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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 can be purchased as freestanding units or fireplace inserts that can give your home the appearance of a traditional wood-burning fireplace. The auger transports pellets from the hopper into the combustion chamber which is where they burn and produce heat. Sensors monitor the fire and can adjust its rate of operation to maintain the desired temper