Adoption Of Wood Pellets In The Prince George, BC Market: Perceptions And
Opportunities

Mark Dunsford
B.Sc., University of Victoria, 1997

Project Submitted In Partial Fulfillment Of
The Requirements For The Degree Of
Master Of Business Administration

The University Of Northern British Columbia
April2006
© Mark Dunsford, 2006

UNIVERSITY of NORTHERN
BRITISH COLUMBIA
LIBRARY
Prince George, B.C.

ABSTRACT

A limited supply of non-renewable energy (e.g. oil and natural gas), coupled with
environmental, economic, social and geopolitical consequences have encouraged society
to search for new energy alternatives. The use of wood pellets as a bioenergy alternative
is one of the options available.

The first part of this paper was exploratory research on the state of the wood
pellet, its associated technology, and a review of local and international wood pellet
markets. The objective is to provide an overview and identify some of the key factors
influencing wood pellet markets. It was found that the consumer market in Canada is
primarily residential, market penetration is low, and the key drivers of the market are the
supply side players. Canada was found to be a net exporter of wood pellets the majority
being shipped to markets in the US and Europe.

The second part of this study examined residential wood pellet systems within an
adoption and diffusion of innovations framework. A survey of potential adopters in
Prince George, BC measures their perceptions of wood pellets and explores the factors
that influence their decision to adopt or not adopt this technology. It was found that the
local wood pellet market has a number of barriers to overcome including technological
lock-in with traditional systems and promotion and communication challenges.
Opportunities were identified including the perception that wood pellets systems are
economical and environmentally friendly.

II

TABLE OF CONTENTS
Abstract

11

Table of Contents

lll

List of Tables

IV

List of Figures

v

Acknowledgement

VI

Chapter One - Introduction
1.1 Study Objectives
1.2 Research Scope
1.3 Potential Beneficiaries
Chapter Two - Background
2.1 Bioenergy
2.2 The Wood Pellet
2.3 Combustion Technology
Chapter Three- Market Analysis
3.1 Prince George Market
3.2 North American Market
3.3 International Markets
3.4 "Thermie B" Project
Chapter Four - Adoption and Diffusion Literature
4.1 Adoption Literature Background
4.2 Epidemic Models
4.3 Rogers Epidemic Models
4.4 Other Models
Chapter Five- Wood Pellet Literature
Chapter Six - Hypotheses
Chapter Seven- Survey Methodology
7.1 Data Collection
7.2 Measures
Chapter Eight - Results and Discussion
8.1 Survey Results
8.2 Survey Discussion
8.3 Limitations and Future Research
Chapter Nine - Conclusion
Bibliography
Appendix 1
Appendix 2
Appendix 3

1
2
3
4
5
5

Ill

6

10
15
15
18
21
25
27
28
31
32
38

40
45

47
47

48
52
52
61

69

71

74
79

80
81

LIST OF TABLES
Table 3.1. Survey Results on Pricing of Wood Pellets and
Wood Stoves, in Prince George, BC

17

Table 3.2. US Hearth Appliance Shipments- 2005

19

Table 3.3. Pellet Plants and Production for Europe and
Other Pellet Production Regions

22

Table 7 .1. Original Construct and Items

49

Table 8.1. Demographic Characteristics of Respondents

61

Table 8.2. Barriers and Opportunities for Wood Pellet Market in Prince George

64

IV

LIST OF FIGURES
Figure 2.1. Portrait of Wood Pellet

6

Figure 3.1. US Hearth Appliance Shipments Percentages (2005)

19

Figure 3.2. Canada vs. US Pellet Production (2001-2005)

20

Figure 4.1. S-Shaped Diffusion Curve

31

Figure 4.2. Rogers (2003) Five Adopter Categories

34

Figure 6.1. Perceived Attribute Characteristics

46

Figure 8.1. Residential Situation of Respondents

53

Figure 8.2. Evaluation of Wood Pellet Appliance Features by Respondents

54

Figure 8.3. Evaluation of Respondents Reasons for Not Purchasing a Wood
Pellet Appliance

55

Figure 8.4. Evaluation of Respondents Reasons for Purchasing a Wood
Pellet Appliance

56

Figure 8.5. Evaluation of Perceived Attributes Questions by Respondents

57

Figure 8.6. Evaluation of Important Features

58

Figure 8.7. Perspective on Reducing Consumption of Energy

59

Figure 8.8. Perspective on Paying more for Renewable Energy

59

Figure 8.9. Product Types of Interest

60

Figure 8.10. S-shaped Diffusion Curve and Adopter Categories Prince George Pellet Market

62

Figure 8.11. Evaluation Perceived Attributes

65

v

ACKNOWLEDGMENT
There are many individuals who have provided me with help and guidance during
the conduct of this MBA project. First and foremost, I would like to acknowledge and
give thanks for the efforts of my Supervisor, Dr. Ian Hartley, who despite his busy
schedule gave freely of his time and experience. I would also like to acknowledge the
chair of the MBA program, Charles Schell, for all his hard work and dedication to the
MBA program at the University of Northern British Columbia. A special thank you must
be given to my Committee members, Botai Wang, Elizabeth Croft and Charles Schell for
their help and suggestions.

I would also like to acknowledge my employer, Canadian Forest Products Ltd.,
for supporting me while I attended classes and conducting research for this MBA project.

Last but not least, I would like to dedicate this project and this Masters degree to
my wife, Kirsten, for all her encouragement and help during the past two years. Special
thanks for all the extra effort in taking care of our two children Olivia and Charlie while I
was away studying. I really could not have done it without you.

VI

Chapter One - Introduction
A limited supply of non-renewable energy (e.g. oil and natural gas) coupled with
environmental, economic, social and geopolitical consequences has encouraged society to
search for new energy alternatives. The use of wood pellets as a bioenergy alternative is
one of the options available. In Canada, the use of wood pellets has primarily been in the
residential home heating market in the form of wood pellet stoves/fireplaces. Minimal
research has been completed to date on wood pellet markets in Canada.

The first part of this paper is exploratory research on the state of the wood pellet,
its associated technology, and a review of local and international wood pellet markets.
The objective is to provide an overview and identify some of the key factors influencing
wood pellet markets.

The second focus of this paper is to develop a better understanding of the
perceptions of wood pellets and to explore factors that influence a consumers decision to
adopt or not adopt this technology. A literature review on adoption and diffusion theories
was conducted and was used to develop an appropriate survey that could measure
consumers' perceptions of wood pellets. The survey was conducted on residents living
within the city of Prince George, BC. This city was selected due to its unique proximity
to a large number of existing and planned wood pellet manufacturing plants.
Furthermore, the market penetration of wood pellets in the Prince George market has
been relatively low. The majority of the wood pellets produced in this area are not used
locally but rather are exported to the US or other international markets.

1.1 Study Objectives
Very little is known about consumers' perceptions of wood pellet systems and
about why some people adopt the technology and others do not. This could be valuable
information for the future growth of this industry in Canada. The overall objective of this
study is to complete exploratory research on the state of the wood pellet industry, to
develop a better understanding of the perceptions of wood pellets, and to explore factors
that influence consumers' decision to either adopt or not adopt this technology. The
following research questions were established early on in the development of this project
and will be answered in this study:

1) What is the current state of wood pellet technology in Canada?
2) What is the current state of the local, North American and International wood
pellet markets?
3) What is the local (Prince George) perception of wood pellets?
4) Are there any theories available to help explain the factors and characteristics that
influence a consumers decision to adopt or not adopt wood pellets?
5) What are the barriers and opportunities for the local wood pellet market?
6) What possible strategies can be used to overcome these barriers and/or take
advantages of opportunities in the local wood pellet market?

2

1.2 Research Scope
The wood pellet industry consists of sourcing of wood fibre (supply), processing
(manufacturing), and consumption (marketing and end use). This study will be primarily
interested in understanding consumers and the consumption process; i.e. the consumer
end of the value chain.

It is beyond the scope of this project to evaluate all of the scientific and economic

literature that supports or refutes all of the intricate scientific, environmental, and
economic factors (e.g. cost/benefit analysis or C0 2 emission studies) for either the wood
pellet itself or in comparison to other more traditional heating systems (e.g. natural gas,
electricity, oil). It is noted in the literature that this type of research is significant, as it can
provide benefits to producers, policy makers, and consumers. However, it poses a number
of challenges, including the fact that wood pellet use is relatively new and there is limited
data and knowledge in the marketplace (Gustavsson et al. 2005).

In the survey section of this study the geographic scope is the city of Prince

George, BC. One of the reasons this city was chosen is its close proximity to a large
number of existing and planned wood pellet manufacturing plants. The second reason is
that the areas forests are currently under attack by the Mountain Pine Beetle. The current
forecasts by the BC Forest Service predict that the Mountain Pine Beetle infestation will
kill not less than 80% of the volume of pine forest across British Columbia (Eng 2005).
This outbreak has led to a significant increase in the amount of timber being harvested in
the area. The BC Provincial Government has made it a priority to obtain some value from

3

this timber before it becomes un-merchantable. The result is local wood pellet
manufacturing plants are expanding their production capacity and new wood pellet plants
are being planned for the area. There are other important factors that make the wood
pellet industry a "hot topic" for this area including; volatile North American energy
markets, energy security issues, international energy agreements (Kyoto), and climatic
conditions. The use of bioenergy fuels (e.g. wood pellets) as an alternative to fossil fuels
is gaining momentum, and worldwide use has increased substantially in the last decade
(Gustavsson et al. 2005).

1.3 Potential Beneficiaries
The target beneficiaries of this study include wood pellet manufacturers, wood
pellet retailers, wood pellet appliance manufacturers, wood pellet appliance retailers,
wood pellet marketing associations, forest industry companies, and government. It is also
the intention of this study to provide some useful information to the general public and to
those who may be interested in learning more about wood pellets. The information
contained within this report should also benefit other researchers in developing a better
understanding of wood pellet markets.

4

Chapter Two - Background

2.1 Bioenergy
Rapid socio-technological innovations during the last century have given rise to
abundant and reasonably low cost fossil fuel energy sources. Canada has an abundant
variety of natural fossil fuels, including oil, natural gas, and coal. Unfortunately, the use
of fossil fuels is causing serious environmental problems such as global warming, ozone
layer depletion, air and water pollution, and hazardous waste deposition. The cost to
purchase fossil fuels on the world market has increased significantly in the last five years
(Statistics Canada 2005). A Statistics Canada report (2005) reported that "Canadian use
of fossil fuels for energy production increased for the third year in a row in
2004 ... Canada consumed 7,690 1012 (petajoules) of energy ... BC is the fastest growing
province in energy consumption" (Statistics Canada 2005, 1).

There is also increasing concern that worldwide fossil fuel use will not be
sustainable and there has been increasing pressure to find new sources of energy. Many
options have been explored, and some have been successful including: wind energy,
hydropower, solar energy, geothermal energy, nuclear energy, and bioenergy.

One of the renewable options is the use of biomass. Biomass is all of the plant and
animal matter that is on the Earth's surface. The harvesting of biomass such as crops,
trees or dung and using it to create energy such as heat or electricity is called bioenergy.
Bioenergy could be used to directly replace fossil fuels. There has been a considerable

5

amount of research into the options available for the direct substitution of wood for fossil
fuel and into the use of wood as a sustainable "carbon neutral" alternative. Advanced
technologies now allow for wood and wood waste to be used to produce heat and energy
economically.

2.2 The Wood Pellet
Wood pellets (or sometimes referred to as pellet fuel) are a densified form of
dried compressed wood residue, primarily made from sawdust, shavings and fines that
are a by-product of the wood processing industry (fig. 2.1 ).

Figure 2. I. Portrait of Wood Pellets. Source: Bruton,
released into the public domain.

Wood pellets are uniform in size and content and, as a result, offer substantial
advantages over cordwood burning or hog-fuel burning (bark, saw-dust, and/or shavings).

6

In addition, the particulate and gaseous emissions from wood pellet appliances are
extremely low and their burning efficiency is very high (Pellet Fuels Institute 2006). The
literature suggests a number of environmental advantages to the use of wood pellets,
which include:

1) Renewable- wood can be continuously replenished, and is therefore sustainable
2) Low carbon emissions- there is only minimal amount of net carbon (C0 2 )
production (-5 %), the major greenhouse gas, from wood combustion, since the
C0 2 generated during combustion is equal to that consumed during the life-cycle

of the tree
3) Minimal metals and sulfur- wood fuel has a minimal amount of heavy metals and
sulfur, and therefore does not lead to acid rain
4) Minimal ash - the particulate emissions from wood fuel can be controllable by
emission control devices

Other advantages of wood pellet heating systems include that they have: been
subjected to lower price fluctuations than fossil fuels , are easy to transport and store
(more convenient than logs), are becoming increasingly standardized and treated more
like a commodity, have improved in automation, and now have higher combustion
efficiencies (Gustavsson et al. 2005). In comparison to other wood biofuels such as
firewood, wood chips and wood waste material, wood pellets have an increased weight to
volume ratio versus chips (3: 1) and sawdust waste (5: 1), which provides a significant cost
savings in shipping costs and storage (Ince et al. 1984; Aruna et al. 1997).

