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Pellet Stove Furnace Pellet stoves can be used as a secondary heat source or, with proper venting, as a primary heating option. They are available in freestanding units as well as fireplace inserts that give your home the look of an old-fashioned wood-burning fireplace. The auger moves pellets from the hopper to the combustion chamber which is where they burn and produce heat. Sensors are able to monitor the flame and adjust the speed of operation in order to maintain the desired room temperatu