AGA Energy Insights – Empowering Consumer Choices-Analyzing the Impact of the ENERGY STAR Program on the Adoption of High-Efficiency Gas Appliances.

AGA has developed a new energy insight report on the Environmental Protection Agency’s ENERGY STAR program and its effectiveness in promoting higher-efficiency gas appliances. As report in last week’s Update, this past May 18th, the EPA proposed to phase out the ENERGY STAR certification for natural gas furnaces and central air conditioners by December 30, 2024. The EPA states that this proposed action is consistent with the agency’s focus on electric heat pumps and their ability to deliver energy-efficiency gains, pollution reduction, and cost-savings to consumers. This analysis (attached)  provides data and context on the current space heating market to support the evaluation of the potential consequences of this proposal from the EPA. Click Here for the Full Report

Key Conclusions from the AGA Study

  • Only 41% of furnace shipments received the label in 2021, increasing from 26% in 2015 with a seven-year average of 31% from 2015 to 2021. Based on reported data from EPA and manufacturer shipment data, there is room for the program to grow, and the label still has not captured a significant portion of the market.

  • In addition to furnaces, ENERGY STAR gas appliances also include water heaters and dryers with a record 33% of sales using the label in 2021. ENERGY STAR gas tankless water heaters, which have the highest efficiency for gas, out-shipped heat pump water heaters at a pace of six to one.

  • Removing the ENERGY STAR label could lead to a decrease in adopting higher-efficiency gas equipment, as consumers may opt for lower-efficiency options due to first-cost burdens. Factors such as availability of natural gas service, cost savings, and regional differences influence consumer choices. Sixty percent of existing heat pumps are installed in homes that cannot connect to the natural gas system.

  • Income also influences the installation of HVAC systems, with fewer lower-income owners installing heat pumps than natural gas furnaces. Homeowners make the ultimate decision when it comes to maintaining their own homes and look for guidance from programs like ENERGY STAR, almost always on a budget.

  • Natural gas homes typically consume less energy than homes with high-efficiency electric air source heat pumps. A recent AGA analysis found that an ENERGY STAR-qualifying natural gas furnace energy costs $584 compared to $971 for a qualifying electric air-source heat pump.

Please feel free to share this Energy Insights analysis with the summary both inside and outside your organization as you deem appropriate.  As a reminder,  BECS Committee members are encouraged to submit comments on the proposal by the June 22, 2023 deadline to EPA at [email protected] and the information in this Energy Insights should be useful in responding to the EPA proposal.  

EPA Proposes to Eliminate ENERGY STAR Certification for Residential Fossil Fuel Boilers.
Following the May 18th EPA proposal to eliminate ENERGY STAR certification for residential fossil fuel furnaces, this week, EPA announced the release of the ENERGY STAR Residential Boilers Discussion Guide and invited feedback as they evolve the “ENERGY STAR program from its focus on traditional fossil fueled technologies to embrace emerging advances in efficiency”.   The EPA announcement proposes two actions: sunsetting the ENERGY STAR Boilers specification and launching a new specification to cover heat pump hydronic heating appliances, for which EPA and DOE will develop test methods. The discussion guide seeks “additional information that will inform development of a proposed test method and first draft specification.  EPA explains that ‘These actions reflect the unprecedented opportunity for the ENERGY STAR program to support the national transition to the most energy efficient equipment available. The opportunity arises through passage of the Inflation Reduction Act and availability of new efficient electric technologies on the US market. Our proposal also reflects the longstanding high market share of the boiler’s specification and the lack of additional cost-effective differentiation above current ENERGY STAR levels. The discussion guide covers each of these topics in more detail. “ EPA and DOE will host a webinar on June 21, 2023, from 2:30-4:30pm Eastern Time to engage with stakeholders on the content included in the discussion guide. To register for the webinar, click here. Stakeholders are requested to share written feedback with EPA and DOE by July 7, 2023, to [email protected].

State Codes Activity Update.

Attached is a weekly feature of the “Friday Update” covering state code calendar activities as presented by the online utility “Fiscal Note,” which is sponsored by APGA and AGA Code and Standards. Please review the update and determine if there are state code activities that impact your service territory or organization.