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Purchasing Energy-Efficient Residential Furnaces

The Federal Energy Management Program (FEMP) provides acquisition guidance for residential furnaces, a product category covered by ENERGY STAR. Federal laws and requirements mandate that agencies purchase ENERGY STAR-qualified products or FEMP-designated products in all product categories covered by these programs and in any acquisition actions that are not specifically exempted by law.

FEMP's acquisition guidance for residential furnaces and the associated ENERGY STAR efficiency requirements apply to gas-, propane-, and oil-fired furnaces with heating capacities less than 225,000 Btu/h.

Commercial furnaces (i.e., those with heating capacities of 225,000 Btu/h or greater) and weatherized furnaces are excluded.

This acquisition guidance was updated in December 2015.

Find Product Efficiency Requirements

The U.S. Environmental Protection Agency (EPA) provides residential furnace program requirements and efficiency criteria on the ENERGY STAR website. Manufacturers meeting these requirements are allowed to display the ENERGY STAR label on complying models. Federal buyers can use ENERGY STAR's list of certified residential furnaces to identify or verify complying models.

Make a Cost-Effective Purchase: Save $1,241 or More by Buying ENERGY STAR

FEMP has calculated that the required ENERGY STAR-qualified residential furnace saves money if priced no more than $1,241 above the less efficient model. The best available model saves up to $1,443. Table 1 compares three types of product purchases and calculates the lifetime cost savings of purchasing efficient models. Federal purchasers can assume products that meet ENERGY STAR efficiency requirements are life cycle cost-effective.

Table 1. Lifetime Savings for Efficient Residential Furnace Models
Performance Best Available ENERGY STAR Less Efficient
AFUE 97.5% 95.0% 80.0%
Output Capacity 70,000 Btu/h 70,000 Btu/h 70,000 Btu/h
Annual Energy Use 648 therm 665 therm 770 therm
Annual Energy Cost $441 $452 $524
Lifetime Energy Cost (20 years) $7,665 $7,867 $9,108
Lifetime Cost Savings $1,443 $1,241 ======
View the Performance and Model Assumptions for Table 1
Performance Column

Annual Fuel Utilization Efficiency (AFUE): Ratio of useful energy output to energy input, expressed as a percentage (%), over the entire heating season.

Output Capacity: Shown in British thermal units per hour (Btu/h).

Annual Energy Use: Based on the test method referenced in 10 CFR 430, Subpart B, Appendix N.

Annual Energy Cost: Calculated based on an assumed natural gas price of $0.68/therm, which is the average natural gas price at federal facilities throughout the United States.

Lifetime Energy Cost: Future electricity price trends and a 3% discount rate are from Energy Price Indices and Discount Factors for Life-Cycle Cost Analysis - 2015: Annual Supplement to NIST Handbook 135 and NBS Special Publication 709 (NISTIR 85-3273-30).

Lifetime Cost Savings: The difference between the lifetime energy cost of the less efficient model and the lifetime energy cost of the ENERGY STAR model or best available model.

Best Available Model Column

Calculated based on the December 2015 List of Certified ENERGY STAR Products. More efficient models may be introduced to the market after FEMP's acquisition guidance is posted.

ENERGY STAR Model Column

Calculated based on current ENERGY STAR efficiency levels. Federal agencies must purchase products that meet or exceed ENERGY STAR efficiency levels.

Less Efficient Model Column

Calculated based on typical products used in non-federal applications.


Determine When ENERGY STAR Products Are Cost-Effective

An efficient product is cost-effective when the lifetime energy savings (from avoided energy costs over the life of the product, discounted to present value) exceed the additional up-front cost (if any) compared to a less efficient option. ENERGY STAR considers up-front costs and lifetime energy savings when setting required efficiency levels. Federal purchasers can assume ENERGY STAR-qualified products and products that meet FEMP-designated efficiency requirements are life cycle cost-effective. In high-use applications or when energy rates are above the federal average, purchasers may save more if they specify products that exceed federal efficiency requirements, as shown in the Best Available column above.

Claim an Exception to Federal Purchasing Requirements

Products meeting ENERGY STAR or FEMP-designated efficiency requirements may not be life cycle cost-effective in certain low-use applications or in locations with very low rates for electricity or natural gas. However, for most applications, purchasers will find that energy-efficient products have the lowest life cycle cost.

Agencies may claim an exception to federal purchasing requirements through a written finding that no FEMP-designated or ENERGY STAR-qualified product is available to meet functional requirements, or that no such product is life cycle cost-effective for the specific application. Learn more about federal product purchasing requirements.

