US Department of Energy backs down on Furnace Efficiency Standards

Until recently, the US Department of Energy (DOE) was planning to raise the minimum efficiency rating of natural gas furnaces from 80% to 90% in the 30 northernmost states (the other states are set to have increase in air conditioner efficiencies mandated). This would increase the cost of furnace installations substantially. However, the DOE argued that the energy savings make these furnaces a good investment for most homeowners.

But resistance built up from utility companies (led by APGA, the American Public Gas Association) and heating contractors (led by ACCA, the Air Conditioning Contractors of America). This is because 90%+ efficient furnaces require new venting and drainage, which can be very difficult and expensive to install in some homes (notably row houses). The contractors argued that higher installation costs would cause many homeowners to delay replacing their older systems and the gas companies argued that it would force many consumers to switch to electric furnaces (which due to the inefficiencies involved in converting coal or gas into electricity and then distributing it; are less environment friendly than gas systems in many areas).

Read more about Advantages and Disadvantages of Natural Gas Energy.

The Energy Policy and Conservation Act states that such an efficiency standard requires the approval of “a representative group of relevant interests.” The APGA filed a petition with the US Court of Appeals, arguing that the DOE had only obtained approval from manufacturing and energy efficiency groups and not from other relevant interests such as contracting and utility groups.

While the drawback may prevent financial hardship for some homeowners, it also makes the US a relative laggard in terms of efficiency standards. The lack of a new higher standard coupled with low natural gas prices means American homeowners will probably still be installing heating systems in 2020, that are fundamentally similar to the systems used in 1990.

Energy efficiency groups were understandably disappointed with the decision. The new standards were expected to reduce greenhouse gas emissions by 81-130 million tons over the next 30 years; and also save homeowners $10.7 billion on energy. However, some groups remain hopeful that new and even stronger efficiency standards will be implemented. These standards will likely include exceptions for homes with lower heating costs and when new systems are especially difficult to install. Unfortunately with the DOE indicating that it will go through a more thorough consultation with involved parties to avoid another legal challenge, new standards are unlikely before 2020.

This article is written by Andrew Lake.