In case you missed the announcement late September, the U.S. Department of Energy released new efficiency regulations for residential gas furnaces that will phase out any gas furnace whose efficiency is less than 95% AFUE, affecting about a third of U.S. homes. While most argue on the increased costs of purchasing and installing 95% + AFUE gas furnaces, the U.S. Department of Energy claims it will actually save consumers money while helping to slow down our global warming problem. This regulation is expected to go into affect 2029, giving HVAC companies 5 years to prepare.
What does 95% AFUE mean?
AFUE is the Annual Fuel Utilization Efficiency. In easy way to understand AFUE is to look at the efficiency of your gas furnace. If it is an 80% AFUE furnace, then $0.20 goes out the exhaust flue pipe for every dollar you spend on heating. Only $0.80 of your $1.00 goes towards heating. There are many methods of heating and cooling your home. A majority of the United States of America runs on 80% Efficiency Gas Furnaces measured in AFUE, and Electric Heat Pumps measured in SEER (Seasonal Energy Efficiency Ratio). Within the sales of gas furnaces, about 60% sold are 80% AFUE furnaces while the other 40% are condensing furnaces reaching between 90% and 98% AFUE.
What’s wrong with going Electric?
The goal of this regulation is to convince people to buy a 95% or better AFUE condensing gas furnace, or to switch to an all electric solution. To go electric means to go with an air handler and a heat pump rather than a gas furnace. Much of the southern U.S. already use heat pumps and air handlers to both heat and cool their home. Why is it a problem for everyone else to go electric? Here are a few big reasons outlined below:
- The biggest reason: Climate. In colder states such as PA, NJ, NY, MI, ME, WI, CT, and MA to name a few, heat pumps and air handlers cannot keep up in the winter months. You will need to purchase an air handler with a backup electric heating element to help supplement the heat pump outdoor unit, but that may not be enough on the coldest days.
- The cost of electricity is currently higher than the cost of natural gas or propane gas. A gas furnace can run on both of those fuels. At times, electricity is cheaper. However with growing demands on the electrical grid, I think the cost of electricity will keep rising.
- Most air handlers are 220V while gas furnaces are 120V. In addition to the cost of an HVAC technician, you will need an electrician to get 220V to your mechanical closet. Trane Technologies does offer a solution to this problem with the P-Series Air Handler by Trane & American Standard. The P-Series is one of the only 120V air handlers on the market and it’s affordable. Due to the lack of a backup electric heating element, the P-Series is best suited to the warmer climates of states like California, Texas, Arizona, Nevada, and Florida.
What’s wrong with switching to a 95% AFUE condensing furnace?
- Homes in the south are built differently from homes in the north. A condensing furnace creates condensation, hence the name. You will need PVC pipes (to avoid rust) for the air intake, flue exhaust, and water condensate routed from the furnace to the exterior wall of your home. An 80% furnace is designed with a metal flue pipe that normally exhausts out of a small chimney through the roof. Adding a 90% condensing furnace to a home designed for a warmer climate would be an expensive retrofit because of the PVC piping, demanding a separate contractor for drywall, roofing or siding. It is incredibly difficult for even an HVAC technician to subcontract a roofing/siding company to help with the retrofit because it is considered a small job for them to be worth their time.
- Depending on your existing setup, the cost of upgrading to a condensing furnace is often more expensive than switching to a heat pump and air handler unit due to the labor required in the retrofit.
- The silent killer. An electric heat pump and air handler is safer than a gas furnace. Homes with gas furnaces are strongly recommended to have carbon monoxide alarms that are tested monthly with their batteries replaced annually. Let’s face it, most homeowners are not aware of this or don’t follow this testing schedule with their carbon monoxide alarm, or even their smoke alarm for that matter. In a gas furnace, there are a few components that could crack with age and leak harmful odorless carbon monoxide into your home. According to the CDC, carbon monoxide poisoning kills over 400 people and sends over 1000 people to the hospital each year in the United States.
How will this regulation save us money?
The Biden Administration is betting on this regulation to push the industry forward in innovation. The technology we use to heat and cool our homes has been unchanged for decades. The technology works well and we have not had any real reason to change it until now. I can tell you now that it has worked. A few of the larger HVAC companies are working on developing a hybrid dual fuel system. This is a heat pump and air handler that runs on electric most of the time, and only turns on the gas furnace when the heat pump cannot keep up with the cold. In many universities and organizations, scientists are finding innovative ways to heat homes using piezo kinetics and chemistry to transfer heat without harming the environment.
Back on July 3rd of 2019, the HVAC industry went through a large change with the FER regulation, or Fan Efficiency Rating. This new regulation forced the industry to the use and design of more efficient blower motors. In Q1 of 2025, the industry will be forced to use a Low GWP A2L Refrigerant. GWP is Global Warming Potential. Most HVAC manufacturers are already begun to redesign their systems and assembly lines to use this new refrigerant. These two changes have increased the cost of building these HVAC systems, which means there is a higher investment to you, the homeowner.
On a positive note, the 2019 FER regulation and the 2029 95% Condensing Furnace Regulation will ultimately help you save money through reduced utility costs. As long as you choose to stay in your home long term, the investment in a 95% condensing furnace will pay off.
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