New federal law may make replacing your furnace much costlier

Nov. 24, 2012

Northjersey.com


Replacing an aging furnace could cost homeowners thousands of dollars more after May 1, when new federal energy efficiency standards take effect for northern states, including New Jersey.

The new energy-efficient natural gas furnaces aren’t that much more expensive themselves, but they must be vented directly to an outside wall rather than through the chimney, which can increase installation costs dramatically, home heating contractors say.

The new rules will not affect homeowners with gas-burning boilers that heat water for radiator systems. But the bulk of homeowners in North Jersey will be affected, since up to 80 percent of homes in the region are heated with forced hot air systems that use gas-fired furnaces, said Milton Baum, general manager of Keil Heating and Cooling of Riverdale.

Home-heating contractors suggest that homeowners contemplating a furnace replacement in the next few years might want to have a contractor visit their home this winter to assess whether installation of a high-efficiency furnace would be straightforward or complicated, based on the home’s layout.

“The average furnace lasts about 20 years, so if yours is 10 years old or less, this is not an issue for you,” Baum said.

Under the Department of Energy rules, gas furnaces installed after May 1 must be at least 90 percent efficient, compared with the current 78 percent efficient criterion.

Similar improvements in energy efficiency are set to go into effect for heat pumps and air conditioning systems in Southern states.

The rules were produced after Congress passed a law in 2007 allowing the Department of Energy to develop regional standards for central heating and cooling equipment.

Analysis by the U.S. Department of Energy concluded that between 2013 and 2045, the higher-efficiency furnaces, air conditioning systems and heat pumps would save about one-fifth of the amount of total energy used annually by the U.S. residential sector.

In addition, the drop in energy use would result in greenhouse gas reductions of up to 143 million metric tons of carbon dioxide over those three decades. That’s equivalent to the amount of carbon emitted each year to produce the electricity used by 1.8 million homes, or the carbon emissions produced from burning nearly 77,900 railcars worth of coal, according to an Environmental Protection Agency greenhouse gas calculator.

But not everyone thinks the newer furnaces will reduce energy consumption by quite as much as the Energy Department predicts. “I’d say 99 percent of homes do not have properly designed ductwork,” which compromises the stated efficiency level of any furnace, Baum said.

A basic, standard-sized gas furnace with an 80 percent efficiency rating costs about $3,500, Baum said, while the equivalent 92-percent-efficient model is about $300 more. That includes a full installation if there are no complications.

Through its WARMAdvantage Program, the state Board of Public Utilities provides rebates of $400 to customers of PSE&G and New Jersey Natural Gas who purchase gas furnaces with an efficiency rating of 95 percent or higher.

Based on a savings calculator, Fertel said that a new higher efficient 80,000 BTU furnace — the size to heat a standard home — would save a homeowner about $300 a year by using less natural gas than an older model.

But all those savings can easily go out the window for homes where the installation process is more complicated.

“Here’s where the issue lies — if your old furnace is in the center of a finished basement,” said Richard Fertel, president and owner of Bornstein Sons Inc., a home heating contractor that serves Bergen and Passaic.

The newer model furnaces are often taller than the older ones, so the height is another consideration when figuring out where to put it.

“So many houses built in the 1940s and 1950s were not built to accommodate this sort of thing,” Baum said.

The new furnaces need two pipes — one that takes fresh air into the furnace so combustion can occur, and one that vents combustible gases outside the house. Generally, that venting pipe must extend through an outside wall of the home, which requires construction work. Most older furnaces vent through the chimney, but that doesn’t work for most higher efficiency furnaces. The old-model furnaces produced smoke warm enough to float up a chimney, Fertel said, but the higher efficient models produce cooler smoke, which needs to be forced out.

In addition, because the venting pipe needs to be at a certain angle to allow proper venting, relocation of the furnace might be necessary. That would require moving the gas line and changing the electrical wiring, adding more expense. The new piping could also be unsightly if the furnace is in the center of the basement.

“It’s going to look poorly, and you will want to box it and the carpentry work will raise the installation costs,” Fertel said.

There’s still another concern — and another possible cost — if a home has a standard 40- or 50-gallon gas water heater. Those heaters are generally vented through the chimney along with the older furnaces. But after removing the old furnace venting pipe, there is not enough heat generated in the chimney by the water heater venting pipe alone to prevent condensation from occurring. And that condensation will include sulfuric acid, which can eat away at a chimney’s mortar joints. Re-venting the water heater could increase the total cost of the new furnace project by $3,000 to $4,000, Baum said.

Those who own condominiums might bump up against an added headache — their condominium bylaws, which often prohibit modifying or punching through any exterior wall, Baum said. “Because of this, condo groups are scrambling right now to change their bylaws,” he said.