Incorporate Federal Acquisition Regulation Language in Contracts

These mandatory requirements apply to all forms of procurement, including construction guide and project specifications; renovation, repair, energy service, and operation and maintenance (O&M) contracts; lease agreements; acquisitions made using purchase cards; and solicitations for offers. Federal Acquisition Regulation (FAR) Part 23.206 requires agencies to insert the clause at FAR section 52.223-15 into contracts and solicitations that deliver, acquire, furnish, or specify energy-consuming products for use in federal government facilities. To comply with FAR requirements, FEMP recommends that agencies incorporate efficiency requirements into technical specifications, the evaluation criteria of solicitations, and the evaluations of solicitation responses.

Find Federal Supply Sources

The federal supply sources for energy-efficient products are the General Services Administration (GSA) and the Defense Logistics Agency (DLA). GSA sells products through its Multiple Awards Schedules program and online shopping network, GSA Advantage!. DLA offers products through the Defense Supply Center Philadelphia and online through DOD EMALL. Products sold through DLA are codified with a 13-digit National Stock Number (NSN) and, in some cases, a two-letter Environmental Attribute Code (ENAC). The ENAC identifies items that have positive environmental characteristics and meet standards set by an approved third party, such as FEMP and ENERGY STAR.

The United Nations Standard Products and Services Code (UNSPSC) is a worldwide classification system for e-commerce. It contains more than 50,000 commodities, including many used in the federal sector, each with a unique eight-digit, four-level identification code. Manufacturers and vendors are beginning to adopt the UNSPSC classification convention and electronic procurement systems are beginning to include UNSPSC tracking in their software packages. UNSPSCs can help the federal acquisition community identify product categories covered by sustainable acquisition requirements, track purchases of products within those categories, and report on progress toward meeting sustainable acquisition goals. FEMP has developed a table of ENERGY STAR and FEMP-designated covered product categories and related UNSPSC numbers.

Residential Furnace Product Codes

The DLA ENAC for residential furnaces is "HG."

The UNSPSC for residential furnaces is 40101805.

Buyer Tips: Make Informed Product Purchases

ENERGY STAR requirements for residential furnaces are divided into the regions shown in Table 2.

Table 2. ENERGY STAR Regions for Residential Furnaces
Region States per Region
U.S. North Alaska, Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming
U.S. South Alabama, American Samoa, Arizona, Arkansas, California, Delaware, District of Columbia, Florida, Georgia, Guam, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, and Virginia

More efficient models are required in the U.S. North region due to the colder climate and greater number of heating degree days.

In the warmer U.S. South region where space heating requirements are less, a special ENERGY STAR logo is used to identify furnaces that qualify at the lower efficiency level. Residential furnaces with the U.S. South region ENERGY STAR labels cannot be sold in the U.S. North region.

All models that meet the ENERGY STAR product specifications are "condensing" furnaces. This technology takes advantage of normally exhausted heat in the furnace's flue gas to improve efficiency. When installing condensing furnaces, select products that feature sealed combustion. Condensing furnaces should not use indoor air for combustion. Indoor air frequently contains contaminants from common household products and can cause corrosion that damages condensing furnaces. Furnaces with sealed combustion have supply lines that bring outdoor air directly to the combustion chambers.

In addition to improving efficiency, condensing furnaces with sealed combustion are safer. The supply lines, combustion chambers, and flues are sealed from the inside of homes thus preventing exhaust gases from leaking or being back-drafted into occupied spaces. Due to these features, condensing furnaces require slight modifications with installation and are usually more expensive than standard-efficiency models; however, their increased efficiency means they are typically life cycle cost-effective.

An efficient furnace will not save energy or money if it is not properly installed. Federal procurement officials and buyers should require that gas furnaces be installed in accordance with the ENERGY STAR Quality Installation (QI) guidelines. Installation problems like oversizing, poorly designed distribution systems, and leaky ducts result in efficiency losses, occupant discomfort, and shortened equipment life. Requiring the contractor to follow the QI guidelines will ensure that these and other problems are addressed and the expected energy and cost savings are achieved.

Many states and electric utilities offer rebates or other incentives for the purchase of ENERGY STAR-qualified products. Use the ENERGY STAR Rebate Finder to see if your local utility offers these incentives. FEMP's Energy Incentive Program helps federal agencies take advantage of these incentives by providing information about the funding-program opportunities available in each state.

User Tips: Use Products More Efficiently

Properly sealing the building envelope and weather-stripping doors and windows can result in additional savings and may allow for the use of a lower-capacity furnace, resulting in even further savings. Consider leaving your furnace off during unoccupied hours or using a programmable thermostat to minimize unnecessary operation. Regular maintenance is necessary to maintain peak performance.

Lawrence Berkeley National Laboratory provided supporting analysis for this acquisition guidance.