gas Association, Hearth, Patio & Barbecue Association, Forbes magazine, and Biomass magazine.

About the Author

Dr. James E. Houck has been involved in environmental research and the hearth industry for over 30 years. He currently is an independent consultant and can be reached at:

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