High Costs, High Emissions: Why It’s Time to Phase Out Energy-Wasting Furnaces

Click here for a printable version of the fact sheet.

Outdated, inefficient gas furnaces are generating high energy bills that burden lower-income households and emitting millions of tons of avoidable climate emissions and other pollutants that harm human health. The Department of Energy (DOE) recently proposed to phase out the least efficient models currently on the market.

Strong new standards could cut average annual home heating bills for consumers replacing an inefficient furnace by about $60 per year.

Heating is the biggest utility cost for most U.S. households and a significant source of emissions that harm the climate and health.

Nearly half of U.S. homes—about 50 million—are heated with a gas or propane furnace.1 Households with a basic (non-condensing) gas furnace face annual average heating bills of nearly $700.2 Those who live in older, draftier homes or in colder climates can have much higher bills. High heating bills can force a terrible choice between paying for heat and other necessities such as food and medicine.3 These bills particularly strain low-income households, which pay three times as much of their incomes on energy costs than non-low-income households and are disproportionately Black, Hispanic, and Native American.4 In 2022, rising residential gas prices are making this strain even worse.

Gas appliances are also a significant source of NOx, which is a precursor to particulate and ozone pollution. This pollution causes asthma attacks, cardiovascular disease, and even premature death—health problems especially prevalent in low-income communities.5

By mid-century, these furnace standards would be cutting carbon emissions by an amount equivalent to shutting off 27 gas power plants.

Gas heating appliances—primarily furnaces—account for about two-thirds of household gas use and related emissions.6

Phasing out inefficient furnaces would ease costs for households and reduce emissions.

Manufacturers have developed and popularized substantially more efficient models – known as condensing furnaces – that capture and use more of the heat from the furnace’s combustion chamber, reducing waste.

Many consumers have already made the switch, and about half of new purchases are now condensing models. But too many consumers end up with the least-efficient gas furnaces since that’s often what a landlord or a builder chooses. For homeowners, replacing a broken furnace in the middle of winter often doesn’t allow for time to consider more efficient options.

In June 2022, DOE proposed updated national efficiency standards that would require all new furnaces sold to be energy efficient, ensuring that all consumers benefit from this condensing technology. According to DOE’s analysis, the additional upfront cost of a more efficient furnace would be paid back well within the furnace’s useful life.7 On average, the proposed standard would reduce costs for each affected household by nearly $500 over the life of a furnace.8 Of course, for renters and anyone else who does not pay the cost of a new furnace, the savings start the day that a new, more efficient furnace is fired up.

By requiring furnaces to use about 15% less energy, the proposed standard would cut 373 million metric tons of carbon emissions, 5 million tons of methane emissions, and 833 thousand tons of NOx emissions over 30 years of sales, reducing pollution that harms the environment and human health.9

What about heat pumps?

With electricity generation becoming cleaner, heat pumps can be a great way to reduce climate emissions and, for some consumers, ease heating bills. Many utilities and states run programs to encourage heat pump adoption.10

The proposed DOE gas furnace standard will not require consumers to purchase heat pumps, which are regulated separately. DOE estimated in the proposed rule that if non-condensing models were removed from the market, one in ten households looking to replace a furnace would instead purchase a heat pump. The rest would opt for a condensing furnace.

Gas utilities have fought efforts to phase out the least efficient furnaces for decades.

The big trade associations that represent gas companies – the American Gas Association (AGA) and American Public Gas Association (APGA) – have fought standards that would reduce consumer bills (and gas utility sales). They stymied two attempts by the Obama administration to raise the standards and then convinced the Trump administration to issue a rule that effectively blocked strong standards. The Biden DOE repealed that rule earlier this year over the gas industry’s objections. Now, more than 30 years after Congress enacted the original furnace standards, which have never been meaningfully updated, the gas industry is once again lobbying against improving them.

DOE should finalize the proposed standard that phases out energy-wasting models.

The Department is now seeking public comment on the proposed rule until September 6th. 

Phasing out the most inefficient furnaces would be a big win for consumers, the climate, and public health. It would ease burdensome energy bills and help to achieve climate goals. Supporters of strong furnace standards should urge DOE to finalize them.


1 Includes both gas and propane furnaces, which are nearly identical. Energy Information Administration (EIA), Residential Energy Consumption Survey (2020). Table HC https://www.eia.gov/consumption/residential/data/2020/hc/pdf/HC%206.1.pdf 
2 U.S. Department of Energy, Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Residential Furnaces. June 2022. Table 8.7.1 and 8.7.5.
3 J.Howat, J.T. Colgan, W. Gerlitz, M. Santiago-Mosier, and K.R. Rábago. Report Reversing Energy System Inequity. Retrieved April 1, 2022, from    www.nclc.org/images/pdf/special_projects/climate_change/report-reversin….
4 A. Drehobl, L. Ross, and R. Ayala, How High are Household Energy Burdens? (Washington, DC: American Council for an Energy-Efficient Economy, 2020).   www.aceee.org/research-report/u2006. 
5 J. Dennison, L. Louis-Prescott, and T. Gruenwald, How Air Agencies Can Help End Fossil Fuel Pollution from Buildings (2021) Pg 7. rmi. org/insight/outdoor-air-quality-brief/.
7 U.S. Department of Energy, Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Residential Furnaces. June 2022. Table 8.7.1 and 8.7.2
8 Ibid
9 U.S. Department of Energy, Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Residential Furnaces. June 2022. Table 13.2.1 and 13.2.2
10 W. Berg, E. Cooper, and N. Cortez, State Policies and Rules to Enable Beneficial Electrification in Buildings through Fuel Switching (Washington, DC: ACEEE, 2020). www.aceee.org/policy-brief/2020/04/state-policies-and-rules-enable-bene….