A price for wood pellets in the UK is quoted in more than one way: pounds per tonne for a bulk delivery, pounds per bag for a smaller load, and neither figure means much on its own until it is converted to pence per kWh, the same unit used for gas, oil and electricity. That conversion is what lets you compare a pellet quote against what you currently pay for heating oil or mains gas.

Bagged against bulk

Bagged pellets arrive in small bags stacked on a pallet, while bulk pellets are blown directly into a purpose-built store through a delivery pipe. The difference in packaging, handling and delivery flexibility shows up as a higher price per tonne for bagged fuel, even though the pellets themselves may be the same grade. Bulk delivery only brings the unit cost down if the house has enough dry, accessible storage to take a full load in one visit; where it does not, bagged pellets stay the only practical option, at a proportionately higher rate. What a pellet store needs to hold, and keep dry, is covered on Pellets: Quality, Storage and Delivery.

What a genuine price comparison needs to state

• Whether the figure is per tonne, per bag, or already converted to pence per kWh
• Whether it is a bagged price or a bulk price, since the two are not interchangeable
• Whether it refers to ENplus-certified pellets (the wood pellet quality certification standard), since certified fuel and uncertified fuel are not the same product at the same price point
• The date the price was quoted, since pellet prices move with the wider fuel market

A quote missing any of these is not comparable to another quote, whatever the headline number suggests.

Why the comparison against six months earlier matters

Pellet prices move with the wider energy market, including gas and electricity costs and demand from the autumn stocking season across Europe, so a single price reading tells you less than the same price set against where it stood earlier in the year. Direction matters more than any one figure, because a quote from a single supplier can sit above or below the wider market average for reasons that have nothing to do with the underlying trend. Treat any one quote as a data point.

Once you have a current pence-per-kWh figure for your own address, the working that turns it into an annual spend, alongside your heat demand and appliance efficiency, is set out on the running cost calculator. It produces a range, and it cannot account for a specific supplier's delivery charge or minimum order quantity, so it is a starting point for your own figures.

A wood pellet is compressed sawdust and wood shavings, dried and pressed under high pressure until it holds its shape without glue. The raw material is a sawmill by-product, so the price of pellets tracks the sawmill industry. When construction and joinery are busy, sawdust is abundant and cheap; when timber production slows, the raw material tightens and pellet mills pay more for it.

What decides the raw material and production cost

Turning damp sawdust into a dry, dense pellet takes energy, mostly for the drying stage, so a pellet mill's own gas and electricity bill feeds into what it charges. When wholesale gas and electricity prices move, pellet production costs tend to follow with a lag of a few months. Supply is also shared with buyers outside the domestic heating market: large-scale biomass power stations and continental European buyers compete for the same pellet volumes, and when those buyers are ordering heavily, less material is left for UK bagged and bulk domestic supply.

Why demand shifts through the year

Demand for pellets is seasonal, because a pellet stove or boiler is usually the only heating source in the house, so households and bulk buyers both tend to order ahead of the heating season. A cold snap arriving early in the season can tighten supply for late orders and push spot prices up for anyone buying at short notice. Ordering outside the coldest months generally finds calmer pricing and shorter lead times, though that is a pattern rather than a guarantee for any given year.

How pellet prices sit against oil and electricity

Most pellet buyers are off the mains gas grid, so the fuel they are actually weighing pellets against is heating oil (kerosene). Heating oil price is linked to global crude oil markets and to the sterling exchange rate, both of which move for reasons that have nothing to do with wood fuel, so the gap between pellet and oil running costs can widen or narrow from one heating season to the next. Electricity price matters for a different comparison: anyone weighing biomass against a heat pump needs the pence-per-kWh figure for electricity at the time they are deciding, not a figure from a previous year, because that comparison changes whenever the Ofgem price cap or wholesale electricity prices move.

None of this tells you what a tonne of pellets costs you this summer, only why the number moves. The current bagged and bulk prices, and how they compare with six months ago, are set out separately on this page. To see how a given pellet price translates into an annual fuel bill for your own house, run the figures through the running cost calculator, and if you are still deciding between biomass and a heat pump, the heat pump comparison sets out the same arithmetic for both fuels side by side. For what a pellet system actually costs to keep running once it is installed, including servicing, see running costs and maintenance.