The U.S. Department of Energy (DOE) recently published new energy conservation standards for residential furnace fans, which it says will help reduce carbon pollution by up to 34 million metric tons and save Americans more than $9 billion in home electricity bills through 2030. Critics of the rule argue the DOE is placing an undue burden on the HVAC industry by regulating components of appliances that already meet energy-efficiency guidelines, and that consumers will be harmed by the higher cost of the new furnaces.
Manufacturers will initially bear the brunt of this change, as they will need to redesign their furnace lines in order to comply with the new standard, which takes effect in 2019. While it is still too early to tell how much that will cost, it will likely be significant, noted Francis Dietz, vice president of public affairs, Air-Conditioning, Heating, and Refrigeration Institute (AHRI). “We believe that regulating individual components is a step in the wrong direction. Instead, we should be moving in the other direction — considering the overall efficiency of systems rather than components.”
The new furnace fan standard is a first for the DOE, which, up until now, has regulated the system-based performance of HVAC units, not the energy efficiency of individual components. This is a concern, said Dietz, because the regulation of a component seems to be contrary to the basic concept of a minimum-efficiency standard for the product. “It also reduces the manufacturer’s flexibility in determining how a model will comply with the standard.”
Furnaces are already tested for gas efficiency (AFUE) and electrical efficiency (SEER) as part of a total system analysis (Energy Star), and additional standards on power usage or individual components are unnecessary and will place an undue burden on manufacturers, said Shawn Laskoski, vice president of product management, Ingersoll Rand. “The standards themselves could limit the opportunity to differentiate and innovate as you see manufacturers currently doing today.”
Karen Meyers, vice president of government affairs, Rheem Mfg. Co., agrees, noting that “adding efficiency standards for components of a product and having to ensure the product meets an overall efficiency standard increases the test requirements, which hinders our ability to utilize design resources to focus on new, innovative products that may actually offer more energy savings. Efficiency standards for components also restrict the options available to furnace designers to meet other product requirements such as cost and ease of service.”
In order to comply with the new standard, manufacturers will have to replace the permanent split capacitor (PSC) motors often used to drive furnace fans with more efficient motors, such as brushless permanent magnet (BPM) motors — also known as ECMs — and it will not be as easy as swapping one for the other, said Matt Lattanzi, director of product and warranty management, Nordyne. “While the good news is the entire platform does not need to be redesigned, motor/blower combinations will still need to be evaluated and altered, if necessary.”
Certain products may require significant redesigns in order to comply with the standard, said Meyers, such as special-purpose furnaces that are designed for homes with low heating loads, but high cooling loads.
Laskoski also believes a very significant design effort will be required to bring units up to the new standards. “For this reason, we believe it will consume a significant amount of resources and be costly to make this switch.”
There is no question that implementing the new standard will come at a cost, besides the obvious additional expense of BPM motors versus PSC motors, said Lattanzi. “There are other costs involved, such as requalifying the furnace to the new standard, updating literature, reconfiguring manufacturing processes, and managing inventory, to name a few. And all furnaces will need to be tested and compliance-verified to the new standard, so the cost of manufacturing will, unfortunately, go up.”
Helping or Hurting
All the costs associated with complying with the standard will eventually be passed along to consumers, who will undoubtedly have to pay more for newly compliant furnaces. This is of concern to Dietz, who worries higher prices will dampen demand — at least in the short term — after the rule goes into effect. “Our fear is the higher price of a furnace built to comply with this standard will cause some people to repair their current systems rather than install new, higher-efficiency furnaces. The net effect will be to hurt, rather than help, energy efficiency, since those consumers will forgo the benefit of both the more efficient furnace and the more efficient fan.”
Some types of furnaces may disappear completely, as there is a strong possibility that single-stage furnaces will not meet the standard, said Laskoski. “The DOE’s new efficiency standards may limit consumers’ available options by effectively eliminating single-stage and/or PSC motor furnaces. The outcome of eliminating these options will likely be significantly higher costs to the homeowner. Unfortunately, the electrical savings may not offset the price increase for homeowners, who may opt to invest in repairing existing units rather than replacing them, keeping less efficient units in the marketplace for longer, negating the benefits.”
The higher cost of more energy-efficient motors will definitely affect everyone in the supply chain, from manufacturers to distributors to contractors to consumers. Even though homeowners will experience higher upfront costs and more expensive motor-related repairs, there are some initial homeowner benefits that have been identified, said Meyers. “The DOE anticipates homeowners should experience energy savings over the lifetime of the furnace, and we also believe they may enjoy a quieter operating unit, which is important to many consumers.”
But, the question remains, will homeowners recoup that extra upfront cost in energy savings? “The answer depends on whether or not you agree with the assumptions indicated in the rulemaking,” said Lattanzi. “Our industry has had much debate over these assumptions because not everyone agrees the energy savings will eventually offset the additional upfront cost for homeowners.”
Laskoski remains skeptical of the new rule, noting, “We still have questions around the validity of the assumptions used to justify the standards, specifically around the electrical savings and the system repair rates, which is why we ultimately believe this standard will hurt the consumer.”
Publication date: 12/1/2014