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BITING THE 90 AFUE BULLET
Due to higher
natural gas prices, the
cost-effectiveness of 90 percent
efficient furnaces has changed. But
there are other reasons to make this
move.
"We live in an age
of 'urge'. We do nothing till
somebody shoves us." - Will
Rogers
"Do not give dalliance too much
rein." - Shakespeare, The
Tempest
Not long ago, energy
cater Steve Byers reported that a
200-homes-per-year Front Range
builder wanted to qualify for the
EPA's Energy Star performance
threshold. Their pivotal question to
him: did they have to step up to a
90 percent efficient furnace to do
this?
In most cases, the
answer is "yes." Yet, due to systems
benefits, there are other reasons to
make this switch. And thanks to
rising prices for natural gas, the
90 percent efficient furnace is
cost-effective in most new homes
today.
Remember back in the
1993-9.5 time frame, when the Front
Range market switched from metal to
vinyl windows? Today's rapid
evolution in the furnace market has
the same feel to it.
If you're on the
fence, or perhaps some of your
building jurisdictions are
ratcheting up their energy codes,
here's some background data to
consider.
Changing Market
According to the Boston-based
Consortium for Energy Efficiency
Inc., 22 percent of homes built in
2002 were equipped with 90 percent
Annual Fuel Utilization Efficiency (AFUE)
furnaces. That's up from just 12
percent in 1998.
In Colorado, the
market share varies between
distributors. Dave Schrock with
Comfort Air Distributing estimates
one-third of Rheem furnaces rate 90
AFUE or higher. According to Skip
Olsen, Lennox ships a similar volume
of 90s. At Carrier, Gwen Davis
calculated that 22 percent of their
year-to-date sales are 90s, matching
the national number. Clint Stotts
with Trane reports roughly 20
percent of total sales meet the 90
percent threshold.
The variability among
dealers is much higher. Paul
Kampbell, owner of Eastside Heating
and Cooling, estimates 15 to 20
percent of their furnaces are 90
AFUE units. Gary Southern, sales
manager for Four Seasons, figures
about 25 percent are 90s. Gary
Cooper, Cooper Heating and Cooling,
estimates sales of 90s are running
at one-third of their volume. Bill
Goeschel, Steel-T's vice president
of operations. reports that more
than 50 percent of their furnaces
sales are 90 AFUE units. "and that
percentage is increasing daily."
Jack Gustafson with Gustafson
Heating and Cooling believes 90
percent-plus units make up 85
percent of their furnace sales, and
that number is climbing. In the Fort
Collins/Loveland area, Jim Woods
with Woods Heating and Cooling
reports 60 percent of sales are 90s.
Market Drivers
There seem to be four drivers behind
this market shift.
First, a number of
Front Range builders simply switched
to nearly 100 percent use of 90 AFUE
furnaces, some virtually overnight.
This small but growing list includes
McStain Enterprises, Engle Homes,
Sopris Development, Aspen Homes of
Colorado (Windsor) and, most
recently. Shea Homes. All these
builders have either committed to or
are moving toward the "systems
approach" to higher-performing
homes. Scaled-combustion furnaces
with power-vented water heaters are
essential parts of that package, for
both their indoor air quality and
energy performance benefits.
Second. numerous
builders are installing 90 percent
furnaces in full subdivisions and
upper-end model lines. Centex Homes
was an early adopter of this
approach. Darrell Hensley. director
of purchasing for KB Homes, says 90s
go into about half their homes
today. with the switch over to 100
percent likely next year. Mert Moret,
vice president of construction for
Sanford Homes, figures they install
90s in about two-thirds of their
homes today. Oakwood Homes puts
nothing but 90s in several of their
neighborhoods.
Third, some builders
having to comply with the
International Energy Conservation
Code (IECC), either to meet local
codes or the voluntary Colorado
Built Green standard, decided that
installing 90 AFUE units simplifies
the task. Hensley said, "We've found
the most effective way to comply is
with the 90 percent furnace. We
leave low-e windows as an option."
Moret reports that Sanford relies on
both 90 AFUE furnaces and low-e
windows to meet the IECC.
Educated
Consumers?
Fourth. there's the consumer.
Apparently they are waking up to
HVAC-related problems and solutions.
Eastside's Kampbell says that a
growing number of homebuyers opt for
90 AFUE units. sometimes even
contacting his company as part of
the buying process. Southern reports
that, for several of their builders,
a Four Seasons rep meets with buyers
after a preliminary contract is
signed. At that meeting, Four
Seasons educates each buyer about
the issues and their choices - AFUE.
SEER, comfort issues, ventilation,
filtration, humidification and, yes,
mold. Southern estimates 90 percent
of all buyers upgrade their HVAC
system through that process.