7

Wood pellets are produced at a pellet mill where the raw material is dried,
compressed and formed into small eraser sized bits. The production of wood pellets
typically involves 6 stages:

1) Hogging and grinding- raw material is "hogged" into a small and uniform size
2) Drying - the wood dust is dried to a specific moisture level using wood or natural
gas in a rotary drum dryer
3) Pellet Formation- wood dust is converted into pellets using a pellet mill. Usually
no additives are added, as the lignin in the wood acts as the binding agent
4) Cooling - pellets are cooled to allow the lignin to set
5) Fines separation - residual fines are· separated and returned to the process
6) Bagging- pellets are bagged immediately or stored in a silo to reduce the chance
of exposure to moisture

In the North American market there are two grades of pellet fuel available:
standard and premium grades. The primary difference between these two grades is that a
standard grade contains a higher level of inorganic ash than the premium grade. A
standard grade pellet has up to a 3% ash content, whereas a premium grade would have
less than 1%. A typical premium grade wood pellet has the characteristics outlined in
Appendix 1. These sorts of wood pellets make up about 95% of the pellet production in
North America (Pellet Fuels Institute 2006). The heat value of wood pellets range from
8,500- 8,900 BTU (5.5 - 5.6 MWhlmetric ton). Pellet manufacturers are encouraged to
label their product, and quality test regularly to ensure the protection of consumers. The

8

North American industry has developed standards, through the Pellet Fuels Institute, to
create a product that is consistent in content, density, size, and quality. The standards
place the responsibility for testing on the pellet mills, and the Pellet Fuels Institute
recommends that manufacturers conduct both internal and independent laboratory testing
of their product on a regular basis. The required standards for wood pellets are the
following: (Pellet Fuels Institute 2006)

1) Density- product must have consistent hardness and energy content (minimum of
639 kg/m 3)
2) Dimensions - length must be 1 W' maximum and diameter of W' x 5 t/16" to
ensure predictable fuel amounts as well as to prevent jamming
3) Fines - there must be a limited amount of sawdust from pellet breakdown, to
avoid dust while loading and to reduce problems with pellet flow (should be
below 0.50%)
4) Chlorides- pellets must have a limited salt content (no more than 300 parts per
million to avoid stove and vent rusting
5) Ash content- this is an important factor in maintenance frequency, should be
minimized (should not exceed 0.30%)

European standards vary between countries and are not consistent with North
American standards. The quality of wood pellets in Europe has been improving in recent
years as part of an effort to improve their image, market competitiveness, and durability
in handing as well for reliability and convenience (Gustavsson et al. 2005). In Sweden,

9

for example, the ash content of wood pellets has been reduced from 10% in the 1980's to
about 0.5% in 2002 (Dahlstrom 2002). Examples of countries with known standards
include Austria, Germany, Sweden, and Finland (Gustavsson et al. 2005).

2.3 Combustion Technology
Wood pellets are typically used in a number of different residential type
appliances such as wood pellet stoves, furnaces, etc., to produce heat or they can be used
in larger sized cogeneration or boiler systems to produce both heat, and/or electricity. The
users of wood pellets can be categorized into three areas based on the requirements of the
consumer targeted (each will be described below). These three categories are:

1) Residential wood pellet appliances (e.g. stove, furnaces, boilers, and BBQ's)

2) District heating systems
3) Industrial cogeneration and boiler systems

Residential Wood Pellet Appliances
The most common residential wood pellet appliance in Canada is a pellet
stove/fireplace. This product is an automatic combustor that uses both wood pellets and
electricity for operating and a flue for leading flue gasses out. An informal internet
survey of wood pellet stove manufacturing companies indicates that a number of different
models are available. These include freestanding stoves and models that can be inserted
into an existing open fireplace. Typically a wood pellet stove is light and does not require
a massive base. An advantage of pellet stoves is their easiness of use, small amount of

10

ash production, adjustability of output, and ability to rapidly heat the space required
(Alakangas and Paju 2002). Residential wood pellet furnaces and boilers (for heating and
hot water heating, respectively) are also available on the market. However, both of these
systems are not very popular in Canada. A wood pellet appliance is capable of
generating between 10,000 and 500,000 BTU of heat and can heat an entire house if
properly installed (BC Pellet Fuel Manufacturers Association 2006). The most recent
introduction to the market is the wood pellet barbeque.

District Heating Systems
District heating systems provide heat energy to multiple consumers from a single
heat source. These systems can also be coupled with the cogeneration of electricity. A
wood fuelled heating plants size is measured by its heat output, typically measured in
megawatts (MW). A small district heating system (0.025 MW to 0.150 MW) would be
suitable for a single building, garage, barn, or small greenhouse. A medium sized heating
plant would have a heat output of approximately 1 to 4 MW, and would typically be used
in a school, or a larger complex such as a university, a factory or in a small town system.
Larger systems would fall into the large-scale district heating (or cogeneration) category,
which will be discussed in the next section. A typical district heating plant produces
thermal energy which is transferred as hot water or steam through an insulated steel or
plastic pipe (National Research Council 1985). The thermal energy is distributed to the
end user where the heat is extracted and circulated into a buildings interior environment.
After the heat has been extracted the water is then returned to the production plant for
reheating. This type of system will often supply domestic hot water, thus eliminating the

II

need for a hot water tank. Fossil fuels have traditionally been the source of energy for
district heating systems (Mackenzie-Kennedy 1979). The majority of district heating
systems rely on multiple fuel sources to be more viable. Fuel sources could include:
municipal solid waste, waste heat from electrical or industrial processes, and other
renewable sources such as geothermal, straw, and wood biomass. In 1997, it was
estimated there were over 6,000 district heating systems in North America (Schweig
1997). These systems are commonly found in building complexes such as universities,
schools, hospitals, jails, and government buildings, etc. (Metro Toronto Opportunities
Investigation Group 1995). Market penetration of these systems in Canada is low, with
approximately 50 cities using them, most notably: Charlottetown, PEl; Toronto, ON;
Ouje-Bougoumou, PQ; and Grassy Narrows, ON (Schweig 1997). There was no literature
available to confirm whether any of these operations were using wood pellets.

Industrial Cogeneration and Boiler Systems
Cogeneration describes the process whereby simultaneous production of
power/electricity, hot water, and/or steam occurs from one fuel. In the 1980's the
relatively low natural gas prices made the development of cogeneration plants attractive.
In fact, gas-fired cogeneration was the main reason for the decline in conventional power
plant construction that occurred in North America during the 1980's. Cogeneration is
considered to be an environmentally friendly method of producing electricity (power)
steam and/or hot water at the same time, in one process, with one fuel. Cogeneration
plants can often reach energy efficiencies of up to 90%, and depending on the technology
used and the system it is replacing, there can be fuel savings in the range of 10-40%

12

(Madlener and Wickart 2004). The typical fuels used in cogeneration systems are natural
gas, fuel oil, propane, and renewable energy such as bio-waste and wood or wood waste.
It is common for forest product manufacturing facilities to install cogeneration plants as

an efficient way to provide power and thermal energy to meet on-site requirements and as
a way to use their wood waste.

An industrial boiler is a large closed vessel in which water or another type of fluid
is heated under pressure. This hot fluid is then circulated for use in other processes.
Boilers can utilize combustible industrial by-products, gases, liquids or solids. These
large industrial boilers can also use heat energy from some other separate combustion
process, such as heat recovery boilers from different processes. A boiler plant most often
forms just a small part of a larger process. A hot water boiler plant could produce heat for
use in a district heating system. Alternatively, a steam boiler would produce steam for
some industrial process or for power production.

Usually cogeneration systems and industrial boilers are large ranging in size from
a few megawatts to as high as 300 MW plus (based on electrical output). These larger
systems would most often be found in prisons, hospitals, large factories, or in a more
extensive city system. For example, in Stockholm, Sweden more than 60% of the city's
heat demand is met by an expansive district heating system and in some central areas of
the city the share increases to nearly 90%. This system is run by a number of different
cogeneration systems and boiler plants. One of these plants has three 100 MW boilers,
one of which, operates almost exclusively on wood pellets and was the first biomass-

13

fired, cogeneration power plant in the Stockholm area. In 1999 there were about 6,310
wood power plants in the US that were capable of exceeding 15MW (Bergmann and
Zerbe 2004). However, it appears that none of these use wood pellets as a source of fuel.

14

Chapter Three- Market Analysis
3.1 Prince George Market
In 2005 there were five wood pellet manufacturing facilities located in British

Columbia (BC Pellet Fuel Manufacturers Association 2006). Three of these five
operations were located in and around the Prince George area. These include a mill
within the city of Prince George (Pacific Bioenergy), one in Quesnel (Pinnacle Pellet),
and one in Vanderhoof (Premium Pellet), with a combined annual capacity of
approximately 550,000 tons of wood pellets. These mills do supply local retailers and
"walk-up" customers as part of their business. However, their production capacities far
exceed the requirements of the local market and therefore they are involved in exporting
wood pellets to the larger US and international market place.

The development of new wood pellet manufacturing facilities is occurring in the
Prince George area. In July 2005, CH. Anderson and Associates of Vancouver, BC and
TallOil of Stockholm, Sweden announced a proposed $100 million project to build four
new pellet fuel plants in the BC interior (Harris 2005). The goal of this project was to
build pellet plants to meet the needs of European demand for renewable energy and was
developed based on the pine beetle damaged forests and abundantly available low cost
fibre source. The CEO of Tall Oil, Henrik Lundberg, is quoted as saying "increased
demand for renewable energy is being driven in Europe by green incentives and national
energy policy is supporting the business case for manufacturing wood pellets in BC"
(Harris 2005, 1). The first two pellet plants are planned for Quesnel and Vanderhoof and
the locations for the remaining two plants have not yet been determined.

15

In February 2006, Canadian Forest Products Ltd. announced its intention to build
a wood pellet mill in Houston, BC (Appendix 2). This pellet plant would be a joint
venture between Canadian Forest Products Ltd., Pinnacle Pellet, and the Moricetown
Band. Pellet production is expected to begin in the fall of 2006. The press release notes
that "wood pellets produced at this facility will be suitable for both industrial and home
heating consumption and will be sold into a combination of the North American, Asian,
and European markets" (Canfor News Release 2006, 1). All of this production capacity
will create an oversupply of wood pellets in the Canadian market and therefore wood
pellet manufacturers will increasingly look to the export markets to meet their sales
requirements.

In preliminary discussions with local wood pellet manufacturers, it was noted that
it was not in their company's best interest to ship wood pellets to US or offshore markets
as it requires a stronger sales effort, an efficient supply chain, currency exchange issues,
and other associated risks. It appears that they would like to see growth in the local wood
pellet market.

As is the case with the entire North American market, the primary use of wood
pellets in Prince George is for residential use in the form of wood pellet stoves/fireplaces.
The local wood pellet market competes primarily with natural gas and electricity heating
systems. A site visit to a total of 19 potential wood pellet and appliance retailers was
conducted in March of 2006. A total of 9 retailers were identified that sold either wood
pellets or wood stoves or both. The data collected was only on the retail price being

16

offered for the wood pellets and wood stoves. This information was used to produce a
price comparison for these products (table 3.1)

Table 3.1. Survey Results on Pricing of Wood Pellets and Wood Stoves, in
Prince George, BC (2006 data)
Wood Pellets
40 lb bag
Bulk (per ton)

Low

High

n

Mean

$2.99
$136

$4.79
$175

6
5

$3.79
$149

Wood Stoves/Fireplaces

$1 ,799

$4,500+

6

It was found that wood pellets were sold in either a 40 lb. bag or in bulk. A bulk

purchase involved buying a skid of wood pellets weighing approximately one metric ton.
A total of 6 wood pellet appliance retailers were identified in Prince George. The wood
pellet appliance retailers all reported strong sales of the wood pellet stoves/fireplaces.
Only one company was identified as having a wood pellet furnace in stock and could
order a wood pellet hot water heater if a buyer was interested. It is important to note that
other wood pellet or wood appliance retailers could have been missed in this short
survey.

In Prince George, there were no district heating or industrial cogeneration

operations using wood pellets. In October 2005 the City of Prince George passed a bylaw to allow the city to develop a $9.3 million biomass district heating system (Nielsen
2005). The project would involve connecting 18 downtown core buildings. It is not clear
as to whether wood pellets have been considered as a fuel source for this project.
17

3.2 North American Market
In 2005 there were over 60 wood pellet mills in North America, 20 located in
Canada and 40 in the US (Pellet Fuel Institute 2006). The largest pellet producing
regions in North America are located on either coast, with very little production
elsewhere. In North America the majority of wood pellet manufacturing companies have
been established specifically for the purpose of pellet production. Wood pellet producing
plants range in production rates of 0.75 to 15 ton per hour. The research indicates that
these variations are based primarily on the size of the operation but also depends on the
species of wood used. The plants using softwoods generally have a higher production rate
than those using hardwoods. Industry experts believe that between 1990-1992 hardwood
productivity was 50% less than softwood (UMBERA 2000). However, significant gains
were made by 1994 when it was estimated that the hardwood output was reduced to about
25% less than softwood (UMBERA 2000).

Wood pellet use in North America is almost exclusively consumed as a residential
heating supplement, the majority (95%) being used in pellet stoves/fireplaces (Pellet
Fuels Institute 2006). There are very few homeowners using furnaces or boilers for wood
pellets. In North America the sales of wood pellet fuel directly follows the demand curve
produced by the number of residential wood pellet stoves sold (table 3.2 and fig. 3.1).

18

Table 3.2. US Hearth Appliance Shipments 2005. Source:
Kaiser and Johnson 2006
US Hearth Appliance Shipments 2005 (units)
561,596
2,141,165
380,000
118,490
3,201,251

Cordwood
Gas
Electric
Pellet
Total

Pellet

Electric

4%

Cordwood

Gas

66%

Figure 3.1. US Hearth Appliance Shipments Percentages (2005).
Source: Kaiser and Johnson 2006.
The sales of wood pellet stoves in North America rapidly increased in the early
1990's and leveled off in the late 1990's when the industry was under pressure from
natural gas. The market has improved steadily in recent years. It is hard to determine how
many pellet stoves/fireplaces exist in North America due to the fact that good statistics
are not available. However, it is estimated that the residential North American wood
pellet market accounts for about 956,000 tons of production and sales (Natucka 2005).
The average households yearly consumption of pellets is 2 tons, so on average there are
450,000-500,000 pellet stoves in operation in North America (Natucka 2005).

19

Wood pellet production has been increasing steadily in the last five years (fig.
3.2) with the largest increase occurring in Canada.

1,600,000
1,400,000
1,200,000
UJ

~
4)
a.

