Lawrence Berkeley National Laboratory

Residential space and water heating accounts for over 90percent of total residential primary gas consumption in the United States. Condensing space and water heating equipment are 10-30percent more energy-efficient than conventional space and water heating. Currently, condensing gas furnaces represent 40 percent of shipments and are common in the Northern U.S. market. Meanwhile, manufacturers are planning to develop condensing gas storage water heaters to qualify for Energy Star? certification. Consumers, installers, and builders who make decisions about installing space and water heating equipment generally do not perform an analysis to assess the economic impacts of different combinations and efficiencies of space and water heating equipment. Thus, equipment is often installed without taking into consideration the potential life-cycle economic and energy savings of installing space and water heating equipment combinations. Drawing on previous and current analysis conducted for the United States Department of Energy rulemaking on amended standards for furnaces and water heaters, this paper evaluates the extent to which condensing equipment can provide life-cycle cost-effectiveness in a representative sample of single family American homes. The economic analyses indicate that significant energy savings and consumer benefits may result from large-scale introduction of condensing water heaters combined with condensing furnaces in U.S. residential single-family housing, particularly in the Northern region. The analyses also shows that important benefits may be overlooked when policy analysts evaluate the impact of space and water heating equipment separately.