Pellet fires have a few disadvantages - Pellets MUST be stored dry, if they get even slightly wet take them to the landfill, so you need a quality water proof shed or garage to store a winters worth - not a small amount in the South Island. Add another grand to the cost of the install if you have to build a shed to store them. They also need power, so for most people, like a heat pump, if the power goes off so does the heating. The solution - a $100 protable LPG heater for emergency use only, or you could invest in an inverter and battery - another $500 gone. Pellets are currently only made in one plant - if the worst happened there goes your heating for a few months. This should recitfy soon as the patent is due to expire (May have done already) Have you got enough space to loose to a pellet fire - a high wall heat pump uses floor space. Wood fires are great, if you can put up with the hard work and mess and reltive lack of heat control. BUT they, like Pellets, produce a better (IMHO) heat than heat pumps Heat pumps - I cannot understand why anyone would go past these. Cheap, easy to use, reliable if you don't go cheap and nasty. No negatives apart from not working in a power cut, unless you are a particularly OTT greeny. I am installing a heat pump in a week. The house we purchased 15 moths ago has a wood burner, and we will not remove it, but it's just too much work, takes too long to heat up on the cold mornings and when we get home from work, and is not capable of keeping the house at (say) 16degree through the night, BUT it is easily capable of keeping the entire house warm. I believe your choice is really a Pellet fire (storage and some work to lug the pellets around) vs heat pump (reliance on Nat. Grid). Overall, I expect a heat pump will be cheaper capitial cost, and for now, cheaper to run. The ideal solution is heatpump and gas/pellet/wood burner, as we will have, but it is probably a waste of money.