Emission and electricity consumption are important aspects of a pellet heating system. Low noxious emissions, particularly carbon monoxide, are a measure of a well-performing system. High carbon monoxide emissions are often caused by unnecessary cycling of the burner, poor adjustment of the combustion air and insufficient maintenance. The carbon monoxide output, the thermal performance and the electricity consumption for modulating and non-modulating operation mode have been investigated by simulations of four stoves/boilers as part of combined solar and pellet heating systems. The systems have been modelled with the simulation programme TRNSYS and simulated with the boundary conditions for space heating demand, hot water load and climate data as used in earlier research projects. The results from the simulations show that operating the pellet units with modulating combustion power reduces the number of starts and stops but does not necessarily reduce the carbon monoxide output. Whether the carbon monoxide output can be reduced or not depends very strongly on the reduction of starts and stops and how much the carbon monoxide emissions increase with decreased combustion power, which are in turn dependent on the particular settings of each pellet burner and how the heat is transferred to the building. However, for most systems the modulating operation mode has a positive impact on carbon monoxide emissions. Considering the total auxiliary energy demand, including the electricity demand of the pellet units. the modulating combustion control is advantageous for systems I and 4 for the used boundary conditions. The study also shows that an appropriate sizing of the stove or boiler has a huge potential for energy saving and carbon monoxide emission reduction. Copyright (c) 2006 John Wiley & Sons, Ltd.