A wood-burning fireplace insert is a metal box that fits inside your existing masonry fireplace opening. A decorative flange fits around the outside edges so that no gaps appear between the unit and the sides of the fireplace. A new metal chimney liner is required to carry combustion gases and smoke up through your chimney.

Fireplace inserts have clear heat-proof glass doors. The best designs circulate air within the firebox in a way that helps keep the glass clean.

Wood-burning fireplace inserts heat 1,000 to 3,000 square feet, depending on their size. Talk to your insert dealer about the size of your existing fireplace and what heating capacity you can expect from an insert.

Inserts cost $3,000 to $4,000, including installation and a chimney liner.

High marks for energy efficiency

An enclosed firebox ensures the highly efficient combustion of wood, helping you extract the most heat for the least cost. Most wood-burning fireplace inserts include a fan to help circulate room air around the firebox and release it back into the room.

A wood-burning fireplace insert helps cut heating costs by 10% to 40%. That’s a savings of $64 to $255 a year for the average homeowner. Though fuel prices can fluctuate wildly, savings could be even greater if you rely on pricier electricity or fuel oil for heating, rather than natural gas or propane.

Improvements in the designs of wood-burning fireplace inserts over the past five years mean almost all new units now meet the guidelines for fuel efficiency set by U.S. Environmental Protection Agency of 60% to 80%.

Advantages of a fireplace insert

  • An insert designed to heat 1,500 square feet will burn for three to five hours before you need to reload—a lot less hassle than tending an open fireplace.
  • Firewood is an economical fuel in many regions, costing just $922 per year to heat a typical home when the wood is burned efficiently. If you cut the wood yourself, it might even be free. If you buy, you support local jobs.
  • Efficient combustion reduces the amount of noxious gases and particulates produced by an open fireplace.

Disadvantages of a fireplace insert

  • You’ll still need to stack and load firewood and empty ashes periodically.
  • The fire is behind glass doors rather than exposed.
  • Fitting an insert into an existing fireplace opening can be tricky. In some instances, the insert may protrude beyond the fireplace surround, and you’ll have to add trim to make up the difference.
  • The payback period on your investment may be 15 years or longer.

Tax credits for wood-burning fireplace inserts

There’s a federal tax credit available until the end of 2011 for fireplace inserts that burn wood, pellets or other biomass fuels, and are at least 75% efficient. The tax credit is good for up to $300, including installation costs.

The federal tax credit expires at the end of 2011. After that, certain states may provide tax credits for various types of energy-efficiency improvements, including fireplaces.