Newly-manufactured indoor residential gas furnaces will have to be at least 95% efficient starting in late 2028 under a new rule issued by the U.S. Department of Energy (DOE).

In an effort to save consumers an estimated $1.5 billion annually in utility costs and cut carbon emissions by 332 million metric tons over 30 years, the DOE is requiring every new residential, non-weatherized gas furnace, and every mobile home gas furnace, to have a minimum annual fuel utilization efficiency (AFUE) of 95%.

Concerns for the New Furnace Rules

Critics in the HVAC industry express concern that the DOE has not properly evaluated the true costs to consumers, as these types of furnaces usually require significant home modifications. To thoroughly understand these concerns and evaluate the cost of a high-efficiency furnace, it is imperative to first understand what a high-efficiency gas furnace looks like, how it works, and how it compares to the current standard of 80% AFUE gas furnaces.

High-efficiency gas furnaces, also called “condensing gas” furnaces, produce a higher AFUE rating because while they use the same amount of fuel supplied as an 80% furnace, they can deliver between 10-18% more heat.

How do they do this? The main trick up the sleeves of a condensing gas furnace is the ability to cool off what would be exhaust, also referred to as “flue,” gas and put that extra heat into the house. However, along with this added efficiency comes home modifications, which are necessary to the operation of a condensing gas furnace when converting from an 80%. This, as many homeowners are becoming aware, is costly.

Secondary Heat Exchanger, The Key Component

All high-efficiency condensing gas furnaces have the unique feature of two heat exchangers — a primary and secondary — whereas the mid-efficiency furnace only has one. The primary heat exchanger is the set of serpentine-shaped tubes off the burner section, and the secondary heat exchanger — the key component of a condensing gas furnace, which is made up of many tiny fin-tubes in a collector box — is located behind the inducer assembly. It might confuse some because the return air from the blower hits the secondary heat exchanger first, then the primary heat exchanger.

After natural gas ignites in the burner section, the hot combustion gas travels through the primary heat exchanger and then into the secondary before exiting out of Category IV flue pipe, which is made of Schedule 40 PVC and designed for positive-pressure, cooler gas. This PVC exhaust piping is the main visual cue that a furnace is a high-efficiency one. In contrast, mid-efficiency furnaces use metal pipe, which allows the flue gas to remain hot and under a negative pressure, which forces the gas to draft upwards and out of the house, usually through a chimney. In the process of exchanging heat twice, the high-efficiency furnace will, quite simply, produce more heat than a standard furnace while using the same amount of fuel supplied.

The problems arise because as more heat is removed from the combustion gas, the gas will condense (hence the name) in the form of highly acidic water. This is why the flue pipe of a high-efficiency furnace must be PVC. The flue gas is significantly cooler than a mid-efficiency furnace flue, so any acidic condensation occurring inside of PVC flue piping will not damage the plastic pipe.

Major concerns for replacing an 80% furnace with a high-efficiency furnace are as follows: venting requirements, drilling extra holes in the house to the outside, and condensate water management, which can add significant financial costs and inconveniences to the homeowner.

Venting Requirements

One problem many homeowners run into with high-efficiency conversions is the so-called “orphaned,” or stranded, domestic hot water heater. Thirty years ago, masonry chimneys were designed to vent exhaust gasses from both the furnace and the hot water tank. Because the acidic condensate from the high-efficiency flue gas would damage the mortar, it is recommended to vent this type of flue out the side of the house, as chimneys usually require over 10 feet of pipe fed from the top and might require many bends in the pipe to get to, making it a highly impractical method of venting. When the flue pipe is converted from the chimney to the side of the house, the hot water tank is stranded, meaning its flue is the only gas traveling up the chimney. When this happens, it becomes significantly more difficult for the hot water tank’s exhaust gasses to draft and make it outside. When a hot water tank is stranded, a chimney liner must be dropped to reduce the size of the chimney and allow for the hot water tank’s gas to properly draft upward and out of the house

Drilling Holes in the House

When it comes to combustion, for mid- and high-efficiency gas furnaces, the combustion air needs to be pulled in, and it needs to be exhausted out. High-efficiency furnaces are typically what is referred to as “sealed combustion,” meaning the combustion intake air does not mix with the indoor air. It is pulled in from outside, used during the combustion process, then exhausted back outside. This means that typically two new holes must be drilled to the exterior wall for intake and exhaust, unless the furnace can pull combustion air from a ventilated — meaning, has access to outdoor air — attic or crawlspace, or depending on the type of vent termination, one hole can accomplish both. Though technicians will find residential furnaces out there using intake air directly from the basement (i.e., no outside air), most manufacturers recommend using outdoor air to prevent the furnace from using a significant amount of oxygen from the home. Mid-efficiency furnaces got away with using indoor air for combustion because homes were not sealed as they are today and could thus more easily suck in air from cracks and crevices. Running new exhaust pipes might also raise concerns for homes where the furnace is located in an area with finished ceilings.

Condensate Water Management

The final major concern for converting to a high-efficiency furnace is how to manage the corrosive condensate water. For every 100,000 BTU/hr of heat input, a condensing gas furnace will make roughly 1 gallon of water per hour. In other words, a 120,000-BTU furnace running for 8 hours a day will create about 10 gallons of water. This water must be able to flow out of the furnace and into a plastic drain, which involves proper piping techniques and a slight pitch forward with the furnace. If the homeowner lives in an area with metal drain pipes, the condensate must be neutralized before entering metal pipes. And again, this drain piping could be problematic for homes with finished basements.

Understanding the Added Costs

While there are many benefits to converting to a high-efficiency furnace, namely the fuel cost savings and the positive environmental impacts, consumers and technicians alike must concern themselves with the additional home modifications for a high-efficiency furnace to work properly. They need proper venting; at least one — and possibly two — holes drilled into the exterior wall; and the acidic condensate water must be treated or managed properly, which includes good piping practices to remove all condensate from the furnace. Proper estimations of the true cost savings of a high-efficiency furnace must consider these factors which vary widely from home to home.