New Furnace & AC Efficiency Standards: What to Anticipate

Last updated on by

There are two general methods by which governments can reduce greenhouse gas emissions: by putting a price on carbon (via a carbon tax or cap-and-trade), or by mandating higher efficiency standards. With cap-and-trade legislation deadlocked in Congress, the federal government has been moving to reduce personal GHG’s through higher efficiency standards.

The best known of these is the NHTSA’s CAFE (Corporate Average Fuel Economy) regulations, which require manufacturers to produce more fuel efficient vehicles. The arguments for and against CAFE have received a lot of attention. On the one hand, it promises to reduce pollution and save motorists money on gas. On the other, it may increase the cost of new vehicles.

Unlike with CAFE, the Department of Energy’s upcoming increase in furnace and air conditioner efficiency standards has received little media attention.The potential environmental benefits from this upgrade are significant, as heating & cooling is the second largest source of personal greenhouse gas emissions (behind transportation) and the average furnace produces more ghg’s than the average car (in northern states, at least). But for some home and business owners the new systems could potentially cost a few hundred dollars more to install.

The new standards call for all furnaces installed after May 1, 2013 in Northern States (which include Alaska, Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming) to be at least 90% efficient (up from the current 80%). Starting January 1st, 2015 all air conditioners sold in Southern States (all states not in the previous list) must be at least 14 SEER, up from the current 13 SEER standard.

Some clear advantages of these upgraded standards, via the ASE:

  • The monetary savings amount to an average of about $100 per U.S. household, per year.
  • Between now and 2030, the agreement will save 3.7 quadrillion Btu of energy, or enough to meet the energy needs of the Commonwealth of Virginia or the states of Georgia, Massachusetts, Michigan, Missouri, or North Carolina for a year
  • The agreement sets new construction/major renovation standards for each region that states may incorporate into their building codes.
Obviously for new construction, the above standards are a no brainer as the changes required will be embedded in the building code. The problem comes in when existing or older buildings want to upgrade.

14 SEER air conditioners have similar installation requirements to 13 SEER systems, and are not expected to cost much more. However, 90% efficient furnaces are more difficult to install than 80% models. They extract so much heat from the exhaust gasses that the water condenses, which requires the exhaust to be vented out the side of the building using plastic pipes, instead of the tin chimneys currently present in most buildings. A drain line must also be run to dispose of excess moisture. The installation can be much easier in some buildings than others.

As Charlie McCrudden, head of government relations for the Air Conditioning Contractors of America, recently remarked in Contracting Business magazine: “the blanket requirement for condensing furnaces in the North region will result in some prohibitively expensive installations when the contractor has to address the venting and condensate issues, along with remodeling the installation location.”

In some cases a 90%+ furnace could cost $1000 more to install than an 80% model would. In other cases, where remodelling around the installation is required, the installation could costs thousands more.

Since natural gas prices are at a 10-year low, high efficiency furnaces are often not an attractive investment for old building owners. In these tough economic times, contractors are finding only a limited number of building owners are willing to make large investments for environmental reasons. Without the upcoming rise in standards, the 80% efficient furnace would likely remain the choice for most homeowners.

In my opinion, the DOE should have instead imposed a tax of $300-$500 on all 80% efficient furnace installations. This would reduce the cost difference between an 80% and 90%+ installation to a point where most homeowners would make the jump. However, in homes where a 90%+ furnace is excessively difficult to install, an 80% efficient model could still be used.

As with any major energy efficiency upgrades to older facilities, owners will see an upfront cost. The key is that after the initial hiccup, there is potential for lifelong savings and better performance with newer units, there is marked improvement in real estate value and longterm value addition. The most important thing is educating owners with potential costs so they are better prepared in their decision making.

Jack Gregson is a heating & air conditioning technician for Good Guys Heating, Cooling & Plumbing. He installs energy efficient heating systems such as heat pumps and tankless water heaters, and also maintains older systems to keep them running as efficiently as possible. In his spare time, he enjoys staying informed on issues affecting the HVAC industry, energy conservation, and the environment.


Ecopreneurist ®
Is a trading style of
B2B Quote Services LTD
Creedwell House
32 Creedwell Orchard