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Opening delivery: The future for furnaces

September 14, 2015 By    

Brian RichessonIndustry fears proposed efficiency rules could damage propane use.

Increased energy-efficiency standards for water heaters that went into effect in April could give propane an edge over its electric counterpart.

Those within the water heater industry say the U.S. Department of Energy (DOE) standards will ultimately raise both the cost and physical size of gas and electric appliances and potentially lead consumers to tankless propane models when it’s time to replace them.

At what frequency that happens remains to be seen. But while the propane industry enjoys a regulatory victory on the water heater side, another DOE regulation under consideration – this time for furnaces – could strike a blow to LP gas marketers.

A new proposed rulemaking by DOE issued earlier this year would raise the national minimum efficiency standards for non-weatherized (indoor) residential and mobile home gas furnaces to 92 percent AFUE. That’s an acronym for annual fuel utilization efficiency, and it’s an efficiency descriptor DOE uses for furnaces. So 92 percent AFUE translates to 92 units of heat output for every 100 units of energy input.

As a result of a previous DOE action, the current national standard that was enacted in 1987 and made effective in 1992 (78 AFUE for non-weatherized units and 75 for mobile home units) is moving to 80 in November. That’s not a big deal because nearly all furnaces on the market today meet that standard level. Whether the standard moves to the high-efficiency mark of 92 AFUE is a point of contention for many.

On the chopping block?

The U.S. Energy Information Administration (EIA) followed DOE’s proposed rulemaking with a report headlined “Proposed efficiency standard may eliminate noncondensing gas furnaces.”

Noncondensing furnaces are common in the United States, with about 2,500 commercially available gas models, according to EIA. The agency says condensing furnaces 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. Furnaces with efficiency ratings of at least 92 AFUE make up about 42 percent of commercially available models.

The biggest difference between noncondensing and condensing units involves the venting configuration. A noncondensing or standard efficiency furnace vents vertically through the roof or chimney, while a condensing furnace uses a second heat exchanger and it cannot be connected to the existing vent. Condensing furnaces capture waste heat from flue gases, using that heat to warm the home instead of sending it up the chimney.

DOE’s proposed rule would raise the efficiency standards high enough where only condensing furnaces are installed in homes. And that’s the rub.

“If you were in a replacement situation and the only ones you can replace it with are high efficiency, what that means as a homeowner is you will have to change the venting configuration of your furnace,” explains Mike Caldarera, vice president of regulatory and technical services for the National Propane Gas Association (NPGA). “In doing that, now you run into additional cost. You can’t just do a simple replacement – one to the other.”

The American Gas Association (AGA) says condensing furnaces, on average, cost about $350 more than noncondensing furnaces, with an additional $1,500 to $2,200 for installation costs. Changing furnaces may also require modifications to the venting system of the existing water heater in the home.

If consumers face significant cost increases when it’s time to replace their heating systems, would they consider switching fuels and perhaps choose an electric furnace or heat pump, especially in the South where temperatures are more moderate? And if consumers move away from their propane-fueled furnace, would they take it a step further and decide they don’t need their propane storage tank at all?

These are NPGA’s concerns and the basis for comments it submitted to DOE during a comment period that ended in July. DOE is underestimating the negative environmental and financial implications to the propane industry, NPGA argues. AGA expresses some of the same concerns in its argument against the proposal.

According to the Appliance Standards Awareness Project, DOE must complete final furnace standards by April 2016, with the compliance date coming five years after publication of the final rule.

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

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