Are prices starting to break

I guess a lot depends on how you define "huge".
You can only go so low on a ton of product at the plant.
These plants have tremendous startup costs, and then fixed operating costs.
And very few of them go down..
I'd be willing to bet BBS don't get more than 10-15% less than a 3,000/T dealer.
In all fairness, I do not know what the BBS pay. But I'll bet I am not far off.
This season is very different. Cash flow is important, so there may be some deals.
Some places are just barely staying alive.
I will agree. But "huge".. I just don't see it, AND still making a profit.

Dan

 

Pellet mills can't sell under their cost of production very long. You may see it this year for inventory already sitting on the ground, but traditionally pellet mills don't make large amounts of money. it is only in the last 2 years with the price increases they have enjoyed more than a minimal profit. last year pellet mills didn't have to discount much to sell their production. Buyers were standing line. So, I don't think last year the BBS bought more than $10 per ton cheaper, if that.

 

Do you have excess capacity available? Are you able to sell excess power back into the grid? I would imagine that on the coldest (like Feb 15th) and hottest of days you could dedicate some power to sell back as it could even be profitable.. That is if the costs of shutting down and starting up the operation are not prohibitively high and if you generate enough to be a player in the electricity market.
ISO New England - Real-Time Maps and Charts
th..

 

except you sell the electricity back to the utility at the rate THEY buy it or produce it for, not the rate you pay for it.

 

GT retail prices were climbing last winter from the pellet house as well. so i suspect the price increase is coming from the mill itself. GT's in may 2014 were $269 retail and $305 in november. $320 by spring. i don't know what the pricing was from Lowes for that period, however

 

Depends on what kind of relationship one maintains with the ISO. There are power plants that fire up specifically to meet the demand of the grid. If one has a reliable enough plant and could produce say 10MW, it is possible to operate as a "peaking" or "peaker" plant and only sell into the market when demand and prices are the highest (similar to how some utilities pay large users to shut down during the same periods).. This is different than selling back to the grid as occurs in grid tied solar in which the utility buys the power at the time of purchase that is set by the sun and an individual homeowner's use at the time. One possible limitation is in the capacity of the lines to carry that supplemental power to the grid. That infrastructure would be prohibitively expensive to install for perhaps a couple dozen days a year when the peaker plant is required... If any of the above is incorrect, please let me know...

 

I believe you are correct so that's why Lowe's has to charge more for them than all the other brands they carry .

 

I agree that Green Teams may be higher than most from the mill. They are just about the most expensive pellet at the pellet house near me. And that includes some very nice pellets he stocks.

 

Yeah,,, its a joke. I looked into it when we went through a mill expansion project 15 years ago. Our genset was sized for triple of what we were starting up with and we had excess power.Even knocking out 3 power bills from 2 houses and my shop it didn't make cents.
Hookup and startup costs were out of this world. I think payback was less than 1 cent per KWH IIRC.

 

I used 4 ton GT from Lowes as my bulk buy during my first year burning-2009. They were priced right back then and did me well. That year I was also schooled at the old homestead on softwood pellets and that was where my direction went from there on for the main heating season.

During the 2010 season, I picked up some GT for the shoulder season and they still had decent heat, but they left a sticky residue that was a bear to clean off. Another friend with an XXV had the same issue that year. I haven't used them since, there are just too many other options with better or equal price points and better consistency.

 

Stopped at Lowes today. They will do a free local delivery with 2 or more tones. I picked up 10 bags of inferno gold to try.
I tried to buy two tons for the free delivery, but they can't deliver here because of the wt. of the truck and my road being posted.

 

That's a bummer

 

My local Big Y has been selling those Inferno Gold, I think the price is like $5.98/bag
Are they burning any good now? lol

 

I would say yes , because someone else is bagging for them , have been getting OK reviews here .

 

Try them....I liked them. Word on the street is that they are likely Corinth. Burned a ton of Corinth blend (80%soft) last year and liked them a lot.

Friend of mine picked up 25 bags of Inferno Gold and liked them better than FSU.

 

Scored these today from Lowe's $ 3.99 / bag

Just keep buying , I won't see these kind'a deals ever again .

 

First Steve and now Will, you holding out on us? Haven't see those yet in any of the Lowes I've visited.

 

A little birdy tipped him off. . Well a big birdy did....lol

 

YES you did and now it's Smoothie Time