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Pellet Stoves Vs Wood Stoves Pellet stoves generate heat by burning corn, wood pellets, or a mixture of both. A motor-driven auger loads the pellets into a combustion chamber where they are ignited and heated. The majority of models have thermostatic controls that keep the fire at the desired temperature. produce very little ash and release very low levels of air particulates. Cost In comparison to wood stoves, pellet stoves tend to be less expensive.