0

1,000,000

• canada
800,000

CUS

•Total

UJ

c:

.E

600,000
400,000
200,000
0
2001

2002

2003

2004

2005

Figure 3.2. Canada vs. US Pellet Production (200 1-2005). Source: Natucka 2005.

In 2005 Canada produced about 55 % or 915,000 tons of the total North American
production (Natucka 2005). The Canadian export market shows the most growth in pellet
production over the last few years and was expected to ship 582,000 tons during 2005.
Research indicates that the majority of future wood pellet production is expected to come
from Western Canada based primarily on the large availability of timber supply and
reduced fibre cost (based on the Mountain Pine Beetle epidemic) (Natucka 2005). Total
North American wood pellet production for 2006 is projected to be 1,653,500 tons
(Natucka 2005).

20

The wood pellet industry in North America competes with all other energy
options including electricity, oil, and natural gas, etc. In North America the use of wood
pellets, as an alternative heat and energy source, has been relatively slow to be adopted. It
is estimated that only 0.025 % of US residential heat uses pellet fuel (UMBERA 2000).
American wood pellet producers rely solely on the domestic market, as it is not
economically viable for them to do business in the export market based on raw material
cost and fibre availability (Natucka 2005).

3.3 International Markets
The wood pellet market in continental Europe is by the far the largest producer
and user with total production capacity of approximately 5.1 million tons annually (table
3.3).

21

Table 3.3. Pellet Plants and Production Figures for Europe and
Other Pellet Production Regions (2005-2006 data). Source:
Ljungblom 2005
Country

Annual Production (mt.)

No. Pellet Plants

Europe

15
2

Austria
Belarus

2
1
2
8

Belgium
Bulgaria
Czech Republic
Denmark

Germany

5
18
11
20

Hungary

I

Italy
Lithuania

36
8
7

Netherlands

I

Norway

9
19
7
3
3
32
4

Estonia
Finland
France

Latvia

Poland
Slovakia
Slovenia
Spain
Sweden
Switzerland
United Kingdom
Russia
Total

509,000
not available
36,000
not available
I I ,000
550,000

345,000
446,000
202,000
398,000
not available
720,000
341,000
II 0,000
I 00,000
138,000
356,000
132,000
90,000
70,000
I ,261,000
60,000

3
25
242

II 0,000

759,000
5,104,000

20
40
13

915,000
738,000
65,000

Other
Canada
United States
Japan

The largest European user and producer of wood pellets is Sweden with an annual
production capacity of 1.26 million tons (Ljungblom 2005). There has been little

22

development of wood pellet production or consumer markets outside of North America
and Europe.
Sweden is the world leader in the production and use of pellet fuels as a bioenergy
alternative. Wood pellet production in Sweden started in the late 1970's with the
development of a production facility in Mora, Sweden. The plant began production in
November 1982. At this time there was limited knowledge on how to produce a wood
pellet production facility. In the early 1990's the Swedish government introduced a tax on
mineral fuel, which reduced the competitiveness of burning fossil fuels such as coal, oil
or gas. Therefore, the use of biomass became a positive energy alternative. This marked
the beginning of a successful wood pellet industry in Sweden. As of 2005 there were
approximately 30 wood pellet production sites for wood pellets in Sweden, with an
annual production of almost 1.2 million tons (Ljungblom 2005). In contrast to North
America the majority of wood pellet are used in district heating or large-scale district
heating (or cogeneration) plants. These large scale heating plants in Sweden are typically
ones that have been converted from coal-dust firing. At present these district heating and
large-scale systems are using approximately 1 million tons of wood pellets per year.

The Swedish residential market uses about 250,000 tons annually (2003 data) for
use in about 37,000 residences (Mahapatra et al. 2004). In order to meet the country's
demand, Sweden is a large importer of wood pellets, primarily from Canada. The future
for residential pellet stove use in Sweden appears promising (Mahapatra et al. 2004).
However, the research indicates that there are still some perception problems in the
Swedish residential market, including a lack of knowledge of the advantages of wood

23

pellet systems. Consumers in Sweden also see many technical and non-technical
problems in small heating units, such as storage, delivery to the customer and service. In
Sweden, wood pellets for the consumer market are packed in loose bulk or big bags and
purchases are usually made direct from the pellet manufacturer. However, there has been
an increase in the number of pellet dealers that now deliver pellets directly to the
consumers' door by bulk vehicles (Mahapatra et al . 2004).

In October 2005, the government of Sweden developed a new policy target: "the

creation of the conditions necessary to break Sweden's dependence on fossil fuels by
2020" (Government Offices of Sweden 2005, 1). The policy instruments include
investment grants, norms for energy use, loans with interest subsidies and information
drives. The government has identified that the promotion of district heating with wood
pellets is an important part of this policy. The government is also planning to spend
upward of $125 million per year for research into new knowledge for a renewable society
(Government Offices of Sweden 2005). District heating systems have increased rapidly in
Sweden in recent years and the Swedish government is expecting this trend to continue.

The European Union (EU) has been a proponent of the use of bioenergy
alternatives such as wood pellets. The EU's "White Paper on Renewable Energy
Sources" proposed to double the use of renewable energy from 6% in 1997 to a target of
12% by 2010 (European Commission 1997). It was anticipated that biomass, which has a
current share of about 3% of total energy consumption would make the largest
contribution (Gustavsson et al. 2005). In its "Campaign for Action" the European

24

Commission proposed setting a target of one million biomass heated homes in the EU-15
(Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland, Italy,
Luxembourg, Portugal, Spain, Sweden, the Netherlands, and UK) during the period 19992003 (Gustavsson et al. 2005). This sent a positive signal to the European bioenergy
market.

Due to this increased level of interest in Europe for bioenergy (e.g. wood pellets)
fuel alternatives there has been a great deal of research conducted in this field.

3.4 "Therrnie B" Project
In 2000 a group of European partners from Sweden, Norway, German and Austria

conducted a comprehensive study know as the Therrnie B project to study and encourage
the development of the wood pellet markets worldwide (UMBERA 2000). The study was
titled "Wood Pellets in Europe" and was financed by the European Commission, and the
Austrian and Norwegian governments. In this study the authors reached a number of
conclusions and recommendations to encourage the market penetration of wood pellets.
The following is a brief synopsis of this studies findings .

Wood pellets have great market potential as a biomass fuel even though their
current share of the heat energy market is presently small. There is great potential for this
industry worldwide due to the availability of raw material, comparatively high energy
density, the possibility of their use in automatic firing systems offering a high level of
customer convenience. Furthermore, wood pellets have been shown to be price

25

competitive (versus other fuels) in some markets. The study also identified a number of
barriers including, communication problems and competition between the various players
make coordination a problem (UMBERA 2000). This report also cites a lack of
infrastructure as a barrier to the installation of pellet fuel systems. The study noted a nonexistent supply system for pellet fuel, heating systems and services, which could act to
prevent consumers from purchasing wood pellet heating systems (UMBERA 2000). It
was identified that social or traditional pressures of customers could be further inhibiting
the growth of pellet heating systems. However, the most important factor identified was
that of economics whereby both pellet fuel and non-renewable sources are similar but
pellet fuel systems require a higher investment cost. The report suggests that the nontechnical obstacles are likely to have the most influence on market development rather
than technical barriers.

The Therrnie B report also identified a number of strategies that could lead to
further market penetration of wood pellet heating systems. These strategies include
garnering political support for the industry, for example in reaching Kyoto targets.
Another important strategy would be to develop further co-ordination, co-operation and
information. The report identified the need to better develop the technology including
heating systems, transport and storage (and the supply chain), pellet quality, and quality
assurance. Furthermore, wood pellet manufacturers need to do a better job of marketing
and advertising their product and to develop a stronger brand image among consumers
(UMBERA 2000).

26

Chapter Four - Adoption and Diffusion Literature

In the case of the launch of a new technology it is often a puzzle as to why it takes
such a long period of time to be adopted by those people who would seem most likely to
benefit from its use. In fact, the vast majority of new products and services that enter the
market every year fail at a considerable cost to companies (Cooper 1993; Mahajan et al.
2000). Therefore, it is of utmost importance for companies developing new products to
understand why some people adopt an innovation and others do not and to understand the
factors that may influence this decision. Equally important, consumer behavior
researchers are interested in better understanding rates of adoption within this process.
Research and theories on "adoption" and "diffusion" of innovations contribute to such
understanding.
In this paper the following definitions for adoption, diffusion, and innovation will

be used. Adoption refers to a decision that an individual makes to use an innovation,
whereas diffusion will refer to the accumulated level of users of an innovation within a
particular market (Rogers 2003). The term innovation has been defined a number of
different ways, Rogers (1983, 11) defines an innovation as: "an idea, practice or object
perceived as new by the individual. It matters little, as far as human behavior is
concerned, whether or not an idea is objectively new as measured by the lapse of time
since it's first use or discovery .. .if the idea seems new and different to the individual, it
is an innovation".

27

In marketing, an innovation is considered to contribute significantly to the extent
that a firm is market driven (Manu and Sriram 1996; Hurley et al. 1998). One of the most
popular theoretical frameworks for analyzing adoption characteristics has been the model
proposed by Rogers (1962). A number of other models and theoretical constructs have
also been developed. The following chapter will look at the Rogers ( 1962) model and a
number of others; the intention is to provide insight relevant to this paper. This research
has been completed within the context of consumer adoption of tangible innovative
products.

4.1 Adoption Literature Background
The roots of adoption and diffusion research extend back to Gabriel Tarde who
was one of the forefathers of sociology and social psychology (Rogers 2003). Tarde
observed a number of generalizations about the diffusion of innovations which he called
the "laws of imitation" and which he published in a book in 1903. Tarde was the first to
plot the S-shaped diffusion curve, which will be discussed further in this chapter. In 1943
two sociologists, Bruce Ryan and Neal Gross, published a seminal study titled "The
Diffusion of Hybrid Seed Corn in Two Iowa Communities" which renewed interest and
provided the modern genesis of present day diffusion research (Roger 2003). The Ryan
and Gross study (Ryan and Gross 1943), used interviews with adopters of an innovation
to examine a number of factors related to adoption. Researchers have since built on the
work of Ryan and Gross to conduct studies and develop theories related to the adoption
of innovations.

28

Considerable research has been done from a socio-demographic and
psychographic perspective of attributes of individuals in an attempt to identify
individuals who exhibit innovative behavior and are therefore likely to be early adopters
(Midgely and Dowling 1978). It was soon realized that if these early adopters could be
identified this would be an important target market in which to base marketing campaigns
for new products. These studies have attempted to link the adoption characteristics with
the cognitive style of an individual known as their innate innovativeness. The results of
this research has been mixed, with Foxall and Bhate (1993) claiming that this concept of
innate innovativeness is too simplistic on its own, and the propensity to adopt may be
influenced by the product content and levels of involvement. There have been a number
of other studies that have evaluated adoption behavior based on socio-economic and
demographic factors. It has been suggested that there are a number of personal
characteristics that could be important predictors of consumers ' adoption of an
innovation. Studies have suggested that early adopters often have higher levels of
income, are highly educated, and are of a higher social status (LaBay and Kinnear 1981
Lockett and Littler 1997). However, the consensus is that although these personal
attributes play an important role in adoption behavior it is the perceived attributes of the
innovation itself that are the more powerful predictor of adoption (LeBay and Kinnear
1981; Holak 1988; Lockett and Littler 1997; Rogers 2003).

In marketing adoption and diffusion studies, the highly regarded Bass Model has
received a great deal of attention (Bass 1969). The original Bass Model was developed to
predict the uptake of consumer products based on various advertising campaigns and how

29

these influence the diffusion process over time and how contagion and saturation effects
form the S-shaped diffusion curve. The Bass Model quantifies the introduction of new
technologies depending on the up-take by innovators and imitators by estimating the
introduction and acceptance rate variables (Bass 1969). This model is still widely used
today for forecasting sales of new products and services. The Bass Model is also used to
determine optimal product/service pricing and to analyze marketing-mix effects.

The most well know and widely used adoption and diffusion theories have been
developed by Everett Rogers. Rogers book Diffusion of Innovations was first published in
1962 and is now in its 51h edition (Rogers 2003). His theories are perhaps the simplest
model for understanding the adoption pattern of innovations. Rogers (2003) four main
diffusion theories are: innovation decision process, individual innovativeness, rate of
adoption, and perceived attributes. All four of these theories will be discussed in further
detail below.

The theories that Rogers (2003) proposed are known as epidemic models, where
the driving force is the spread of information through the meeting between an adopter and
a non-adopter. Whereby the non-adopter learns about the innovation and because of this
adopts the innovation - like the spread of a disease. There are other models that attempt
to give a more defined prediction by looking at factors not present in these epidemic
models, including such concepts as change of cost over time, product differentiation,
interdependence between technologies, continuing incremental change, critical mass,
network and compatibility standards, price and marketing mix issues.

30

4.2 Epidemic Models
One of the central themes of most discussions of new products (innovations) is
the apparent slow speed in which consumers adopt the product or idea. If this innovation
is a real improvement over an existing technology then why do some people adopt it later
than others? The literature does not provide a clear answer to this question. However,
there are a couple of points on which there is consensus. The first is that all potential
users never adopt new innovations at the same time, evidenced by the fact, widespread
diffusion of new innovations can take anywhere from five to fifty years to be adopted,
depending on the innovation (Mansfield 1961). The second point is that the diffusion of
an innovation follows a predictable temporal pattern, in the form of a sigmoid shape
known as the S-shaped diffusion curve (fig. 4.1): the diffusion rates first rise and then fall
over time, leading to a period of relatively rapid adoption which is between an early
period of slow take up and a late period of slow approach to satiation (Rogers 2003).

S-shaped diffusion
curve
Cumulated
number of
adopters

Timet

Figure 4.1 . S-Shaped Diffusion Curve. Source: Rogers 2003.

