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CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM 

INTERESTED PARTIES, AND DEPARTMENT OF ENERGY RESPONSES

TABLE OF CONTENTS

2.1 INTRODUCTION ............................................................................................... 2-1

2.2 BACKGROUND ................................................................................................. 2-2

2.2.1 Rulemaking Schedule .......................................................................................... 2-3

2.3 MARKET AND TECHNOLOGY ASSESSMENT............................................ 2-4

2.3.1 Scope of Coverage ............................................................................................... 2-5

2.3.2 Product Classes.................................................................................................. 2-14

2.3.3 Market Assessment ............................................................................................ 2-18

2.3.4 Technology Assessment..................................................................................... 2-20

2.4 SCREENING ANALYSIS ................................................................................ 2-24

2.5 ENGINEERING ANALYSIS............................................................................ 2-25

2.5.1 Baseline Models................................................................................................. 2-27

2.5.2 Manufacturing Cost Analysis ............................................................................ 2-28

2.6 MARKUPS ANALYSIS ................................................................................... 2-28

2.7 ENERGY USE ANALYSIS.............................................................................. 2-30

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS ....................... 2-34

2.9 SHIPMENTS ANALYSIS ................................................................................ 2-37

2.10 NATIONAL IMPACT ANALYSIS.................................................................. 2-38

2.10.1 National Energy Savings Analysis..................................................................... 2-40

2.10.2 Net Present Value Analysis ............................................................................... 2-40

2.11 CONSUMER SUBGROUP ANALYSIS .......................................................... 2-41

2.12 MANUFACTURER IMPACT ANALYSIS...................................................... 2-42

2.13 EMPLOYMENT IMPACT ANALYSIS........................................................... 2-43

2.14 UTILITY IMPACT ANALYSIS....................................................................... 2-43

2.15 EMISSIONS ANALYSIS.................................................................................. 2-44

2.15.1 Carbon Dioxide.................................................................................................. 2-45

2.15.2 Sulfur Dioxide.................................................................................................... 2-45

2.15.3 Nitrogen Oxides................................................................................................. 2-46

2.15.4 Mercury.............................................................................................................. 2-46

2.15.5 Particulate Matter............................................................................................... 2-46

2.16 MONETIZATION OF EMISSIONS REDUCTION BENEFITS ..................... 2-47

2.17 REGULATORY IMPACT ANALYSIS ........................................................... 2-48

LIST OF TABLES

Table 2.3.1: Product Classes.......................................................................................... 2-17
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CHAPTER 2. ANALYTICAL FRAMEWORK, COMMENTS FROM 

INTERESTED PARTIES, AND DEPARTMENT OF ENERGY RESPONSES

2.1 INTRODUCTION

The Energy Policy and Conservation Act (EPCA), as amended (42 USC 6291 et. seq.)

The analyses performed as part of the preliminary analysis stage and reported in this 

preliminary technical support document (TSD) are listed below. 

, 

requires that when prescribing new or amended energy conservation standards for covered 

products, the U.S. Department of Energy (DOE) must promulgate standards that achieve the 

maximum improvements in energy efficiency that are technologically feasible and economically 

justified. (42 U.S.C. 6295(o)(2)(A)) This chapter provides a description of the analytical 

framework that DOE is using to evaluate new energy conservation standards for residential 

furnace fans. This chapter sets forth the methodology, analytical tools, and relationships among 

the various analyses that are part of this rulemaking. 

• A market and technology assessment to characterize the relevant products, their markets,

and technology options for improving their energy efficiency, including prototype 

designs.

• A screening analysis to review each technology option and determine if it is 

technologically feasible; is practicable to manufacture, install, and service; would 

adversely affect product utility or product availability; or would have adverse impacts on 

health and safety.

• An engineering analysis to develop relationships that show the manufacturer’s cost of 

achieving increased efficiency.

• A markups analysis to develop distribution channel markups that relate the manufacturer 

production cost (MPC) to the cost to the consumer.

• An energy use analysis to determine the annual energy use of the considered products in 

a representative set of users.

• A life-cycle cost (LCC) and payback period (PBP) analysis to calculate the savings in 

operating costs at the consumer level throughout the life of the covered products 

compared with any increase in the installed cost for the products likely to result directly 

from imposition of a standard.

