The goal of the article is to analyze the cost of fuel for a small-capacity woodchip boiler house as well as operation of a condenser and assess the decrease in cost if a flue gas condenser is installed. The article examines the cost chain of fuel: the price of the fuel itself, the hourly rate depending on capacity and specific cost per unit of produced energy. The object of study is the Ludza (Latvia) district heating system heat source – a boiler house with an 8 MW woodchip boiler fitted with a direct contact condenser. An analysis of the specific costs of the flue gas condenser shows that the condenser has a capacity threshold above which a savings of financial resources can be observed. As the capacity falls below the threshold, the condenser operates at a loss and its operation costs are greater than its income, which are determined by the woodchip savings. The analysis shows that during the nine months of the 2012-2013 heating season the condenser operated with an economic effect and also without this effect. The total assessment is provided by a cost-benefit balance assessment, which determines the specific pure gains obtained during the studied time period. Condenser disconnection in the case of low capacity is examined.