Furnaces are the most common type of heating equipment in the United States. Furnaces burn natural gas, propane, or oil for heat and distribute the heat through a duct system. There are two main types of residential furnaces: weatherized (for outdoor installation, such as on rooftops) and non-weatherized. Non-weatherized furnaces are far more common and come in two forms: condensing and non-condensing. Furnaces with 90% or greater AFUE (annual fuel utilization efficiency) are known as "condensing" products because they condense water out of flue gases to recoup heat to warm the home that would otherwise be vented up the chimney.
In 2007, DOE set gas furnace standards at 80% AFUE, effective 2015. However, virtually all furnaces on the market have an AFUE of 80% or better, which prompted states and environmental and consumer groups to sue DOE over its 2007 decision. In April 2009, DOE accepted a “voluntary remand” in that litigation. In October 2009, manufacturers and efficiency advocates negotiated an agreement that, for the first time, included different standard levels in three climate regions: the North, South, and Southwest. DOE issued a direct final rule (DFR) in June 2011 reflecting the standard levels in the consensus agreement (90% AFUE in the North, 80% AFUE in the South and Southwest, and 83% AFUE in all regions for oil furnaces.) In 2012, before the standards went into effect, the American Public Gas Association (APGA) filed a lawsuit objecting to the process used to adopt the standards. The litigation halted implementation of the standards for non-weatherized gas furnaces. On April 24th, 2014, after a two-year delay, the US Court of Appeals for the DC Circuit approved a settlement between the US Department of Energy (DOE) and the APGA. The settlement rolls back the gas furnace efficiency standards for non-weatherized gas furnaces, requires DOE to complete a new rulemaking within two years and requires DOE to initiate a rulemaking on the enforcement of regional standards. The effective date of the yet-to-be determined standards will likely be no sooner than 2021.
The 2011 standard for weatherized gas furnaces went into effect in 2015.
Space heating is the largest energy end-use in the U.S. residential sector, accounting for about 40% of total residential energy consumption. About 40% of U.S. households use natural gas furnaces (the most common equipment and fuel used for space heating), while a little more than 14% use electric furnaces and about 3% use oil furnaces. Non-weatherized, condensing furnaces are typically the most efficient (90% and above) as waste heat is not entirely dissipated outside (as with a weatherized furnace) and more heat is recovered from the combustion process from the latent heat created from the condensing of water vapor. No gas furnaces exist with AFUE ratings between 83–89% because problems arising from condensation occur within this range.