• A shipments analysis to forecast product shipments, which are then used to calculate the 

national impacts of standards on energy, net present value (NPV), and future 

manufacturer cash flows.

• A national impact analysis (NIA) to assess the aggregate impacts at the national level of

potential energy conservation standards for the considered products, as measured by the 

NPV of total consumer economic impacts and the national energy savings (NES).
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• A preliminary manufacturer impact analysis (MIA) to assess the potential impacts of 

energy conservation standards on manufacturers’ capital conversion expenditures, 

marketing costs, shipments, and research and development costs.

In the subsequent Notice of Proposed Rulemaking (NOPR), DOE will present the tentative 

results of the above analyses, incorporating any revisions to the analyses based on comments and 

new information received. DOE will also present tentative results of the following additional 

analyses in the NOPR:

• A consumer subgroup analysis to evaluate variations in customer characteristics that 

might cause a standard to affect particular consumer sub-populations (such as lowincome households) differently than the overall population.

• An MIA to estimate the financial impact of standards on manufacturers and to calculate 

impacts on competition, employment, and manufacturing capacity.

• An employment impact analysis to assess the aggregate impacts of the considered

standards on national employment.

• A utility impact analysis to estimate selected effects of the considered standards on 

electric utilities.

• An emissions analysis to assess the effects of the considered standards on emissions of 

carbon dioxide (CO2), nitrogen oxides (NOx), and mercury (Hg).

• An emissions monetization that estimates the economic value of reductions in CO2 and 

NOX emissions from the considered standards.

• A regulatory impact analysis (RIA) to evaluate alternatives to amended energy 

conservation standards in order to assess whether such alternatives could achieve 

substantially the same regulatory goal at a lower cost.

2.2 BACKGROUND

EPCA grants DOE authority to consider and prescribe new energy conservation standards 

or energy use standards for electricity used for purposes of circulating air through duct work. . 

(42 U.S.C. 6295(f)(4)(D)) DOE interprets this statutory language to allow DOE to regulate the 

electricity use of any electrically-powered device used in residential central heating, ventilation,

and air-conditioning (HVAC) systems for the purpose of circulating air through duct work. 

DOE developed this analytical framework and documented its findings in the 

Rulemaking Framework for Furnace Fans (June 1, 2010). On June 3, 2010, DOE published the 

Notice of Public Meeting and Availability of the Framework Document for furnace fans in the 

Federal Register. 75 FR 31323. In conjunction, DOE posted the Framework Document to the 
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DOE website.1 DOE presented the analytical approach to interested parties during a public 

meeting held on June 18, 2010. 

In response to the publication of the Framework Document and the Framework public 

meeting, DOE received numerous comments from interested parties regarding DOE’s analytical 

approach. This chapter (chapter 2) of the preliminary TSD summarizes the key comments DOE 

received from interested parties and presents DOE’s responses to those comments. . In addition, 

in subsequent sections of this chapter, DOE has summarized any significant changes in analytical 

approach made since publishing the Framework Document that DOE used in its preliminary 

analyses. Lastly, in the Executive Summary of the preliminary TSD, DOE identified a number of 

issues on which DOE seeks public comment. DOE has explained each of those issues in the 

relevant analytical sections below.

2.2.1 Rulemaking Schedule

In the Framework Document, DOE stated that it would not be conducting a preliminary 

analysis for this rulemaking. Instead, DOE planned to use a straight-to-NOPR schedule to align 

with the publication dates of associated rulemakings for residential furnaces and boilers, and 

central air conditioners (CAC) and heat pumps.2

The Northeast Energy Efficiency Partnership (NEEP) and Adjuvant Consulting, Inc. 

(Adjuvant) urged DOE to conduct a preliminary analysis and publish a preliminary analysis TSD 

for this rulemaking. (NEEP, No. 16 at p. 2 and Adjuvant, No. 9 at p. 4)

3

 NEEP added that DOE 

should publish the preliminary analysis TSD well in advance of the NOPR so that interested 

parties are able to carefully review the analysis DOE will use to propose efficiency levels. NEEP 

also urged DOE to accelerate the furnace fan rulemaking to align with the 2016 compliance dates 

of the associated rulemakings for residential furnaces and CAC. NEEP believes doing so would 

minimize disruptions to the industry and capitalize on an energy saving opportunity sooner. 