In epidemic models, potential adopters start by having little or no information

about a new technology and therefore are unable to adopt it. As diffusion proceeds, the

31

adopters via their day-to-day interactions will influence the non-adopters, just as one may
contract a disease by contact with an infected person. The result is that the number of
adopters grows and as the dissemination of the information speeds up, the diffusion will
increase. However, once the number of adopters exceeds the number of non-adopters, the
speed of diffusion decreases. An important factor is that the probability of coming in
contact with an adopter is not the same for every technology. This is dependent on a
number of characteristics of an innovation such as profitability, risks and the size of
investment required to adopt (Mansfield 1961 ). Epidemic models have been criticized in
that they assume that everyone has an equal chance of becoming "infected", which some
researchers conclude violates common sense (Davies 1979; Stoneman 1983).

4.3 Rogers Epidemic Models
As mentioned previously the four main diffusion theories proposed by Rogers in
his book Diffusion of Innovation (Rogers 1962) are: the innovation decision process,
individual innovativeness, rate of adoption, and perceived attributes. In the following
section each one of these theories will be more thoroughly described.

The Innovation Decision Process
Rogers (2003) describes the innovation decision process as one in which an
individual passes from first knowledge of an innovation to forming an attitude about the
innovation, to deciding whether to adopt or reject, to implementation of the new idea, to
confirmation of the decision. Rogers (2003) attributes this behavior to essentially dealing
with the uncertainty that is involved in deciding about a new alternative as compared to

32

one previously in existence. The decision as to whether to adopt or not occurs somewhere
between the initiation (knowledge) stage and the implementation stage (Rogers 2003).
The referring stages are:

1) Knowledge- occurs when a individual becomes aware of an innovations
existence and begins to develop an understanding of its basic functions
2) Persuasion - occurs when an individual forms an attitude, favorable or
unfavorable, towards an innovation
3) Decision- occurs when an individual starts towards the process of deciding
whether or not to adopt the innovation
4) Implementation- occurs when an individual actually starts using an innovation
5) Confirmation- occurs when an individual seeks re-affirmation for the innovation
decision already made

Individual Innovativeness
Roger categorized certain features that characterize adopters' attitudes towards
innovativeness and their position along the S-shaped diffusion curve. Rogers (1983, 242)
defined innovativeness as "the degree to which and individual or other unit of adoption is
relatively earlier in adopting new ideas than other members of a system". Rogers' five
categories of adopters (fig. 4.2) and their definitions are: (Rogers 2003)

33

1) Innovators - the first to adopt, are the first 2.5%, are venturesome, risk-takers,
have an ability to understand and apply complex technical knowledge, can cope
with a high degree of uncertainty
2) Early Adopters - follow the innovators, are the next 13.5%, are successful,
respected by peers, look to early adopters for advice and information, often serve
as a role-model for many other members of the social system
3) Early Majority- make up the next 34%, deliberate some time before adopting a
new idea, important link in the diffusion process, follow with deliberate
willingness in adopting innovation, but seldom lead
4) Late Majority- make up the next 34%, skeptical, cautious, feel increasing
network pressure from peers, do not adopt until others have done so, scarce
resource means
5) Laggards - are the last 16%, have limited resources to adopt, are isolated, are
traditional, suspicious of innovations, limited resources, must be certain that a
new idea will not fail before they will adopt

Adopters

Innova tors

% Adopters

2.5

Early
Adopters

Early
Majority

13.5

Late
Majority

34.0

Figure 4.2. Rogers Fi ve Adopter Categories. Source: Rogers 2003 .

34

34.0

16.0

Rogers (2003) is quick to point out that these five adopt categories are "ideal
types" and are only conceptualizations bases on observations of reality and were designed
to make comparisons possible.

Perceived Attributes
Rogers (2003) notes that it is important to not focus solely on the characteristics
of the different adopter categories and their behaviors but it is also important to analyze
the "innovation". Therefore, the question is, how do the properties of the innovation
affect the rate of adoption? In Rogers (2003) theory of perceived attributes he proposes
there are five features which impact the rate of adoption and that characterize
innovations:

1) Relative advantage- degree to which an innovation is subjectively perceived by a
potential adopter to be better than existing ideas
2) Compatibility- the degree to which an innovation is subjectively perceived to be
consistent with exiting values and social norms, past experiences, and needs
3) Complexity- the degree to which an innovation is subjectively perceived to be
difficult to understand and use
4) Trialability- degree to which an innovation can be experimented with on a
limited basis
5) Observability- degree to which the results of an innovation are visible to others,
visibility can stimulate peer discussion of an innovation and allow an innovation
to achieve status symbol character

35

In addition to these five perceive attributes proposed by Rogers (2003) a number
of studies have added a sixth feature (Ostlund 1974; LaBay and Kinnear 1981; Holak
1988; Lockett and Littler 1997):

6) Uncertainty (Risk)- if an innovation associated with a high level of uncertainty
or risk the individuals will be less likely to purchase. In Rogers (2003) Gerwin
identifies three types of risk:
a.

Technical uncertainty- extent to which a potential adopter finds it
difficult to determine how reliable an innovation is and how well it
will function

b.

Financial uncertainty - extent to which a potential adopter finds it
difficult to determine if adoption of an innovation will be financially
attractive

c.

Social uncertainty- extent to which it would be acceptable that
conflict could occur in the potential adopters immediate environment
with regards to purchase of an innovation

The six perceived innovation characteristics lay at the heart of the adoption of an
innovation process (Rogers 2003). The perception that individuals have about a particular
innovation effects their value assessment and their propensity to adopt a new idea
(Ostlund 1974; Holak 1988; Rogers 2003). The use of these six attributes allows
researchers to differentiate between whether a consumer will actively accept or reject an
innovation. Furthermore, a relationship exists between these six attributes in regards to

36

acceptance rates and to the innovation diffusion (adoption) rate. Therefore, it would be
expected that the higher the perceived relative advantage, compatibility, divisibility, and
observability of an innovation, and the lower the complexity and uncertainty (risk), the
shorter the diffusion time period of an innovation should be.

Rate of Adoption
Rogers (2003) rate of adoption theory describes the relative speed at which
innovations are diffused over time in a pattern that resembles an S-shaped curve (fig.
4.1), as described previously. The rate of adoption is usually measured as the number of
individuals who adopt an innovation over a give period of time. Rogers (2003) proposes
that communication channels used to diffuse an innovation will affect the rate of
adoption. A communication channel can be defined as a means to get a message from one
person to another. The use of mass media channels can be effective in creating
knowledge of innovations. However, interpersonal channels are even more effective in
changing attitudes toward a new idea and influencing a decision to either adopt or reject a
new innovation. Studies show that most individuals are likely to adopt an innovation
through subjective evaluation of peers who have adopted the innovation rather than due
to scientific research by experts (Rogers 2003). Intermediaries are also considered to play
an important role in convincing others to adopt an innovation. These intermediaries are
considered to be critical because often innovators are dissimilar to the broad mass of
potential adopters and therefore may have communication or credibility problems. The
two categories of intermediaries identified by Rogers (2003) are:

37

1) Opinion leaders- These are people who are characterized as being of a higher
social status and are somewhat more innovative than their peers. They play a vital
role in persuading the unconvinced majority of their peers. By accepting the
innovation themselves they help to overcome the caution about the risks and costs
of adoption.
2) Change Agents - These people work to expedite and broaden the range of the
innovation. They work to create demand for the innovation by reducing the
barriers to adoption, persuading adopters and supporting the adoption decisions
being made. These individuals act as a bridge between technical experts and
consumers, without having an allegiance to either group, and their ability to work
effectively with both groups is critical. Rogers notes that this group is most
effective when they work in partnership with opinion leaders (Rogers 2003).

4.4 Other Models
The literature review found a number of other adoption diffusion models that
cross over a number of different disciplines. There were three models that were discussed
briefly in studies involving bioenergy research, however, all three of these model do not
appear to have the popularity of Rogers (2003) epidemic diffusion model. The three
models are:

1) Equilibrium Diffusion Models- Treat the diffusion process as a sequence of
equilibria that is determined by environmental changes and the technologies
characteristics (Stoneman 2002). In this model the interplay between technology

38

suppliers and adopters play an important role, as well, heterogeneity of actors and
the agents' technological expectations are significant. Unfortunately, this model
typically assumes perfect information on the side of the adopters.
2) Evolutionary Diffusion Models- Uses some of the features of the equilibrium
model such as perfect information among actors and heterogeneity among actors,
but bases the dynamic analysis within a disequilibrium framework. In this model
adopters employ a simple set of rules that are updated by trial and error. These
types of model are also known as agent-based models and often require a large
amount of data and mathematical tractability.
3) Social Interaction Diffusion Models- Are based on multi-agent modeling. This
group of models has roots in graph theory, statistical mechanics and evolutionary
game theory (Kirman 1997; Young 1999). These models are best suited for
empirical estimation due to a richer mathematical structure and the functional
forms used often closely match multinomial choice models in econometrics.

39

Chapter Five - Wood Pellet Literature

With the rapid growth of wood pellet markets worldwide there has been an
increasing interest in the adoption and diffusion of wood pellet heating systems. The
majority of the research using diffusion models on wood pellets has been done in Europe
and is recent (e.g. Roos, et al. 1999; UMBERA 2000; Rakos and Hackstock 2001;
Vinterback and Roos 2001). The consensus as outlined in a paper by Madlener and
Gustavsson (2002) is that wood based heating systems still suffer from a number of
barriers, which include, being labour intensive, old-fashioned and outdated, lack of
public/private education, and experience among key supply side actors including:
architects, planners, and installers (based on survey done on Austrian pellet heating
systems installers [Jauschnegg 1982]), and lack of peer-group information in a large
share of the population (e.g. Rohracher and Suschek-Berger 1997; Rosh and Kaltschrnitt
1999).

In a 2002 study titled "Socio-economics of the diffusion of innovative bioenergy

technologies: the case of small pellet heating systems in Austria" the authors used Rogers
(2003) five classification of innovation features (this study did not consider the sixth
perceived attribute- uncertainty/risk), as discussed in the previous section of this paper,
and contrasted these with some socio-economic and environment features of small scale
bioenergy systems (Gustavsson and Madlener 2002). The aim of the authors was to
attempt to study the diffusion of innovation of small-scale wood pellet heating systems.

40

The following is a brief summary of their perceived attributes findings (Gustavsson and
Madlener 2002).

1) Relative advantage- The most important advantage of wood pellet systems is the
mitigation of greenhouse gases (substitution for fossil fuels) and the use of a
domestic/local energy resource. This would require diffusion promotion policies,
such as fiscal incentives, such as those provided in countries like Sweden to make
them competitive with the alternatives.
2) Compatibility- Technical compatibility should not be a major issue for
households that already have a central heating system installed, this is not the case
for households with electric heat. As far as social compatibility (norms and
values) it can be expected that small-scale bioenergy systems (SSBS) systems will
have a good chance where these may be conceived to be an improvement over
existing systems (log wood or chips to pellets). In some cases SSBS may be
compatible to an adopters needs.
3) Complexity- Modem SSBS systems are at a disadvantage over conventional
systems. Installers tend to stick with traditional system due to lack of knowledge,
training and experience. However, this could be overcome by helping owners
better understand their system and maintaining them on their own.
4) Trialability- Trialing SBSS systems is usually not possible. However, innovative
entrepreneurs could lease to potential adopters.

41

5) Observability- Surveys have shown that trade fairs, exhibition and store displays
play an important role to establish first contact with potential adopters and help
raise public awareness (Vinterback and Roos 2001).

In addition to these points the authors noted that lack of information of actors

involved in the purchase (the consumers) and the installers (e.g. architects and planners)
of new heating systems appear to be a crucial barrier that they suggest needs to be
resolved, especially in the initial phase of the market diffusion process.

In a 2004 paper, "Some reflections on the diffusion of pellet heating systems in

Sweden", Gustavsson and Madlener teamed up with Mahapatra (Mahapatra et al. 2004).
In this study, the authors noted that small-scale pellet heating systems (SSPHS) have
been sold in Sweden for almost 10 years but the market penetration has been rather slow.
They proposed studying the barriers of SSPHS based mainly on evolutionary economics
and sociological theories of diffusion. In terms of evolutionary economics the authors
applied the concept of innovation diffusion developed by Midttun and Koefoed (2003) to
the development of heating technology in Sweden. Their findings based on their
development of an evolutionary economic model are that institutional support has been
directly linked to the development of wood pellet technology. Therefore, in the absence
of policies to help internalize the external costs of fossil fuel systems, new bioenergy
systems are more expensive and therefore less appealing to the consumer. Presently, the
SSPHS systems are economical due to the high taxation of fossil fuels (Mahapatra et al.
2004).

42

In the second part of this study the authors looked at concepts from both the

sociological diffusion of innovation theory and also added in some concepts from the
economics literature. They noted the importance of looking at both supply and demand
side factors. For supply side factors they studied product improvement and differentiation
as well as information provision and supplier perception issues. On the demand side they
looked at price, consumer behavior, bounded rationality and technological lock-in. As
well they looked at perceived characteristics of innovation using Rogers (2003) five
characteristic that determine the rate of adoption of an innovation, and finally they looked
at issues of heterogeneity and spread of information. The conclusion of their study was
that investment cost and fuel price were not the major issues in the diffusion of SSPHS in
Sweden. The critical factors were product improvement and differentiation, information
gaps about existence of SSPHS and its advantages, dissatisfaction among earlier
adopters, and technological lock-in with fossil fuel based systems.

