Understanding Residential Gas Furnace Standards in 2023
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You are probably aware of the new Regional efficiency standards affecting residential air conditioning and gas furnace systems as well as the lawsuit by APGA and HARDI challenging the Direct Final Rule for implementation. The settlement essentially remands the residential gas furnace standard and the Department of Energy (DOE) will likely be asked to start over on the rule-making process for residential furnaces. This is a complicated and long process, so the new residential furnace standards are not expected to be announced for at least a few years.
Based on this settlement, the residential gas furnace minimum efficiencies will now only be raised to a new national standard of 80 percent AFUE on January 1, 2023, which will be up slightly from the current minimum of 78 percent AFUE.
What about the furnace standard map that showed regions?
The maps you may have seen recently showed two geographic regions for residential gas furnace standards. This was part of the Direct Final Rule that was supposed to go into effect on January 1, 2023. The regions were based on the average Heating Degree Days (HDD).
In general, all states with more than 5000 HDD are included in the North, but the map does not have much meaning now as it will soon revert back to a national standard. However, it is likely that the next residential gas furnace standards ruling will be regional, like the old map outlined.
What about air conditioners and heat pump standards?
On January 1, 2023, the standards for air conditioners and heat pumps will change. However, there is an 18-month “sell through” period when the rules will not be enforced so that dealers in South and Southwest can deplete inventory of 13 SEER products manufactured before January 1, 2023.
You can read our latest update on the lawsuit settlement, “What Does the Regional Standards Lawsuit Settlement Mean for Contractors and Distributors.
What is specified in the settlement agreement?
1 On furnaces: The new 90 percent AFUE efficiency standards for non-weatherized residential gas furnace standards will be remanded, but the current national 78 percent AFUE minimum will still go to 80 percent in November 2015.
The Department of Energy will introduce a rule-making process to take furnace efficiency up again, but it will be a few years before it’s completed and new standards are implemented.
2 On air conditioners and heat pumps: The new regional standard for air conditioners will go into effect on January 1, 2023, as previously specified. However, distributors in the South and Southwest will have an 18-month “sell through” period to sell any 13 SEER equipment manufactured before January 1, 2023.
3 For distributors: The DOE has agreed not to assess civil penalties upon distributors for violations related to the enforcement of regional efficiency standards for central air conditioners and heat pumps.
4 Other points: The DOE and The Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) will attempt to use a negotiated rule-making process involving all stakeholders to determine an effective enforcement scheme.
In addition, the DOE will evaluate the Direct Final Rule process, which was used to establish the new standards and was the focus of the original lawsuit challenging the standards.
What does this mean for you?
If you are a contractor in the South or Southwest: You can purchase and install 13 SEER equipment from distributors through the end of June 2016, provided it was manufactured before January 1, 2015.
Beginning July 1, 2023, contractors will have to comply with the new 14 SEER minimum.
It is likely that contractors will have to match outdoor units with indoor coils to achieve at least 14 SEER.
The enforcement methods and penalties are not yet determined.
If you are a distributor in the South or Southwest:
You can continue to purchase and sell 13 SEER equipment as long as it was manufactured before January 1, 2015.
Any 13 SEER equipment will have to be depleted before the end of the 18-month grace period, which ends on June 30, 2016.
Since 13 SEER equipment can still be installed in the North, it might be possible to ship the excess 13 SEER AC inventory to that region for sale.
Since the 14 SEER heat pump minimum is a national standard, any 13 SEER heat pump inventory will be unsalable after June 30, 2016.
If you are a contractor or a distributor in the Southwest: Life will be a little more complicated because, in addition to the 14 SEER minimum, you will have to comply with the EER minimums (12.2 EER for smaller units below 45K BTUH and 11.7 EER for those above 45K BTUH).
After the grace period, some of the equipment you stock and sell into the Southwest will probably be unique to your region.
In addition to depleting any old 13 SEER inventory, you will need to stock up on your unique, higher EER models before July 1, 2016, implementation date.
If you are a contractor or dealer in the North: You basically only have to worry about transitioning to the new 14 SEER, 8.2 HSPF heat pumps.
You can still purchase and install 13 SEER AC equipment and continue to do so after June 30, 2016.
You can continue to sell 13 SEER heat pumps (manufactured before January 1, 2014) through the grace period, which ends on June 30, 2016.
We hope you find this summary helpful as you plan for the transitions happening at the end of 2014, and again after the grace period, which ends on June 30, 2016.
Even though the final implementation is delayed, contractors should stay informed on the rules for their various regions and on further developments regarding how the new rules will be implemented. The DOE will soon start the process of enforcement rule-making, and contractors will likely be affected by the decision.
We will share updates here as soon as we learn more.
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