As dealers, suppliers, and members of the hearth industry converged on Reno, Nev., for the annual Hearth, Patio, and Barbecue Expo last week, the mood there was decidedly mixed. Though attendees got a chance to see a wealth of innovative new products that save energy and deliver tons of wow-factor, the industry—like everyone else associated with the real estate market—remains on edge due to the housing downturn.

Nearly 1.9 million hearth products were shipped in 2008, the industry reported Thursday, but that number is down from the 2.37 million units shipped in 2007. Manufacturers at the various booths tried to put a good face on the bad news, avoiding any direct responses to the declining shipments. But they say innovation is still occurring and that a fireplace purchase is still a good idea for those home buyers who want a good supplemental source of heat and want to save money.
“Today’s manufacturers are designing fireplaces, stoves and other heating products with efficiency and environmental impact in mind,” said Jack Goldman, president of the Hearth Patio & Barbecue Association (HPBA) in Arlington, Va. “There are more options than ever to supply homes with warmth and ambiance that not only help cut heating costs, but also provide consumers with renewable fuel options. This year’s [Hearth, Patio, and Barbecue] Expo features the latest products for the hearth of the home.”

Perhaps the lone bright spot for the hearth industry—and one that they are more than willing to discuss—is the sharp increase in demand for pellet-burning appliances and in wood inserts. According to the association, the industry saw a 161% increase in shipments in pellet stoves and insert in 2008. Wood inserts saw an 84% increase.

Late in 2008, the industry released a consumer survey indicating that more people, reacting to the spike in oil prices, were turning to efficient EPA-approved wood stoves, fireplace inserts, and pellet stoves and inserts to heat their homes. Shipments of pellet stoves and inserts for the first six months of 2008 increased by 212% as compared to the same period in 2007, while wood stoves and inserts increased 54% for the same period. The numbers eventually leveled off once oil prices plummeted, but still remained strong for the year.

EPA-approved freestanding wood stoves are inherently more efficient because they perform a slow, controlled burn that generates substantially less smoke than a traditional wood fireplace. These units are also excellent heat sources, able to warm a house as large as 2,000 square feet, depending on the size of the unit and the tightness of the home’s building envelope. A pellet stove or insert accomplishes the same feat using a renewable, clean-burning fuel made from sawdust or other wood waste.

These types of products, the industry says, are exactly what consumers are looking for. According to the HPBA survey, about 70% of buyers upgraded their fireplaces for energy efficiency, and 51% did so to help save on heating costs.

Manufacturers are hoping that this trend toward energy efficiency will support the industry through difficult economic conditions. In particular, the industry will be keeping an eye on the effects of the recently passed stimulus package, which makes stoves and inserts more affordable by providing consumers with a 30% tax credit (up to $1,500) through 2010 for the addition of a 75% efficient biomass-burning stove.

But before homeowners can take advantage of these credits, the kinks will need to be ironed out. “While the new tax credit takes effect immediately, the Internal Revenue Service (IRS) has not issued the guidelines for determining what stoves meet the efficiency requirements to qualify for the credit or how a manufacturer will qualify their products,” according to an HPBA statement released last  week. It added: “Once the IRS guidelines are issued, wood and pellet stove manufacturers will test their stoves and will notify their retailers about their models that qualify.”

Guidelines are expected by April 30, and the credit will apply to all qualifying stoves purchased in 2009.

Nigel Maynard is senior editor, products, at BUILDER magazine.

Learn more about markets featured in this article: Reno, NV.