In a more recent paper "Energy systems in transition: perspectives for the

diffusion of small-scale wood pellet heating technology" completed in 2005 these same
researchers noted that small-scale wood pellet heating systems have started to penetrate
the residential heating market in Europe and elsewhere (Gustavsson et al. 2005). The
study noted that although there has been growth in the market there continues to be
impediments around issues including, cost reduction, convenience and reliability, and
environmental impact. The study noted that the literature repeatedly emphasizes that the
non-technical aspects related to wood based heating systems are at least as important as

43

the technical aspects for market penetration (Gustavsson et al. 2005). A lack of
information among potential adopters and also wholesale and retail sellers, politicians,
engineers, architects, planners, etc., is an important barrier that still exists. The study
recommends that adoption and diffusion modeling is a useful approach to study the
overall market potential of a technology and the diffusion dynamics and impact of
influencing variables. However, the research notes diffusion models can be limiting in
that commercial data is often confidential, and public data has yet to be systematically
collected in sufficient amounts. The study comments that epidemic diffusion models tend
to be the least demanding for data requirements but consequently suggests that this type
of model is better suited for market forecasting. The results of this study are that smallscale heating systems can be effective in meeting heat and electricity requirements and to
sustainable energy policies, provided that framework conditions allow the adoption and
diffusion to occur on a significant scale. The study recommends that cost and benefit
calculations should also be considered since they can provide incentives for adopters and
suppliers (Gustavsson et al. 2005).

44

Chapter Six - Hypotheses
The discussion of perceived attributes and adoption theories and the preceding
review of wood pellet literature reveals that the use of adoption theories can be a relevant
and effective means of developing a better understanding of the adoption of wood pellets.
The perceived attribute model that Rogers (2003) proposes has been used in wood pellet
research. Furthermore, this model has been used in a large number of other studies in a
variety of fields including adoption of solar energy systems (LaBay and Kinnear 1981 ),
internet grocery shopping adoption (Vrechopoulos et al. 2001; Hansen 2005), adoption of
open aquaculture (Tango-Lowy and Robertson 2002) and adoption studies of online epayment systems (Middlesex et al. 2006), to name a few. All of these studies have found
the perceived attributes model proposed by Rogers (2003) to provide useful insight into
consumers' behavior and propensity to adopt a new technology. In all of these studies, a
consumer survey component was one of the most popular methods of data collection.
Therefore, in this study the perceived attributes model will be used to help guide in the
development of a survey, based on the framework outlined in figure 6.1.

45

Perceived Innovation Characteristics
Relative
Advantage

Compatibility

Complexity

Trialability

Observability

Uncertainty

Perceived
degree of
advantage of
an innovation

Perceived
degree of
compliance
with values,
expenences
and needs

Perceived
degree of
difficulty to
understand
and use

Perceived
degree of risk
reduction by
testing the
innovation on
limited basis

Perceived
degree of
ability to
communicate
the
characteristics
of the
innovation

Perceived
degree of risk
of an
innovation
(technical,
financial,
social)

Rogers

Ostlund

Mansfield

(1993)

Positive

Holak

(1988)
Positive

I

Research Selected
Rogers
Rogers

(2003)

I

(2003)

Report Relationship
I Negative
I Positive

(2003)

Positive

(1974)

Negative

Probability of Innovation Adoption
Figure 6.1. Perceived Attribute Characteristics.

Based on the perceived attributes framework, the hypotheses to be tested will be:
The use of a adoption theory in the form of the perceived attribute model will provide a
better understanding of the local perceptions of wood pellets and to explore factors that
influence consumers' decision to either adopt or not adopt this technology.

46

Chapter Seven- Survey Methodology
7.1 Data Collection
The data was collected through an email survey targeted at citizens living within
the city of Prince George, BC. The surveys were presented to respondents in a web-based
format and were collected by an online survey company called Zoomerang
(www.zooomerang.com). A distribution list of potential respondents was constructed and
emails (with the web-link) were distributed in the early stages of the survey response
window. A web-link to the survey site was attached to emails that were forwarded to
potential respondents and further forwarded by the initial respondents. The survey was
"active", i.e. online, for a period of one-week in March 2006. In comparison to print
surveys, online surveys are comparable in respect to response rates, scale/construct
means and inter-item reliabilities and online surveys are likely to produce fewer missing
responses (Boyer et al. 2002). The survey required the respondents to answer all of the
questions provided, except for two: one identifying the respondents' city of residence if it
was other than Prince George, and one for any general comments on the survey. There
was some concern that requiring respondents to answer the majority of questions may
lead to a lower response rate, as some respondents may not feel like answering certain
questions (e.g. age and household income). However, it was determined that in order to
increase accuracy of the results this style would be used. The survey was short in length
and was estimated it would take the average respondent under ten minutes to complete.

47

7.2 Measures
The survey consisted of 19 sections of questions of which some had multiple
questions. A number of different question styles were used throughout the survey, which
included: yes or no, open responses, multiple choice, check boxes, and Likert scales.
Likert scaling is a bipolar scaling method, which measures a negative or positive
response from respondents. The use of Likert scales is commonly used in adoption theory
surveys (Vrechopoulos et al. 2001; Hansen 2005). In this survey a five point Likert scale
was used.

The survey was designed into four parts, which would not have been easily
identifiable by the respondents . The first section of the survey was to establish whether or
not respondents resided within the scope of the study (residents of Prince George, BC)
and also asked details about their horne ownership and current heating situation. This part
of the survey also determined whether or not the respondents were wood pellet adopters.

The second part of the survey was used to determine respondents' thoughts on a
number of important features of a wood pellet appliance and wood pellets. Using a five
point Likert scale (l=not important at all to 5=extrernely important), respondents were
asked to rate the features they would find to be "important" as it relates to purchasing an
appliance that uses wood pellet fuel. A couple of examples include: cost (price) of the
wood pellet appliance, ease of use of the wood pellet appliance, and quality of the wood
pellet appliance. At the end of this section respondents were asked to comment on what
would be their main reason for buying or not buying a wood pellet appliance.

48

The third section of this survey had questions formulated from previous perceived
attribute and adoption studies and the literature review. Informal qualitative information
gathering was done to help in the development of the questions used in this part of the
survey. A five point Likert scale design was used to rate these questions. Table 7.1
summarizes the questions asked and the associated perceive attribute intended to be
tested.

Table 7.1. Original Construct and Items

Construct

Sign Items

Perceived Relative Advantage

+

Perceived Compatibility

+

Perceived Complexity
Perceived Trialability

+

Perceived Observability

+

Perceived Uncertainty (risk)

Wood pellet systems are economical
Wood pellet systems are environmentally friendly
Wood pellets are compatible with my lifestyle
Wood pellet systems are old-fashioned
Wood pellet systems are complex
Wood pellet systems are labour intensive
Demonstrations of product before purchase is important
Availability of home trials before purchase is important
Wood pellet systems have been highly promoted
Wood pellet systems are a risky investment
Wood pellet systems have a positive reputation

A total of 11 items were used to measure perceived attributes, with end points
rating from totally disagree to completely agree or from not important to extremely
important. These main constructs (perceived attributes) were measured as follows:
•

Relative advantage was measured by two items, which measure the perceived

degree of advantage of wood pellet systems. Relative advantage was tested in two
areas (economics and environment) which are the two most used advantages
associated with wood pellet systems.

49

•

Compatibility was measured by two items, which measure the degree to which

a potential adopter perceives wood pellets to be compatible with their needs, as
recommended by Rogers (2003). One of the two questions ask specifically
whether or not potential adopters feel wood pellets are compatible with their
lifestyles.
•

Two items measured complexity, which is the degree to which a potential

adopter perceives wood pellets as being relatively complex. One of the two
questions asks specifically whether or not potential adopters feel wood pellet
systems are complex.
•

Two items measured trialability, which is the degree to which potential

adopters perceive wood pellet systems to be trialable. The questions constructed
for this measure used a different Likert scale than the other perceived attributes
and respondents were asked to identify whether they perceived trialability to be
important or not. This was determined to be the more appropriate approach to
evaluating this perceived attribute.
•

One item measured observability, which is the degree to which the result of

adopting wood pellets is perceived to be visible to potential adopters. The
questions designed for this measure asks whether or not respondents feel wood
pellet systems had been highly promoted. This should give an indication as to
whether or not respondents feel that the wood pellets have been highly visible to
them.
•

Two items were also used to measure uncertainty (risk), which is the

perceived risk associated with the adoption of wood pellets for potential adopters.

50

One of the questions designed for this measure asked respondents whether or not
they feel wood pellets are a risky investment.

The third section of this survey asked respondents a number of questions related
to factors that would effect their purchasing decision and were rated from not important
at all to extremely important (Likert scales). Respondents were asked, for example,
whether they thought feedback from wood pellet users, or the number of wood pellet
retailers, or wood pellet appliance retailers would be important or unimportant to them.

The final section collected demographic information on the respondents. This
included measures such as gender, age group, education level, and household income.

51

Chapter Eight - Results and Discussion

8.1 Survey Results
The following section will give a brief overview of the survey results. A
discussion of the results will follow in section 8.2.

The first question asked respondents to consent to the use of their answers for the
purpose outlined in the introduction to the survey. The consent approval rate was 100%.
The total number of surveys completed was 57. It was estimated that 150 individuals
received this survey and therefore, the response rate was around 38%. From a total of 57
responses, 47 (82%) individuals had their primary residences located in the city of Prince
George. The other 10 respondents ( 18%) were outside the geographic scope of this study
and these results were eliminated from the analysis.

The majority of respondents (92%) owned their own house. The remaining
respondents owned a townhouse, condo or apartment (2%), were renters of a house (2%),
were renters of townhouse, condo or apartment (2%) or had other living arrangements
(2%). There were no respondents that lived at home (fig. 8.1).

52

50

45
40
ttl

'E

35

-g 30
Cll

0

~ 25

Cll

~ 20
0

c:i 15

z

10

5

0
~

~

~~~~

ON n my own
house

ON n my ow n
townhouse,
condo,
apartrrent

~~~~

Renting a house

~~~

Renting a
townhouse ,
condo,
apartrrent

~

~

Living at horre

~

Other

Figure 8.1. Residential Situation of Respondents (n=47).

The primary home heating fuel source of respondents was overwhelmingly
natural gas (98%) and the only other fuel source identified was electricity (2%).
Unfortunately, this survey did not include any respondents whose primary home heating
source was wood pellets.

The majority of respondents did not have intentions to purchase a wood pellet
appliance (83 %) although there were seven respondents that were planning to purchase a
wood pellet appliance in 1-5 years (15 %) and one respondent was planning to a purchase
sometime after 5 years.

The first set of Likert scale questions asked respondents to rate, in importance, a
number of features of wood pellet appliances. All of the results for each question were

53

then averaged. The most important feature identified was the cost and availability of
wood pellet fuel (fig. 8.2). The quality of the wood pellet appliance, the ease of its use,
and the availability of reputable wood pellet appliance installers followed in importance.
The least important feature was the availability of government incentives to help cover
the purchasing cost of a wood pellet appliance.

Cost (price) of the wood pellet appliance
Payback period of the wood pellet appliance
Technical features of the wood pellet appliance
Quality of the w ood pellet appliance
Ease of use of the wood pellet appliance
Customer service and support for appliance
Government incentive to help cover purchasing costs
Reputable wood pellet appliance installers
Cost of wood pellet fuel
Availability of wood pellet fuel

1.0

I

I

I

I

I

I

I

I

I

I

I

I

I
I
I
I
I

I
I
I
I
I

I
I
I
I
I

I
I
I
I
I

I

I

I

I

I

I

I

I

1.5

2.0

2.5

3.0

I

3.9
3.
3.6
4.2
4.0
3.E
3.4
4.0
4.4
4.4

3.5

4.0

4.5

5.0

Figure 8.2. Evaluation of Wood Pellet Appliance Features by Respondents (average) (Likert
Scale: I -not at all important and 5 -extremely important).

The survey then asked respondents to identify their main reason for buying or not
buying a wood pellet appliance. This was an open-ended question and as such there were
wide ranging answers. However, there were a number of general themes to the answers
and these were categorized under a number of headings. The main headings used for the
reason not to buy a wood pellet appliance include: cost, environment (negative), not
enough knowledge, unknown risk, inconvenience, and no reason to switch (satisfied with
current heating system). Figure 8.3 displays the results.

54

14

13

r---

12

12

- r---

10 8

8 -

r---

6

- - -

6 14

1-

2

-

2 1-

-

-- 1

~~~~~~~ ~ ~~~~
Cost

Environment
(negative)

Not enough
knowledge

Unknown risk Inconvenience No reason to
switch

Other

Figure 8.3. Evaluation of Respondents Reasons for Not Purchasing a Wood Pellet Appliance
(n=47).

The two most popular reasons for not purchasing a wood pellet appliance were
respondents did not have a reason to switch from their current heating systems and they
had concerns with the costs associated with a wood pellet system. The respondents'
individual answers to this question can be found in Appendix 3 (question 8- individual
responses).

There was also a wide variation in the responses given as to reasons respondents
would choose to buy a wood pellet appliance. To ease in the analysis all responses were
put into the following nine categories: efficiency, aesthetics, cost savings (economical),
ease of use, an energy alternative, convenience, do not plan to buy, better for the
environment, and other. The most popular response was that wood pellet appliances
could provide a cost savings and were economical (fig. 8.4). The respondents' individual
answers to this question can be found in Appendix 3 (question 9- individual responses).
55

30

26

25
20
15
10
5
0

3

>c

en

()

()

Q)

~

"(3

:e
LlJ

4

2

.r::

1i5
Q)

<X:

en
Ol ""iii
c ()
·;;: .E
ro 0
en c

1i5
0

u

0

()

~

Q)

en

:::J

0

Q)

en

ro

LlJ

4

--

Q)

>- .:::
ro
Q)
c
c

Ol~

LlJ

~

""iii

Q)

()

c
Q)
"2
Q)
>
c
0

u

c
ro

c. :::J>0c
0

0

~

.9

c

Q)

.E E
~

Cii c

:!=
Q)

(!)

e

- 3Cii

.r::

0

">
c
LlJ

Figure 8.4. Evaluation of Respondents Reasons for Purchasing a Wood Pellet Appliance (n=47).

In the next set of Likert scale questions respondents were asked to select a rating

that came closest to the best description of how they feel about wood pellet heating
systems (!=totally disagree to 5=completely agree). These statements were based on the
perceived attribute model (table 7.1). The results for each individual answer were then
averaged. The results are provided in figure 8.5.

