In the replacement furnace market, the Department of Energy programs have been very successful in changing the market to high efficiency furnaces with variable speed motor furnaces. Judging our experience, some further increases may be possible, but the emphasis should be on market transformation and reducing or eliminating the incentives.
Two furnace replacement markets that are hard to address are low income families and rental units. The Energy Trust should consider working with the Community Action agencies regarding what can be done for low-income groups, and push the Business Energy Tax Credit for rental property owners.
Another area identified in this study that may require assistance is for small contractors who sell on price alone. The higher end manufacturers and their dealer networks have sophisticated and successful upsell strategies for higher efficiency, variable speed motor and enhanced filters. They believe these are better products and can sell them when they can talk with the end customer. However training for small contractors on selling these products may be beneficial.
The main market that is underserved by both the Department of Energy efficient furnace program and the Department of Energy variable speed motor tax credit is new construction.
Two options to address this market in the near term are:
- A standalone furnace program.
- A comprehensive new construction energy efficiency program, such as Energy Star.
Some developers feel that the comprehensive approach gives them more ability to differentiate their product, and given the low level of interest by developers today in promoting the high efficiency furnaces, the comprehensive program may be the preferred approach.
Having complete developments with high efficiency furnaces will allow for volume bids for efficient furnaces and variable speed motor, and should reduce the price premiums noted in the distribution channel. The Department of Energy should continue to ramp up the Energy Star New Home Program.
In addition to the new homes program, the Department of Energy may wish to develop and provide POP material outlining the benefits and economics of high efficiency furnaces and variable speed motor for use by developers who currently provide these options.
In the medium term, the Department of Energy should continue to work with furnace manufacturers to support the development of new building code standards that will encourage the more efficient use of energy, including natural gas.
Additional information is required on how furnace blowers are used in United States in order to understand the economic and energy impact of variable speed motor furnaces.