Home Industry News Biden Administration Proposes New Cost-Saving Energy Efficiency Standards for Home Furnaces

Biden Administration Proposes New Cost-Saving Energy Efficiency Standards for Home Furnaces

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DOE’s Proposed Rule for Gas Furnaces Will Save Consumers Billions on Annual Energy Bills, Reduce Emissions and Build on Actions to Support Heat Pump Deployment 

WASHINGTON, D.C. — The Biden Administration through the U.S. Department of Energy (DOE) today proposed new energy-efficiency standards for residential gas furnaces that will significantly reduce greenhouse gas emissions and save consumers billions annually on their energy bills. Today’s proposal is part of 100 energy-efficiency actions the Administration is completing this year to save the average family $100 a year. Under the proposed rule, non-weatherized gas furnaces and those used in mobile homes would be required to achieve an annual fuel utilization efficiency of 95%. These efficiency improvements would save consumers $1.9 billion annually and, over 30 years, reduce carbon emissions by 373 million metric tons and methane emissions by 5.1 million tons — the equivalent of what 61 million homes emit each year. 

“By updating energy standards for many carbon-emitting appliances, such as home furnaces, the Biden Administration is working to save consumers money,” said U.S. Secretary of Energy Jennifer M. Granholm. “These efficiency measures not only reduce carbon and methane emissions, but also provide huge material benefits to American households in the form of cleaner air, modernized technology, and cheaper energy.”

In addition to boosting the efficiency of gas furnaces, which account for approximately 15% of annual U.S. residential energy use, the Biden Administration is also improving the accessibility and affordability of heat pumps—super-efficient electric equipment that can be used to heat and cool households. Last week, President Biden invoked the Defense Production Act (DPA) to rapidly expand American manufacturing of five critical clean energy technologies, including heat pumps. This DPA authorization will reduce reliance on adversaries like Russia for oil and gas and expedite the installation of Made in America heat pumps across homes and other buildings. The proposed rule requests comment on heat pump price declines as a result of increased shipments expected from decarbonization policies and increased domestic supply of heat pumps from the DPA.

Achieving an annual fuel utilization efficiency of 95% (producing 95 British thermal units (BTUs) of heating for every 100 BTUs of natural gas consumed) would mean taking almost all of the gas used by the furnaces and turning it into heat provided to the living space. Modern condensing furnaces, which use a secondary heat exchangers to capture excess heat from the furnace’s exhaust gases, make this standard achievable for every American home. Canada has already made the use of condensing furnaces mandatory for residential heating for over a decade.

If adopted within DOE’s proposed timeframe, the new rule will come into effect in 2029. DOE expects the new rule to save consumers a cumulative $30.3 billion over 30 years. A consumer that installs a furnace meeting the proposed levels, in order to replace a non-condensing, inefficient furnace, will save $60 on their utility bills annually. In addition to 15% of annual residential energy use, residential gas furnaces account for approximately 3.4% of all domestic energy use in the United States as of 2020.

DOE’s Building Technologies Office implements minimum energy conservation standards for more than 60 categories of appliances and equipment. To learn more, visit the Appliance and Equipment Standards Program homepage

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