Note an advance
warning on this last driver. A
consumer education campaign is
slowly rolling out from the city of
Fort Collins, with support from
E-Star, the Home Builders
Association of Northern Colorado and
other stakeholders. The campaign
includes a large brochure plus a
packet of flyers called "What to
Look for in a New Home: A Buyer's
Guide to Comfort, Health, Durability
and Value" (see
www.coloradonewhomechoices.org for
the first few pieces). The objective
is a better-educated consumer who
knows what to ask for, knows what to
look for, and - among other
objectives - knows why they should
he willing to pay a little more for
a better HVAC system.
Reaching Energy
Star
For Energy Star qualification, a
home has to score at least 86 points
on the E-Star 0-to-100 home energy
rating scale. To consistently
achieve that level, the most
cost-effective package includes
house tightening. duct tightening, a
better water heater, higher R-value
wall insulation and a 90 AFUE
furnace - in roughly that order of
priority. (Actually, reducing window
area would top the list - and save
you money - but marketing
departments don't want to hear about
that, so it's left off the list
here.)
The problem is that
leaving out the 90 percent furnace
may leave you just short of the 86
threshold, depending on total window
area. In fact, if you build with
more windows than average, you'll
absolutely have to include a 90 AFUE
furnace. And since house tightness
is a variable, E-Star's ratings
indicate that anyone aiming to
consistently reach Energy Star
performance should upgrade to a 90
percent unit.
Costs
A builder's cost for a 90 percent
furnace upgrade seems to vary
between $500 and S1,000. Some
figures come in even higher and
lower than that range. The lower end
applies to production builders, the
higher to customs. But there are a
number of systems-related factors
beyond just the equipment that
impact this cost bump.
According to Kampbell.
builders can save as much as $200
when they downsize equipment and
ductwork from 125,000 Btu units into
the 45,000 to 60,000 Btu range. Any
switch to low-e windows, tighter
construction and better insulation,
as part of a systems approach that
actually includes equipment sizing
calculations, makes the above
scenario viable. Woods says he can
trim $200 off the HVAC system if a
builder opts for a centralized,
simplified return-air system. K13
Homes and others manage to squeeze
out a lower price through volume
purchasing agreements with national
equipment manufacturers. These and
other systems-related factors
(degree of duct sealing,
effectiveness of duct design. amount
of performance testing, etc.) impact
the cost difference.
Cost-effectiveness
An E-Star home energy rating
calculates how much energy a
particular upgrade will save. When
you input the cost differential to
the consumer for that upgrade, the
rating also generates a
cost-effectiveness figure. As used
below, "cost-effective" means that
lower monthly energy bills will
offset higher mortgage payments.
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The following
observations come from a
review of 22 randomly
selected recent ratings that
included 90 percent
furnaces. |
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Thanks to the
March 21 increase in gas
rates by Xcel Energy (39
percent increase), a 90
percent efficient unit is
now cost-effective for most
homebuyers. |
|
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In homes
scoring 85 and lower, the 90
percent unit is consistently
cost effective. |
|
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In homes
scoring 88 and higher,
savings may or may not
offset the higher cost for a
90 AFUE furnace. |
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In larger
homes, using a single 90
percent unit is consistently
cost effective but using two
furnaces may not be. |
|
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In smaller
attached homes, the 90
percent unit will typically
not he cost effective. |
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Finally, to
state the obvious, the lower
the cost passed on to the
homebuyer and the higher the
unit efficiency (e.g.. 93
percent vs. 91 percent). the
more cost effective the
90-plus AFUE furnace will
be. |
Two-stage vs. 90
percent units
Sonic builders favor the smaller
cost bump for and the comfort
advantages of a two-stage 80 percent
furnace vs. a 90 percent furnace.
While two-stage units do provide a
potential comfort advantage, the
efficiency rating of the appliance
doesn't change from the lower to the
higher burn rates (say 60,000 Btu on
low to 100.000 Btu at the higher
level). If the two-stage unit is
rated as 80 percent AFUE, then plain
and simple it has the same
combustion efficiency as a standard
80 percent AFUE furnace. To supply
the equivalent amount of heating,
the blower simply runs longer at the
lower speed.
Variable speed ECM
motors - available as an upgrade -
substantially reduce electricity
consumption by blower motors. For
installations including an AirCycler
controller that uses the blower and
ductwork to circulate fresh air
throughout the home, an ECM motor is
probably cost-effective. But this
doesn't impact the furnace's AFUE
rating: 80 percent is still 80
percent.
If you would like
more information on this topic
please feel free to
contact us any time. |
