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New 90-percent efficient furnace standard is blocked

A new U.S. Department of Energy (DOE) efficiency standard for residential gas furnaces that was to have taken effect May 1, 2013 has been withdrawn by the DOE following a settlement reached between DOE and the American Public Gas Association (APGA).

The settlement, pending acceptance by the U.S. Court of Appeals, resolves that the new standard, which would have required new furnaces installed on May 1 and thereafter in Minnesota and 29 other northern states to have at least a 90-percent annual fuel utilization efficiency (AFUE) rating, will not take effect. The current furnace standard is 80 percent and remains in effect until a new standard can be negotiated through a notice-and-comment rulemaking process.

APGA challenged the standard because it felt the standard would have “had the effect of eliminating non-condensing gas furnaces from the northern region of the country and driven consumers to less-efficient electric furnaces.”

Another perspective on DOE’s withdrawal of the standard comes from the American Council for an Energy Efficient Economy (ACEEE), which argues that with increasing evidence of global warming, now is a poor time go backwards on improving home heating energy efficiency.  ACEEE notes that the new furnace efficiency standards had already been based on a compromise struck between efficiency supporters and furnace manufacturers, including allowing for exemptions in cases where a consumer might face extraordinary costs to install a 90-percent compared to an 80-percent efficient unit.

Minnesota has been proactive in advocating for high-efficient furnaces. Most new homes in Minnesota since 2000 have installed high-efficiency furnaces, and builders in Minnesota are experienced at installing high-efficiency furnaces in a safe, cost-effective manner.

The Division of Energy Resources (DER) encourages consumers to buy energy-efficient products with the ENERGY STAR® label. High-efficient furnaces are clearly a win for consumers, because of energy savings and safety issues (high-efficiency sealed combustion furnaces are safer than old conventional combustion furnaces), and a win for the environment in terms of reduced greenhouse gas emissions.

In addition, there are several incentives to purchasing a high-efficiency furnace. Many gas utilities offer residential energy efficiency rebates (up to $400) for new high-efficiency furnaces, and there is a $150 federal residential energy efficiency tax credit that can be applied to 95 percent AFUE furnaces. Also, there are low-interest loans available to help finance the cost of energy efficient home improvements, including high-efficiency furnaces. For a comprehensive list of incentives, visit the Database of Incentives for Energy Efficiency & Renewables at the DSIRE website.