An outdoor wood stove is a stove kept out of home and provides heat through a boiler system instead of direct heat from an indoor wood stove. They are efficient and effective, as one may prefer to heat the homes with wood and without the inconveniences of more common propane, natural gas or electric alternatives. Following are the disadvantages of outdoor wood furnaces:

They are generally expensive to install. Yet they can be fitted with existing oil or gas powered forced air systems, the stove and the water circulation system by itself will usually be much more expensive than traditional wood burning systems.

The outdoor wood furnace needs electricity to run the water-circulation pumps and fans, thus they do not provide the same insurance against power outages than a normal wood stove does.

The biggest problem with Outdoor Wood Furnaces, is increased smoke. They operate colder than the other wood stoves, because the water surrounding the fire box reduces the burn temperatures. Low combustion temperature causes incomplete combustion and thus low efficiency. Modern wood burning stoves are around 70-80% efficient, but outdoor furnaces are only about 50% efficient. Low efficiency results in increased levels of particulate matter and volatile organic compounds in the smoke released from the stoves. These make the smoke more "smoky": dark in color and smelly.

Traditional indoor wood stoves are regulated by the EPA, but the outdoor ones are exempted from those regulations.

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