Pellet boilers are designed to be a central part of a normal hot water system, using the same plumbing and controls. They are able to heat an entire home or small commercial building, and unlike conventional wood burning stoves can be controlled by an ordinary thermostat and turned on and off at the touch of a button.

The boilers use pellets made from by-products of sawmills and wood processing plants. The sawdust and wood chips are compressed and reduced to a pulp before being shaped into cylinders. The pellets are very dense and therefore require less storage space than logs or wood chips. No chemical substances are used in the production of the pellets and by using waste wood no extra trees are felled.

Most units use an automatic hopper-feed system which is controlled by a timer. A full hopper will usually hold enough pellets to last about half a week in winter, and the ashtray only needs empty once every two weeks.

Pellet boilers are carbon neutral as the carbon dioxide they produce is offset by that absorbed in during the growth of the trees used to produce them.