New furnace is about to get more expensive

Homeowners facing the prospect of a new furnace will soon have fewer and costlier choices.

The only options in Minnesota and 29 other Northern states will be furnaces with 90 percent efficiency or better, under new rules from the U.S. Department of Energy. Contractors won't be allowed to put in less-efficient models after May 1.

The biggest effect will be on owners of townhouses, condos and single-family homes with furnaces in interior rooms. More-efficient furnace models typically vent out the side wall of a residence, which in some installations can significantly run up the job's cost.

That was part of the thinking for Phil Kowitz of Coon Rapids, who decided to replace the 18-year-old furnace in his townhouse with an 80-percent-efficiency model before the law change.

"They would have had to put a PVC pipe through my bedroom ceiling, and I would've had to pay $1,000 more for the labor and higher-efficiency furnace." As for the energy savings he gave up, Kowitz said his heating bills aren't very high anyway.

For other homeowners, the rules simply write into law what has long been standard practice. Builders have installed high-efficiency furnaces in virtually all new single-family homes and townhouses built in Minnesota since 2000.

For older homes, most Twin Cities homeowners have been replacing furnaces with high-efficiency models for years, said Bob Cronin, general manger at Action Heating and Air in Spring Lake Park.

Local furnace distributors are cautious about ordering furnaces with efficiencies under 80 percent now, because it's impossible to say how many people will rush to get the less efficient models.

"It's a dart shoot," said Tom Nemo, territory manger for Carrier furnace distribution. He expects to beef up 80-percent-efficient furnace inventory by about 10 percent. "There could be a huge demand for them in townhomes and condos," he said.

Allan Hoffman, Kowitz's neighbor in the same townhouse complex, opted for a high-efficiency model. He figured it might make his home easier to sell.

He also took advantage of rebates, which might be lower next year. Although a more complicated installation for the high-efficiency model had the potential to cost him about $400 more, Hoffman negotiated a deal without extra installation costs since several neighbors were replacing their furnaces at the same time.

One problem for townhouse owners is that some homeowner associations don't allow side venting of PVC pipes due to aesthetics, and homes where the furnace is in an interior room often require complicated installations adding between $1,000 and $4,000 to the cost, said Jonathan Melchi, director of government affairs at Heating and Air Conditioning Distributors International.

Sedgwick Heating and Air Conditioning in Mendota Heights is already running ads advising consumers of other potential challenges, including extra space needed for a high-efficiency condensing furnace and changes to venting.

On its website, Sedgwick urges homeowners who might incur extra installation costs to consider replacing an older, standard-efficiency furnace with another standard-efficiency furnace before the law goes into effect.

Homeowners opting for a high-efficiency furnace generally pay about $1,500 more than for a standard furnace, said Cronin, but nearly a third of the extra cost has been negated by rebates or tax incentives and the rest of the overall cost is reduced by lower gas bills. Installing a 90-percent-efficient furnace instead of an 80-percent model can save nearly $400 a year in utility costs.

Some heating and air conditioning distributors and contractors are asking for an 18-month extension of the May 1 law, but no decision has been made on that request, said Lindsey Geisler at the Department of Energy.

The general public has had little response to the new law so far, mostly from lack of awareness, said Greg Olson, residential trade manager at Xcel Energy. He doesn't see the new law as causing big problems, except for places where a high-efficiency furnace installation would be difficult.