56

I

Wood pellet systems are labour intensive
Wood pellet systems are complex
Wood pellet systems are economical
Wood pellet systems are old-fashioned
Wood pellet systems are environmentally friendly
Wood pellet systems are compatible with my lifestyle
Wood pellet systems have a positive reputation
Wood pellet systems are a risky investment
Wood pellet systems have been highly promoted

1.0

I

l

_l

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

I

1.5

2.0

2.9
2.6
3.5

2.1 1
3.4
3.1
3.2
2.6

2.1 j
2.5

3.0

3.5

4.0

4.5

5.0

Figure 8.5. Evaluation of Perceived Attributes Questions (average) (Likert Scale: I -totally
disagree and 5- completely agree).

The results presented in figure 8.5 indicate that respondents more strongly agree
with the statement that wood pellet systems are economical and are environmentally
friendly and on average they more strongly disagree with the statement that wood pellet
systems are old-fashioned and that they have been highly promoted.

In the last set of Likert scale questions respondents were asked to rate in

importance (l=not important at all to 5=extremely important) a number of features that
they feel would help in deciding whether or not to purchase a wood pellet heating system.
The results for each individual answer were then averaged. The results are provided in
figure 8.6.

57

Availability of product information
Nuntler of wood pellet appliance retailers

~~

I

I

~
~

~ ~~~

14.0
~~

r---....-----,---,--,----..,.....1 3.6

I

I

I

I

1---..---1 ..--l .,...-1 . l.,. . Feedback from wood pellet users
r-----rl-r-1 -;-1-r-1 -,-----'j3.8
Demonstrations of product before purchase
1---.,..-1 ...,.1---.--1---,-1---.----'1 3 8
Nuntler of wood pellet fuel retailers

J

3.9

----.------1

Availability of in home trials before purchase

~

~~

1 3.4

I 3.4

Home delivery of wood pellets

~

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Figure 8.6. Evaluation of Important Features (average) (Likert Scale: I -not important at all and
5 -extremely important).

The results in figure 8.6 indicate that respondents feel that availability of product
information is very important in helping them to decide whether or not to purchase a
wood pellet heating system. This was followed in importance by the number of wood
pellet retailers and then feedback from other wood pellet users and the importance of
demonstrations of product before purchase. The least two important features identified
were the availability of home trials before purchase and home delivery of wood pellets.

The next question in the survey was interested in respondents' thoughts on what
the government's priority should be to help reduce the consumption of energy. The
reference to government was intentionally left vague, and by default, implied all levels of
government from municipal to federal. The majority of respondents (79%) felt that
governments should develop tax incentives to promote the efficient use of energy. The
results of this question are presented in figure 8.7.

58

Provide more information on efficient use of energy
Develop tax incentives to promote efficient use of 1--.1-.--'--_._-.....J..._ __.._ _..._ _~
energy
Adopt higher efficiency standards for energy consuming
equipment
Control more strictly the application of existing energy
efficient standards
Government should not be involved

Other

0

5

10

15

20

25

30

35

40

Figure 8.7. Perspective on Reducing Consumption of Energy (n=47).

The next question asked respondents whether or not they would be willing to pay
more for energy produced from renewable sources than for energy produced from other
sources and if yes, how much more would they be prepared to pay. Respondents were
asked to select one answer only. The majority of respondents (55%) were not in favor of
paying more (fig. 8.8).
30 ,---

26

25 r-- -

--

(/)

E
20 1---Q)

'C

c:
0

c.. 15 1---

(/)
Q)

a:
0

0

z

10

10 r--

- r---

5 r--

-

7
3

0

1\Jo

Yes , less 5%

Yes , 5- 10%

n

Yes , 10-20%

Figure 8.8. Perspective on Paying more for Renewable Energy (n=47).

59

Yes , 20% plus

In the next question, respondents were asked which product types they would be
interested in learning more about. In this questions respondents were asked to select all
the answers that apply to them. Interestingly, wood pellet furnaces received the most
responses at 51% (fig. 8.9), followed by wood pellet stoves (fireplaces) at 47 %.

I

Wood pellet stoves
(fireplaces)

I

I

I

I

Wood pellet furnances

I 24

I

Wood pellet boilers (hot
water tanks)

113

I

Wood pellet BBQ's

I

None of the above

I
0

122

112

16

5

15

10

20

25

30

Figure 8.9. Product Types of Interest (n=77).

Table 8.1 outlines the demographic characteristics of the respondents. The
majority of respondents were male (72% ). A number variety of age categories were
covered by the survey, however, there were no respondents under the age of 20 and only
two respondents were over the age of 60. The average respondent had a College diploma
or Bachelors degree. The average household income (per year) of respondents was
$90,000 to $119,000.

60

Table 8.1. Demographic Characteristics of Respondents

Respondents
(n = 47)

%

34
13

72
28

Age
Below 20
20-29
30-39
40-49
50-59
60+

0
7
11
15
12
2

0
15
23
32
26
4

Educational Level
High School
College Diploma
Trade Program
Bachelors Degree
Masters or Doctoral Degree
Other

8
14
3
18
4
0

17
30
6
38
9
0

Household income per year
$29,000 or less
$30,000 to $59,999
$60,000 to $89,999
$90,000 to $119,000
$120,000 to $149,000
$150,000 or more

1
4
11
15
9
7

2
9
23
32
19
15

Demographic Factor
Gender
Male
Female

8.2 Survey Discussion
The results of the survey provide interesting insights on the perceptions of wood
pellets by potential adopters in the Prince George market. Rogers (2003) describes the
innovation decision process as one in which an individual passes from first knowledge of
the innovation to forming an attitude about it, to deciding whether or not to adopt or
reject, to implementation of the new idea, to the confirmation decision. Rogers (2003)

61

describes this behavior as essentially dealing with the uncertainty involved with a new
alternative compared to one that is in existence. In general, the results of the survey show
respondents are interested in wood pellets and are somewhat knowledgeable of the
technology, but they also have a number of concerns. The respondents appear to be
somewhere between the knowledge (initiation) and the implementation stage. There were
no adopters identified in the survey, and based on the low market penetration of this
technology in Prince George, it is clear that the wood pellet market is in the early stages
of development. Therefore, it is suggested that the Prince George wood pellet market is
moving slowly up the S-shaped diffusion curve and is somewhere between the innovator
and early adopter stage (fig. 8.10).

Cumulated
number of
adopters

Timer
Adopters

Innovators

%Adopters

2.5

Early
Adopters

Early
Majority

Late
Majority

13.5

34.0

34.0

Laggards

16.0

Figure 8.10. S-shaped Diffusion Curve and Adopter Categories -Prince George Pellet Market.

62

In these early stages of adoption communication is one of the key components
identified by Rogers (2003) to spread information of the technology and increase the rate
of adoption. The respondents noted a lack of promotion, and showed they would be
interested in learning more about the product (importance of production information was
rated high). Clearly the wood pellet industry needs to do a better job of promoting the
technology and increasing consumers' knowledge of the product.

The respondents rated cost and availability of wood pellet fuel as the highest rated
wood pellet feature. If wood pellets are to compete effectively with traditional fuels on
the basis of costs/economics they need to be promote their message, which is, that wood
pellet fuel offers a cost advantage over traditional heating systems. It will be important
for wood pellet manufacturers and retailers to effectively promote locations where wood
pellets can be purchased, and to ensure customers that supply issues will not occur.
Respondents also found the quality of wood pellet appliance, ease of use and reputable
installers are important factors. It will be important for wood pellet manufacturers and
wood pellet appliance retailers to keep these features in mind when promoting their
products. Wood pellet appliance retailers (and manufacturers) should work closely with
installers to ensure the product is being correctly installed (according to manufacturing
specifications) so that customers receive all of the benefits of their wood pellet systems.
At this early stage in the adoption process it will be important that customers remain
satisfied with their decision to adopt. In the epidemic models of diffusion the spread of
information from adopter to potential adopter increases the rate of adoption. Any
negative feedback can slow the spread. Therefore, it will be important that this is

63

avoided. The two least important features identified were government incentives to help
cover the purchasing costs and technical features of the wood pellet appliance.

Respondents were asked for their main reasons for buying or not buying a wood
pellet appliance. This question allowed respondents to answer in their own words (i.e. fill
in the blank question). This provided for a number of interesting responses and
comments. Overall, this question was useful in identifying a number of barriers and
opportunities facing the local market. The following is a brief summary:

Table 8.2. Barriers and Opportunities for Wood Pellet Market in Prince George

Barriers

Opportunities

Potential adopters have no reason to switch
to wood pellet technology
Cost of switching perceived to be high

Wood pellets offer potential cost savings
Potential adopters find wood pellets a
energy source alternative
Positive environmental perceptions

There are unknown risks associated with
adopting wood pellet systems
Negative environmental perceptions

Wood pellets appliances perceived to be
highly efficient
Wood pellets provide an aesthetic appeal

Wood pellet systems perceived to be
inconvenient
Potential adopters do not have enough
information (lack of knowledge)

The primary questions to be critically evaluated were based on the perceived
attribute model proposed by Rogers (2003). A number of Likert scale questions were
used to test this model, based on the framework developed (fig. 6.1 and table 7.1 ). The

64

results of the specific perceived attribute questions were extracted from the survey and
averaged, the results are shown in figure 8.11.

Perceived Uncertainty (risk)
Perceived Observibilty
Perceived Trialability
Perceived Complexity
Perceived Compatibility
Perceived Relative
Advantage

1.0

1

1

I

I

I

I

I

I

I

I

I

I

1.5

2.0

I

I <.9

12.1
13.6
12.8
12.6
J3.5
2.5

3.0

3.5

4.0

4.5

5.0

Figure 8.11. Evaluation Perceived Attributes (average).

The respondents identified that perceived trialability was very important,
therefore, they feel there is value in being able to experiment with and have
demonstrations of wood pellet systems prior to purchase. However, the survey showed
that home trials were found not to be important. Obviously there are some inherent
challenges with home trials of wood pellet systems and this probably led to the low
rating. However, the literature suggest that in other technologies where technological
lock-in is severe the ability to home trial can be an important mechanism to ease the
uncertainly of consumers. One possible solution is for appliance manufacturers and the
pellet industry to look at offering incentives such as: service guarantees, maintenance
guarantees, warranties, etc. This would be an effective way of reducing consumers '

65

reservations, uncertainties, and risk factors . Another option could be to setup a leasing or
rent to own program.

Perceived observability was rated the lowest of all the perceived attributes (fig.
8.11 ). These questions were based on whether respondents felt that wood pellet systems
had been highly promoted. The wood pellet industry needs to increase the observability
of their product. It is suggested that in-store demonstrations and the use of tradeshows
and home shows is an effective way to overcome the low observability of wood pellets
systems. Furthermore, mass media promotion through local television, radio or
newspaper would also increase the observability of the industry. Locals may also be
interested in taking a pellet mill tour and learning more about the industry.

The perceived relative advantage (fig. 8.11), which was measured by the degree
to which potential adopters perceived wood pellets as being economical and
environmentally friendly, rated high. This provides areas of opportunity for the industry,
which should be promoted. It will be important for the wood pellet industry to find ways
to transition potential adopters from their traditional heating systems to wood pellet
systems, using positive economic and environmental promotion strategies could be a way
to accomplish this.

In the literature review it was found that in some markets there is a perception that

wood pellet systems are old-fashioned and outdated. This was not found to be the case for
this survey. Therefore, this is another opportunity for the industry; to promote wood

66

pellets as a new technology. The other perceived compatibility question was whether
respondents felt wood pellets were compatible with their lifestyle. Although this question
was not rated high, it appears that wood pellets were generally compatible with the
lifestyle of the majority of respondents.

The perceived attribute of complexity shows that respondents find wood pellet
systems to be somewhat labour intensive and complex. The wood pellet industry needs to
find ways reduce the complexity of the product and/or delivery systems. For example,
improvement to wood pellet appliance technology could allow for less ash deposits
(which need to be cleaned out of the appliance regularly) and/or extending the running
time of the appliance so that less filling up of a pellet hopper is required. Furthermore, if
the efficiency of the appliance was increased this could reduce both the ash deposits and
could potentially extend the running time. In Europe the wood pellet industry has
experimented with the home delivery of wood pellets as a way to decrease the complexity
of having to purchase wood pellet fuel regularly. However, in this survey respondents did
not rate this option as an important feature. The concept of home delivery is an area that
should be studied further.

The perceived attribute of uncertainty (risk) was tested by asking respondents to
rate whether they feel wood pellets were a risky investment. The results were that the
majority of respondents did not feel that wood pellets would be a risky investment and
perceived wood pellets to have a positive reputation. A few respondents did list some risk

67

related answers in their response to the factors effecting their decision not to purchase
wood pellet (e.g. increase risk of fire, pellet supply) (fig. 8.3).

One of the key potential drivers in the adoption process can be government
intervention. Several questions in the survey looked at whether respondents felt that
government should be involved in the promotion of wood pellet systems. The survey
indicates that the majority of respondents agreed with the idea of the government offering
tax incentives to promote efficient use of energy systems. Currently in Canada, there are
no tax incentive programs for installing (using) wood pellet systems. In the EU (notably
Sweden) the use of tax incentives has been a popular mechanism to promote the use of
bioenergy technologies (e.g. wood pellets).

Due to the limited role government is currently playing in the Canadian industry,
the role of the supplier (i.e. wood pellet producers/retailers, wood pellet appliance
manufacturers/retailers) becomes increasingly important. The economic and social
streams both recognize the importance that supply side factors play in the diffusion
(adoption rates) of an innovation (Mahapatra et al. 2004). It will be the responsibility of
suppliers to disseminate information, product improvement and product differentiation.

This survey has been effective in identifying a number of barriers and
opportunities for the local wood pellet market. The research hypotheses that the use of
the perceived attribute model will provide a better understanding of the local perceptions

68

of wood pellet and will explore the factors that influence consumers decision to either
adopt or not adopt this technology has proven to be correct.

