This chapter focuses on wood pellets as a renewable, environmentally friendly, and locally available energy source that has a potential to replace fossil fuels, especially coal, in space and water heating in Poland’s rural areas. The use of wood pellets results in substantial reduction of GHG emissions and particulate matter, while generating a smaller amount of ash that can be used as fertilizer, decreasing landfill load. The latest 2023 edition of the “Clean Air” program provides subsidies and low-cost loans for energy-efficiency improvements of single-family homes to replace inefficient heating systems with biomass-fed systems that meet the newest regulations. The program could help the domestic wood pellet industry by expanding demand for wood pellets. The surveyed wood pellet manufacturers have been focused on residential customers and offer certified, high-quality pellets at a variety of prices matched by a wide range of automated pellet furnaces and boilers. Two cases of residential wood pellet users illustrate the suitability of pellets as a heating source—proving their convenience, ease, and cost-competitiveness. The adoption of the EU policy on zero-emission requirements for homes will effectively prohibit the installation of wood pellet furnaces and constrain the size of the future use of wood pellets in Poland.