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Proposed Efficiency Standard May Eliminate Noncondensing Gas Furnaces

Following a court challenge that caused a previous proposal to be sent back for further analysis, the U.S. Department of Energy (DOE) has issued a new proposed rulemaking to increase the minimum efficiency standards for gas furnaces, which are mostly fueled by natural gas but also include propane furnaces. Gas furnaces are one of the largest energy consumers in the residential sector, accounting for about one-fifth of the energy delivered to homes and apartments in the United States. The proposed standard would increase the minimum efficiency standard for these furnaces for the first time since 1992.

As discussed in a previous Today in Energy article, gas furnaces were one of the first products covered by federal appliance standards. The first standard, enacted by Congress in 1987 and made effective starting in 1992, established the minimum efficiency level of furnaces at 78 annual fuel utilization efficiency (AFUE), meaning 78 units of heat output for every 100 units of energy input.

Several earlier proposals to increase the minimum efficiency of furnaces met with opposition—first, for not being stringent enough, and later, for being too stringent. The most recent of these previous proposals would have established a regional standard of 90 AFUE in colder climates and 80 AFUE in warmer climates. Similar regional standards for other equipment such as heat pumps and air conditioners recently took effect, but the furnace rule was challenged by natural gas utilities. In April 2014, the U.S. Court of Appeals voided the standard and insisted that DOE reevaluate the rule.

Now, after additional analysis, DOE has proposed a higher minimum efficiency level of 92 AFUE. Further, this standard would be applied nationally rather than regionally. By law, DOE must arrive at the highest efficiency level that is both technologically feasible and economically justified.

Going from a minimum efficiency level of 78 to 92 AFUE would eliminate noncondensing gas furnaces from the marketplace. Condensing furnaces are able to obtain higher efficiencies by reusing some of the heat that would be vented out of the home through the chimney by a noncondensing furnace. Because of the changes in the way a condensing furnace exhausts, installing a condensing furnace can require additional installation or equipment switching costs. DOE's reevaluation of the proposed standard includes more extensive analysis on equipment installation and switching costs.

Based on data provided by equipment manufacturers, condensing furnaces (at least 90 AFUE) made up about half of all gas furnace shipments nationally and about two-thirds of shipments in the northern part of the country in 2009, the most recent year for which data were provided. Furnaces with efficiency ratings of at least 92 AFUE currently make up about 42% of the commercially available models listed in DOE's Compliance Certification database.

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