Should the Energy Department Tell You What Kind of Furnace to Buy?

For now, the feds have backed off rules requiring home owners to buy high-efficiency furnaces that save you money on energy, but cost more up front.

To curb energy usage, the U.S. Department of Energy wants to mandate your furnace choices.

But the American Public Gas Association sued and got the DOE to back away from rules that would have forced home owners in 29 northern states, as of May 2013, to choose highly efficient HVAC systems if they replace their current furnace.  

APGA said the cost to install high-efficiency furnaces would drive low-income home owners to swap their gas furnaces for electric or kerosene space heaters. (On the bright side, the rules didn’t apply to boiler and hot water systems or heating oil.)

The rules will be remanded to a commenting process, so they’re likely to return in some form later.

What Do You Need to Know?

DOE pushed the new requirements because they have the potential to cut the country’s residential energy use by 20% between 2013 and 2045. Plus, a highly efficient furnace can save an average home owner an estimated $100 a year in energy costs.

But all that efficiency comes with a higher upfront price tag.

The 90% efficient units DOE wants Northerners to install require special vents — one to bring fresh air to the furnace and another to vent flue gases outside.

Tom O’Grady, a spokesperson for the National Association of the Remodeling industry, estimates he spent about $1,000 on new vents when he installed a highly efficient furnace in his own home in 2009.

How much you pay for the new vents depends on how far it is from your furnace to the outdoors and what kind of home exterior you have.

“It’s always more of a problem cutting stone walls for the venting and in homes built in the 1920s through the 1960s because you’re cutting through the historic fabric of the home,” says O’Grady. “But it saves money on the back side on your utility and natural gas bills.”

Other Ways the Furnace Rules Could Cost You

If you live in attached housing: You might have to vent through a chimney rather than a wall, which would require you install a liner to protect the chimney from acidic flue exhaust and a blower to push the exhaust outdoors.

You’ll also need a new drain pipe to carry exhaust liquids into the sewer system. That can be an issue if you have a concrete basement floor and want to install your highly efficient furnace down there.

If your furnace sits in an unheated garage: The new furnace vents work best if they travel through heated rooms. So plan to shell out for new ductwork to install your efficient furnace inside the house, says Steve Porter of the Heating, Air-conditioning and Refrigeration Distributors International, a trade group for HVAC equipment wholesalers.

And if your furnace is in autility room or in the middle of your house’s footprint, you’ll need to accommodate the venting, which means potentially moving the furnace.

If you live in a condo: Some condos have bylaws that prohibit punching through to outside walls, The Bergen Record reports.

As the costs add up, you may be thinking, “Gee, I’ll need to get a home equity line to pay for my next furnace.” Good luck with that in today’s tight mortgage lending market.

“I don’t think the average consumer has $5,000 to $8,000 in the bank set aside to replace their furnace,” Porter says. “No one thinks about the furnace until it quits working.”

The furnace rule was just the start of DOE’s reach into home owners’ wallets. In 2015, DOE had planned to raise efficiency standards for air conditioners in the South, and heat pump and oil furnace standards nationally.

The Bottom Line

At some point, DOE is going to finalize some form of furnace and AC efficiency rules. If your furnace is old and you don’t want to pay thousands for new vents, now might be a good time to look into a replacement unit.

Even if your furnace is running fine, start saving for a new one.

To make sure you’re getting the right HVAC product for your state, federal Energy Guide Labels like this one will tell you where it’s appropriate to install the system.