8.3 Limitations and Future Research
For many respondents wood pellet use may represent a rather new technology that
they are not very familiar with. One issue of the survey design was that questions
(specifically the Likert scale questions) did not allow respondents to answer, "don't
know". This option has been made available in other studies. This could better measure
the knowledge of potential adopters, however, the downside is that by adding this option
respondents could choose this option as a default, which could reduce the accuracy of the
study. Future studies will need to consider this option carefully.

A number of adoption surveys have added in a variety of questions to identify the
adopter characteristics of respondents (i.e. innovators, early adopters, early majority, late
majority and laggards). One approach commonly used is to relate these adoption
characteristics to socioeconomic and communication characteristics of the respondents.
However, these studies make assumptions on the appropriate characteristics to use and
what types of questions best answer this. Therefore, due to the complexity of trying to
determine the best measures, this variable was not added to this study. However, if done
correctly this could have provided insight into important adopter characteristics of
potential adopters of wood pellet technology.

69

The study was limited to one geographic area and therefore this limits the
generalizability of the results. Furthermore, there may have been some bias due to
sampling technique and non-response errors, although care was taken to minimize these
biases. Insights regarding non-adopters of wood pellet heating systems are provided by
this survey. It would be beneficial in future studies to ensure that adopters of wood pellets
are included in the analysis. Adding this dimension could lead to a better understanding
of the purchase adoption process. Future studies should also attempt to measure the
actual market penetration rate of wood pellet heating systems. If market penetration rates
can be determined a Bass model (or equivalent) could be used to predict and analyze the
future penetration of wood pellets.

70

Chapter Nine - Conclusion

The first part of this paper was exploratory research on the state of the wood
pellet, it's associated technologies, and a review of local and international wood pellet
markets. This information is important, as minimal amount of this type of research has
been done in Canada. The objective was to provide an overview and identify some of the
key factors that influence the market. It was determined that the market penetration rates
of wood pellets in Canada are low and are most commonly used residentially in wood
pellet stoves/fireplaces. Canada produced about 915,000 tons of wood pellets in 2005 and
is expected to export about 582,000 tons. Therefore, Canada is a net exporter of wood
pellets. Markets in Europe use the majority of these surplus wood pellets. The European's
(specifically Sweden) have not only developed residential markets but also small to large
district heating and cogeneration operations. The use of wood pellets in most European
markets is being driven by higher energy costs and geopolitical factors. Many European
countries have been active in promoting technologies that use energy from renewable
resources and are placing a greater emphasis on energy security. These countries are
offering incentives and research money to help develop wood pellet markets. In Canada
no such incentives are currently in place.

In Canada the wood pellet suppliers, wood pellet retailers, wood pellet appliance
manufacturers and wood pellet appliance retailers are the key drivers of the market
(supply side factors). The onus is on these players to promote and grow the business
domestically. In order to grow the market it will be important for these players to develop

71

comprehensive strategic plans which should involve all interested parties. The recent
development of the Wood Pellet of Association of Canada is a step in the right direction.
This association is just in its infancy and has yet to develop its web page, branding, and
marketing campaigns.

The second part of this paper had the objective of developing a better
understanding of the perceptions of wood pellets and to explore the factors that influence
a consumers decision to adopt or not adopt this technology. The research method was a
survey focused on residents of Prince George, BC. A number of adoption and diffusion
theories were analyzed to develop a better understanding of adoption and diffusion
characteristics and to aid in the development of the survey. It was found numerous
research studies have used the Rogers models of adoption and diffusion. This is the
model that was chosen and Rogers (2003) perceived attributes model was tested. The
results of the survey provided a number of interesting insights into the local perceptions
of wood pellets. The hypotheses tested was that perceived attribute model would be able
to provide a better understanding of the local perceptions of wood pellet and help provide
a better understanding of the factors that influence consumers decision to either adopt or
not adopt this technology. This has proven to be correct. The results of the survey
provide a better understanding of the barriers and opportunities for the local wood pellet
market. One to the major challenges facing the local wood pellet market is its ability to
move potential adopters away from their traditional heating systems. Technological lockin is clearly an important factor. The survey also identified that the wood pellet industry
needs to do a better job of providing information on the potential benefits of wood pellet

72

systems and effectively communicating this information. In the initial stages of market
development effective communication strategies and effectively promoting the product to
potential adopters is a key component for success (Rogers 2003). It was found that wood
pellets have the perception or being economical and environmentally friendly and were
not perceived to be a risky investment or old-fashioned. The survey also showed that
trialability of wood pellet heating systems was important and there was value in being
able to experiment with and have demonstrations of wood pellet systems prior to
purchase. These represent a number of opportunities for the wood pellet industry.

73

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78

Appendix 1

Typical Wood Pellet Properties
Higher Heating Value BTU/lb
Moisture Content
Non-combustible ash
Bulk density as delivered
Flame temperature
Elementary Analysis
Carbon
Hydrogen
Nitrogen
Sulfur
Chloride
Oxygen

8790
5.0-5.5%
.39 %
40.7 lbs/ft3
1200- 1400
53.6 %
6.2 %
.1%

ND to< . I %
ND to< . I %
40. 1 %

Ash Analysis-Metals Scan Mg/kg
Aluminum
Barium

11600
1160

Cadmium

<5

Calcium

123000

Chromium

100

Cobalt

< 20

Copper

100

Iron

18600

Lead

<50

Magnesium

24800

Manganese

12700

Phosphorus

5500

Potassium

54500

Silicon

66000

Sodium

3600

Strontium

600

Titanium

800

Vanadium

<50

Zinc

1130

Carbonate C03 (on ash)

27.7 %

79

Appendix 2

NEWS RELEASE
February 17, 2006
Hou ston Pellet Lim ited Partnership
Houston, BC - Canadian Forest Products Ltd ., Pinnacle Pellet Inc., and the Moricetown Band are
pleased to announce the formation of a partnership for the development of a wood pellet production
facility to be located adjacent to the Canadian Forest Products Ltd . sawmill in Houston , BC .

The wood pellet plant is part of a larger project that includes the installation of a new bark-fired energy
system at the Houston sawmill. The combination of the wood pellet plant and the bark-fired energy
system provides an economically viable, value-added alternative to the Tier 1 Beehive Burner currently
operating at Canadian Forest Products' Houston Sawmill.
Pinnacle Pellet Inc. is a privately held company with a reputation for producing high quality wood pellets.
Pinnacle Pellet Inc. is based in Quesnel and currently operates production facilities in both Williams Lake
and Quesnel.
The Moricetown Band and Canadian Forest Products Ltd . have a long-standing mutually beneficial
relationship. Kyahwood Forest Products is a profitable joint venture between the two parties that directly
employs 75 people in Moricetown , BC for the purpose of lumber remanufacturing and finger jointing.
Chief Warner William commented , 'The investment and involvement in the pellet plant further solidifies
the relationship and is a further step by the Moricetown Band to achieve economic self-sufficiency".
The combined wood pellet and bark energy system project has been under development for the past two
years . Construction is scheduled to commence in the second quarter of 2006 with wood pellet production
beginning in the fourth quarter. The bark-fired energy system will be commissioned in the second quarter
of 2007. This timeline will ensure the closure of the Tier 1 Beehive Burner by the regulated December 31 ,
2007 phase out date.
The wood pellets produced at this facility will be suitable for both industrial and home heating
consumption and will be sold into a combination of the North American , Asian and European markets.
To facilitate the offshore shipment of wood pellets, the Houston Pellet Lim ited Partnership's project also
proposes the development of a wood pellet receiving and storage facility adjacent to Ridley Terminals Inc.
in Prince Rupert, BC .
The bark-fired energy system will consume all of the bark produced at the Canadian Forest Products Ltd.
Houston sawmill and will provide the heat required for both lumber and pellet production .
This project not only supports economic diversification within the region , but also supports the growing
movement from fossil to renewable fuels .
For more information , please contact:

- 30-

Leroy Reitsma
Business Development Manager, Houston Sawmill
Canadian Forest Products Ltd.
250.845.5224 (Work)
250.845.8285 (Cell)

80

Appendix 3
Zoomeral:!g

Surv
MBA • Pellet Survey

Report creat ed on : Mar 28 2006 8:29PM
The re54Jits )'Qlr survey are displayed belcr.v. I )'Dill' survey includes text
respcmes, d ie the V'li!'ll' buttoo ID read
\'idual resll.ls. To ex de a
particulill' response, dic:k the
ed Responses bll'!lcn. You oan then
vie-.v l he sa cf individu responses that are currently included and select
those you 1 · ID exdude. Results belcw ccntain only lnd'uded respcnses

Cross -abula1e

'ct:tWDC DLI\kiCflU,O N SC:S

Or.e

~

Uodl'..:e-d OS".e

Cc

Ma.r 1S ~

47

~

llllil:.l.i.Ud kc

llntuea ,...,,,.....,. • 10

Cran referer..ce mdtb e

c :e.sttons
Dtwmloac Results

6:4EP,A

R e::

Mar 15 Z:OOS 9:24P•A

~

sul:s In

~ .,'"mat

57

~

Responses :

• Co pletes o ly

Par tials only

Completes & Partial s

.

he res !ts o t ·s survey will be used to p repare a report on the
oonsrrai nts a d opporlunr · s o the local 'NOOd pe let marke· This
pr-o' ect i s be'ng under..aken as pan of the req-ui rements to obtai n
an MBA degree ire U BC. Do you conse t to the u se of your
1.survey answers or this pur pose?

Y
es ----------Y
es ----------No

Ttttml

47

~

0

o,-.

47

100"k

- - - - - - - - - - - - - - - - - - - - - - - - - - - - -..

Is your p ·mary residenc e loca:ed wiihin the City of P rince
2.George, BC?

No

3.1

ot, · •Nhi ch city is yo r primary plaoe of residence?
Mac. enzie

47

o,-.

47

Nlo .. t.e...~

•••.-o, .....
0

McBride

0

Quesnel

0

Willia sLa. e

0

1 oi6

100':.

0

~

~

RoU!J

0%
0%

o,-.
o,-.
28-Mar-06 8:33 P.::\1

81

Appendix 3 (cont.)
~

Vanderhod

0%

0

Otl!er. Please Spetify

~

100%

To,•l
(

W h ich of the fo lowing be-st describes you r p ·mary p ace of
4.r esidenoe? Please choose on e onfy.

N'w•t..f• •'

lt.UftDIIU•

Own my o--.m neuse

43

. ,.,..

"•

""

0

P I%

Own rrycl\n
io\\Tlhouseloonc!olaparonent

2%

a house

2%

Ren

.,

RerrJng an
io\\nhouseloonca'apartment

2%
0

Living at home

~

2%

Other. Please Spe:::ity
Te,•l

...

47

100%

~

sotJrce?

a •• ...., ......

~

.-ouo

46

Ql%

Electricity

1

Oil
Wocd pellets

0
0
0

Do not 00"1'1

0

2%
0%
0%
0%
0%

0

0%

47

~~

FTE!wccd (cord-wood)

• Otner. Please Specify
Tat•l

'

\
Nw .. boer O''

~

r --

Are you plann· g to pu rchase a
6.pelle1s in lhe nea.r future?

t\tl ......... ~

Nu • M•&'

~

0%
0%

1-6 mcnths

0

6 months to a year

0

-5 years

7

5%

5 years plus

1

2%

39

S3%

47

~

ot p a11ning to purehase

Touol

•.__

Pl ease ra:e the feanrres bel ow in i jl<)rtan ce as it relates to pur chasing a n app nee
(stove/fi repl ace. furnace or ho1 wa:er tan ) tha: uses wood pelle1 fue l. Selec'. one ra:ing
7. for eac on a scale of -5 ( I ) is "not imponant a1 all" a nd (5 } is "extremely important".

~

~

~~

a t.lua.l tt f.M_f.b.w .r, ••
-'PIH-{Ir•ullr• qrttlwwn

~

, . , ., • • • , ... JI

I. Ccsi (price) of the weed pellet

appliance

~

...

I

2

4",.

4%
2

at at a
important

2

3

4

5

E:xtrerr..ely

important

43%
20

30%

14

28-Mar-06 S:J3 ~

2 of6

82

Appendix 3 (cont.)

2. Payba::k perod of 1he weed pellet
appliance

3. Tec'hnica. features at the wood pellet
appliii!ICe

of the 1\Cod pellet iiplllianoe

4. 0
appliance

6. Customer seNice and suppcn lor
iiplllianoe

7. Goverrwnent

3

9%
4

il"k
9

32%
5

34%
16

~

3

6%
3

28%
13

40%

19%

5%

~~

2

0%
0

7

20

2

4%
2

%
5

47%

22

34%
16

6%
3

23%
1

32"k
5

32%
15

5

%

2 ."
1

43°k

15%
7

4%

Q%

e

38%
18

~~

1

,.

34%

4"
2

32"-'

57%
27

2%
1

6%
3

28%
3

60%

.,
4 ,.

5. Ease cl use of 'he 1\COd pellet

· es ID he"p rover

pun:hasing costs

6'Y.

8. Reputable wood pellet app_anoe
ins<a
9. Cos1 of weed pellet fuel

~

3

11%

,.

5

4.,
2

,.

4"

2

7

2

20

9

5

(l

~

28

8.What wo d b e your m a in rea son for not buy" g a wood p ellet applia n ce?

.

47 Responses

'

------------------------------------------------------------,
9. What wou d b e your m ain rea son for buyin g a wood pe let appliance?
47 Responses

r

SeleCI! what rating com es closest t o lhe b es1 descri:plion of h ow you feel abou1 wood
pelrei ea·· g sys1ems. SereCl! one ra ting for eacih o a scare of 1-5 (1) is "totalfy
10.di sagree· and (5) is · completely agr ee".

