Biomass heating systems can be used for space heating in buildings, hot water and production, or any combination of these. The most relevant source of biomass heat for the accommodation sector is wood, and the most efficient conversion pathway is through direct combustion, which can mean burning wood chips or pellets in boilers, or larger pieces in gasifying wood boilers.

Pellet boilers are highly automated and well suited to meeting variable load demands. They typically achieve efficiencies of 85-90 %. Pollutant emissions are lower than for other types of wood boilers owing to precise automated systems and homogenous pellet composition. Indeed, pellet boilers are state-of-the-art for solid biomass combustion alongside gasifying boilers.

Wood chip boilers work on the same principle as pellet boilers, with automated control of chip feed supply. Whilst boiler operation is similar to pellet boilers, the average heating value and homogeneity of wood chips are lower than for pellets, resulting in more variable performance and slightly lower efficiency. Wood chip boilers usually incorporate a fuel stoking system whilst pellet boilers use a simpler pellet metering system and are better suited to larger applications and facilities.

Wood chips are often cheaper than pellets in terms of expected energy output because they require less processing.