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Electric: Electric sauna heaters are by far the most common, and this is because they are also the most practical. There is no need for a chimney or fuel, and you usually have a timer that allows you to heat the sauna before getting in.
Wood-fired: There are sauna enthusiasts who argue that nothing beats a wood-fired sauna. This is partly because the heat is more pleasant, but also because it is nice to experience the actual fire. But a wood-fired sauna means that you have to provide the sauna house with a chimney, and that you always need to have wood available.
The size of the sauna determines what capacity your sauna heater needs to have. If you use a unit with too high a capacity, you may have problems with overheating. On the other hand, a heater with insufficient capacity can prevent you from reaching the desired heat or humidity.
A small sauna with a volume of up to 2 cubic metres should have a heater with an output of 2.2 kW. A sauna with a volume of 6-7 cubic metres works well with a 6 kW heater. A large sauna with a volume of 16-20 cubic metres requires a heater of around 16 kW.
A sauna without heat protection around the heater is not a good idea. If you slip and fall over the heater, you can incur very severe burns. You can often see a kind of fence mounted around a sauna heater, and they are available to buy as ready-to-assemble. For fire safety reasons, it is also important to install a protective plate between the sauna heater and the wall.
Read this Harvard article about potential health benefits of saunas.