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Pellet Stove Furnace Pellet stoves can be used as a supplemental heating source or, with proper venting, as a primary heating option. These stoves are available in freestanding models or as fireplace inserts. They can give the appearance of an old-fashioned wood-burning fireplace. The auger moves the pellets out of the hopper into the combustion chamber in the combustion chamber, where they are burned and produce heat. Sensors are able to monitor the flame and adjust the rate of operation in