Consumer Advocates Urge Energy Dept. to Increase Furnace Efficiency Standards

Consumer Advocates Urge Energy Dept. to Increase Furnace Efficiency Standards
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July 14, 2015

Consumer groups are throwing their support behind a proposal to increase the energy efficiency standards of gas furnaces.

The Consumer Federation of America (CFA), National Consumer Law Center, Massachusetts Union of Public Housing Tenants and Texas Ratepayers' Organization to Save Energy estimate that the increase will save U.S. households at least $16 billion and benefit low-income renters who often pay to heat their homes, but have no control over the heating element itself.

The standards proposed by the Department of Energy (DOE) would increase the Annual Fuel Utilization Efficiency (AFUE) for residential furnaces from 80 percent to 92 percent. Consumer advocates estimate even more savings if the standard is increased to 95 percent.

AFUE is the ratio of annual heat output of the furnace compared to the total annual fossil fuel – in this case gas – consumed by the furnace. The DOE explains that an AFUE of 90 percent means that 90 percent of the energy in the fuel becomes heat for the home and the other 10 percent escapes up the chimney and elsewhere.

While an all-electric furnace has an AFUE rating between 95 and 100 percent, the high cost of electricity often makes gas a more economic choice.

Mark Cooper, CFA's research director, said in a written statement that the standards governing natural gas furnaces have been in place for almost 25 years. Overall, consumers will see a savings of $16 billion and a total economy-wide energy savings of $20 million. Bumping the standard to 95 percent would save an additional $5 billion.

Low-income consumers are likely to benefit the most from higher efficiency standards.

"Low-income households are disproportionately renters, not home​owners," Charlie Harak, representing National Consumer Law Center, said in a statement. "In the absence of strong, economically-justified furnace standards, owners will install less-expensive and less-efficient furnaces, burdening tenants with higher bills for decades to come,"

Research also found that the payback period on efficient furnaces would be less than half the life of the appliance and many consumers would enjoy net benefits than bear net costs.

The groups are urging the DOE to adopt a standard as soon as possible but certainly by the spring of 2016, which was agreed upon in a court settlement in 2014.