5

1

2

3

1. Weed pellet systems are labour

g:-k
4

~ ~

7

eo%
28

5%
7

2%
1

2. 'Need pellet systerr.s are oomplex

13%
6

28"
13

45%
2

3%

2%

3. 'i''lcod pellet systems are eoonc c

4"
2

~

38%
18

45%

9%

17

~~~

13

26%
12

9%
4

~~

~~

6

26%
12

40%
19

1J:• ·

2 ~~

45°k

2%
1

9%

9%
4

eook

26.-'
12

4%

~~

400k

%
5

2%
1

~

6"-'
3

~~

~~~~~~

r-1w•••• ..•· .- A..ial

V l f'f 1\tl:g Nt it! o, tMflllt

~

~~ ~~

•'''",..to

r.ta

intens:"e

4. Wee d pellet systems are
cld-fa

cne:i (outdated)

5. Weed pellet systems are
environ entally friendly
6. Woo d pellet systems are compatible
w.:ih my lifestyle

7. Wee d pellet systems have a positive

reputatcn

Toially
dis-agee

,.

~

3
4"!..
2

~~

1

8. '•'l'cod pellet systems are a sky
inves1rnent

g•··
,.

9. ';'l'ood pellet systerr.s have been
highly prorno:ed (aC..ertised)

30%
14

4

2

1

2

28

,.

18

~

33···

26"k
12

18

3 oi 6

\

Completely
agree

6

2

0

1

4

2.*"
1

"'"
..
7
4
2

,.
28-:Mar-015 8:33 P::'-1

83

Appendix 3 (cont.)
Zoomermg

..

~

{

In order to elp in decicfng whet er or no1 to purchase a wood pellet heating sy stem.

p ase rate !he following teal res in i portance. Sel ect one ra ·n.g or each on a sea

11 .1 -5 (1) is · ot important at air and (5 ) i s "exrre
" ' " Jq:J JHfUf.IQQa .Ill
~
tobl
1
2
rO:fJHMil.n r ~~ lfl• bl.itl 'n-...,-,ibut
Not a1 all
~
~
•tala
pooan1

ely i portam·.
3

5

EX!femely
. poriarrl

of prod001 infoon.a:ion

~~

40"
2

11

362/c
17

2. Number ci wood pellet app..ance

retailers

2%
1

6%

~

~

3. Number ci wood pellet fuel --a.ers

2'!\.
1

~

2fi-2t..

1. Availab

1

2"'..

~

3

17

1

34"',.
16

1r1.
8

18

,.

~

12

20

~ ~

13

9%
4

26%

3&.....-.

213.,

1

5. Gemcnsirations d p-cduct before
purthase

4"'

6%

26"

,.

3?':.

3TI.

6. Availab ty of n home trcals before
purthase

6%
3

~

a

~~

7. Heme derivery ct weed pellets

~~

g.o"

4. Feedback Ire wood pellei users

..

2

4

12

3

12

18

12

15

13

287'.
13

~

40al..

a

4

of

15
2 .,
10

,.
,.
2fl'

19

12

r--

Would you be prepared to pay more or en;e gy p oduced fr om
renewab le sources tl\an for energy pr oduced from other sources
and if yes, how much more would you be p epare d to pay?
12.Piease choose o eo ly.

ot

..,

~

ll•IJtOftll••

~
"CitiCJ

,: ··"

~ to pay men!

26

Yes, less than 5%

10

Yes. ~

~~

7

Yes, 0..25%

3

6%

47

100Z:.

3

6%

Tet•l

What should be !he go•1emment's p ·o ily :o help people reduce
13.1he consu ption of en ergy? Please choose one oory.
Pr011ide JTl(lfl! '
on en
e 1c.ent use ci energy
Develop tax inoerdves to • • • • • • • • • • • • • •
promote effic:enl use of

energy

~~

stalldards 'or energy

-·"'

2%

Yes. moll? than 25%

COOSLilling equprnen1

21%

e

37

3

Con1rol JTl(lfl! strictly the
applirot:on of ex:sting energy
eff:C· 1 standatC:s

2%

1 should na be
involved

2%

Other. Please Speciiy

2

4%

47

100Y.

28-Mar-015 8:33

4of6

84

~

Appendix 3 (cont.)

W hat product types wo td you be ln:eres:ed in teaming more
14.about? Please sel ect all that apply.

. ....... .,.,..

N!oiilltboer O>f'
~

R':'ll'•"'e

Wood peCet
st&ves • • • • • • • •
( eplaces)

22

47°.4

Wood pelli:1 umaces • • • • • • • •

24

51 %

Wood pellet boilers (hot water • • • • •

13

28%

Wood pe! el BBO's • • • •

12

26%

None of 1he above

6

3%

tanks

\.

Female

Nu,.twlr 6P'

Ret,enn•

15. What is your gender?

~
T•'•'

34

72%

13

28°4

47

100%

N""'boe' O>F'
a,.,...
.......

16.What age gr oup would you fall into?

Re;:r:•:••

~~

0

Below20

0%

7

5%

:!n-39 - - ·

11

23%

15

32%

50-59

12

26%

6D+

2

4%

47

~

20-29 -

40'-49:::::T•'•'

\.
What is the highest ve f o
17.P!ease clloose one only.

NY ... tt.e, .. r

.... JitCtft•••

High School

"atiD

~

8

7%

College Diploma • • • • •

14

:W4

3

6%

Bachelors Degree • • • • •

18

~

rade Program

e

~ or Occ1cral Degree

4

Q%

Otner. Please Specify

0

0%

47

100'1.

T.,••

(------------------------------------------------------------------------of
lll•t,.an•••
18.What is your an n al househotd · co e (pre-:ax)?
~~~

~

trlat:ht

S2Q,QQQ or less

1

2%

!30. OO to $5Q,QQQ

4

Q%

~

10 $8Q,Q9Q

$QJ,.OOOtc$11Q,QQQ - - - ·

11

23%

15

32%

$ 20.000 to $14Q,QQQ

Q

9%

S !.(].000 a rrore

7

5%

47

100%

T•'•'
S of6

28-Mar-015 8:33 ~

85

Appendix 3 (cont.)
Individual responses

Sharing a heme

rry s ster and "

oaughte-

8.Wh atwo ld be you:rma"n reason for noi buyi

- - QW:f,i.gt;

lns11rance company

2

3
4
5

plying t11 • w:xx!

a

er ·sk ihan natural gas as a source ce primary heat

a'J'eady h;we gas fireplace and urnaoe
0051

Would not want 1he associated mess that cernES IV it, or pay a the
llaticn · it. I WOillfd
crunch !he numbers on the cost Does it take up more room in tne holiSe?
Not knDI\i edgab:e enoogh re the pros & coos
a1ion about the product

6

Not

7

As I transfer ms. would i be wooh my w· "le 1o spend 1he money o.n a wood

8

CoSI cf purchasing & ·

Q

·.·e to

h

•

. appliance.

lling 1\l:lcd pellet appliance

ey are NOXIOUS polluters disguised as eneryy e.'ficrenl app
es, I :ve next door o someone who
dew without fJiing my cuse wif the combusion
us.t

has c.ne and I can't open a

CoSI efficiency
:ion

12

e cost

13

Paybac

14

q

inslallation oonsirai.nls.,.

o.n.

~

ty

15

CoSI to rep a.oe exis1ing uel source

16

Unfam;;;ar with ihe product and pemaps initial oost.

H

Expense, very [1t.e · ormation a•1 - le

'8
1.

AI eady inves.:ed in very efficient naiu
Not t

gas furnace

iar with s;i ice vcli ty or pelets in the fu.. e

20

Cos.t

2

No reasoo a1 t s point in t

22

I think · increases the risk of fire in ihe house. ake extra room in the basemEnt.

23

neEd 1o keep refueling

2<1

Co!il cf purchase

25

I don't know ihe echnoogy or s

26

lr. would increase particulate levels

2P

y main w uroe of heal
ng points cf wood pellet a

ere's no reason. at the mom 1r

Z7
28

e.

I'

anee

the air shed of PG
not in tne market 1o

y one.

satisfied wih narural gas

dy h;we a ui!Ct1

·ng

at source,

311

My heme is se up f.or na1ural gas a ady. I O\\n a 1\l:lCd burning S(Ove. Curremly the price of pellets is
not an
live for me to s1\it.ch.

3

Natural Gas 1\l:lrks. is cl

and so far tne p-. ce has

arced a closer look 1o altemati..-es.

86

Appendix 3 (cont.)
32

Cosr.

33

A

34

AC'dtiooal smcte ano fine partx:ulale matter
pocr aT q

ady

~

gas furnace

35

l

3iB

Curr

3

l •,•e be fed up •li using wood uel for 1 years in Romania. De
ronfcrtable ic use na1u gas or ele<:irio:iy fer eatng.

38

COSI ' 0 swil

~

ve one nm· . A parlor sieve

!he Prince George bcw are

inere as ng ihe alreooa)

ba.se ent

tly. laci cf knol\i edge about the appliance .
:rvely i s 1111roh mere

0\!el'

That !here is teo eng ct a pay back period fer 1he invesm1.ent. cr that there is a consc.erable risk •
!he a
bility of !he pellets rna.y dirrj nis or ihe price QJ ll!QI1 aftEr ronversicn. e people - s ~
!he material to ~
e'sYiill sell to 1he highest boder and wiih ihe amount of energy pro_ eels
going in around 1.he area y 'ear is hat ihe pricing w
j1.111p s1;ni antfy fer flellet suppliers.

40

CoSii

4

Not sure where io place it Ill o

hol.se,

42

pri

and av "lability and con>

·ence

43

Sa!isf:ed vii gas heat.

44

I

45

Clea

46

COSl

47

tecltnclogical lod-in

d '.cNI long it 1\oold ta e a pay back

ady ha.ve a wood bliiUlg steve in by residence
ess ct bum, avai

"l:ity of appliance and pellets. Cos<.

/------------------------------------------------

9.ll"olhat wo ld be your ma·n reason f or buying a wood pellet appliance?

. . iAI.I'""'

gas.

less depEndence en

2

led: and

3
4

efficiencty

5

Savings over natu

6

Not sure ·hal I would buy one

- oomfcrtohmod fire

y if t.'leirwasa savngs.
gas

7

lollg tenn savings

8

Rising oost of natura gas.

g

I woukl never buy one. I wouldn' Ell

10

Cost efficiency

let them G."VE

e one.

hea!ing cosi s

12
13
14

e savings, if any.
pa-ybooak and

~

~ no impaeti lo !he env omem

energy oosts

15

Reductoo

16

CoSI effe::tve,

17

rmewatle fuel souroe

viranenial ooncem.s.

18

Pnce and price volatility of alternates

19

clean,

20

Ease of use

2

Have used one before instead of wood sieve. I like 1.he constant
:1endeo feed iaprovides.. Also I
e\'e it is a lo1 cleamer than a Ylood st.o'"ie in terms of emissions. The outs de air ~
into !he
firebox dire01ly makes it a lot ore efficient.

~ efte::tve

87

Appendix 3 (cont.)
22

economical eat scuro;o

23

esfile: cs in a smallli..-ng area

24
25

Save SS$
1· it was an e -lcient, cost effecli..-e means ci healing my orne.

m Less expensi..-e ihan gas.

2il

27

Us ng waste prcdu:cl appeals to me.

28

theoost

2Q

Need an eOOflorn:c

3l!l

Cleaner bLming iuel 1'1ith less worry
~
y fifE'S. Esier to
st prefer natura l gas app.:!illloes though t::JJer pe t

31

111\oold have to pay for itsel in a few years (<5) in dif'.erama healing costs and NOT taken any lllCf1?
laboor on my piirt t
the iilural gas SlfS(em I have now.

heai S)l">l emJ new construction

3:2

Cog

33

Better for

34

Reduce dependeooe on Na:

35

li I m.cw then 11\'00id buy a new one

~

tn.an 'liood bLilling

~

I

.e erwiroment
gas, not

~

to pay me monthly Terra sen Gas bil to foreign [l""tmership

36

I

37

11is hard fer me

3S

ody i it was eronomical

3'11

1€ it prmted out ID te less expensive 1han natural gas over t!te mid term (3-5 yea:s)n order to pay ba::k
the in'o'ESirnenl and men remiined competa:;ve w'lh ctr.er energy souro;os.

40

clleaper hea; ·ng

•e heard these appliano;os are very effecient. however would need more informa!ion.
~ in1o considera:ion vlhat I

'/e said arove) to find a reason for ti'i:s.

o save en our g.as bill

41

42

colll/enience

43

back-up heat

44

Cog would te inporiant as wT'lhout.tenef there would be no need to re¢a.ce rny eXllSiing stow

45

Cosl effect3ve \lei'S US natural gas.

46

re<il.Joed po tion

47

sa..-e S on heating bills

What should be 1he govem m enf s priority to llel p p eop e reduce the con sumption oi
13.energy? Please choose o:ne only.

-.wa:rrm
1

$$ for R&D o( alternate energy souro;os

2

Pecple s

d ooi reduo;o !he oon

p1ion cf enerQrr

19. Tnank you for your t ime , please feel fre e to include any co

. , . Wii.f:l'"i

ments .

I am not sure i I woold w tally <ilepend en wood! p - as a source of heat I .ve elecbic si ove, even
though my furance is · tural gas. I coukl use pellet fer the hoi vrall!r. k.eep
gas as furance and
~ true electric range_TI erefore. my horne wo
~ a ixt
of eat g sources.

2

irderested · this

3

vrood pelle1 sto'o'ES need better advertisi:lg

4

On question 18 I c!id na answeJ because

5

I

6

We have though! about purchasing a Lmaee, bul in crder to just; y such a large purchase we need to
be CCfl'iJloed that it y,ill payoff 'tlhich reduo;od costs, and it 'llill not become rd to use.

7

As ique source of !tea:. it igh! te fun at the begining but
~ me, after a f!ll Canadian
ehJa.l a good idea
be to use hs wood fuel based appliance
winters, people w'll be siC! cf it. I
in ccrrp'e:i:lg an another exis1ing appliaooe based on :ur gas or eiectrici:y.

ve linti!E<I

~

is not

~

• oo your sul\leyl

regali!fug pellel fu:e l

88

\