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Pellet Stove Furnace Pellet stoves can be used as a supplemental heat source or, if you have proper venting, as a primary heating option. They are available as freestanding units or fireplace inserts that give your home the look of traditional wood-burning fireplaces. The auger moves the pellets from the hopper into the combustion chamber, where they are burnt and generate heat. Sensors detect the fire and alter the rate of operation to ensure your desired room temperature. 1. Energy Effic