(NEEP, No. 16 at p. 2) 

On January 15, 2010, interested parties submitted a joint comment to DOE's residential 

furnaces and central air conditioners and heat pumps rulemakings recommending adoption of a 

package of minimum energy conservation standards for residential central air conditioners, heat 

pumps, and furnaces, as well as associated compliance dates for such recommended standards 

(the "Consensus Agreement"). The Consensus Agreement represents a negotiated agreement 

 

1 The June 1, 2010 furnace fan Framework Document is available at the following link: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/furnace_fans_framework.html 2 Information regarding the DOE rulemaking activities for residential furnaces and boilers, and residential central air 

conditioners and heat pumps is available at the following links, respectively: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/furnaces_boilers.html and 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/residential_cac_hp.html

3 A notation in this form provides a reference for information that is in the docket of DOE’s rulemaking to develop 

energy conservation standards for furnace fans (Docket No. EERE-2010-BT-STD-0011), which is maintained at 

www.regulations.gov. This notation indicates that the statement preceding the reference is document number 16 in 

the docket for the energy conservation standards rulemaking for furnace fans, and appears at page 2 of that 

document.
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among a variety of interested parties, including manufacturers and environmental and efficiency 

advocates. The original agreement was completed on October 13, 2009 and had 15 signatories.

Upon receiving the Consensus Agreement and analyzing the recommended energy conservation 

standards contained in the agreement, DOE published a direct final rule amending the energy 

conservation standards for residential furnaces, central air conditioners, and heat pumps on June 

27, 2011. 76 FR 37408. DOE simultaneously published a notice of proposed rulemaking,

accepting public comments on the adopted standards until October 17, 2011. 76 FR 37549 (June 

27, 2011). Upon consideration of the comments received, DOE published a final rule confirming

the energy conservation standard levels adopted in the direct final rule as the Federal standard 

levels for residential furnaces and residential central air conditioners and heat pumps. 76 FR 

67037 (Oct. 31, 2011). Compliance with the standards established in the final rule is required

starting May 1, 2013 for non-weatherized furnaces, and January 1, 2015 for weatherized furnaces 

and central air conditioners and heat pumps.

The Consensus Agreement did not include recommended minimum energy conservation 

standards or compliance dates for furnace fans. Consequently, the original rulemaking schedules 

for the associated rulemakings changed, and DOE decided to set the furnace fan rulemaking

schedule separately. Instead of coordinating with the rulemaking schedules of associated 

standards, DOE plans to complete this rulemaking by the statutory deadline outlined in EPCA, 

December 31, 2013. (42 U.S.C. 6295(f)(4)(D)) DOE decided that adherence to a rulemaking 

schedule that will meet the statutory deadline (December 31, 2013) provides adequate time to 

conduct a preliminary analysis. DOE agrees with interested parties that publication of a 

preliminary analysis TSD will provide DOE with the ability to further investigate the product 

and provide interested parties with additional opportunities to comment. Therefore, DOE 

conducted a preliminary analysis and is publishing this preliminary analysis TSD.

2.3 MARKET AND TECHNOLOGY ASSESSMENT

When DOE begins an energy conservation standards rulemaking, it develops information 

that provides an overall picture of the market for the products considered, including the nature of 

the products, market characteristics, and industry structure. This activity consists of both 

quantitative and qualitative efforts based primarily on publicly-available information. The 

market assessment examined manufacturers, trade associations, and the quantities and types of 

products offered for sale.

DOE recognizes that there may be limited public information on national shipments, 

manufacturing costs, channels of distribution, and manufacturer market shares of furnace fans. 

This type of data is an important input for analyses that determine if energy conservation

standards are economically justified and will result in significant energy savings. Therefore, 

DOE encourages interested parties to submit data that will improve DOE’s understanding of the 

furnace fan market. These data may be provided under a confidentiality agreement with DOE’s 

contractor responsible for this part of the rulemaking analysis, Navigant Consulting, Inc. (NCI). 

In other rulemakings, NCI works with confidential data provided by manufacturers and other 

organizations in preparing aggregated results for DOE’s analysis. These aggregated results do 

not divulge the sensitive, individual raw data, but enable other interested parties to comment on 

the aggregated dataset.
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Alternatively, interested parties may submit confidential data to DOE, indicating in 

writing which data should remain confidential. Interested parties must submit confidential 

information to DOE according to the procedures outlined in 10 CFR 1004.11. Pursuant to 10 

CFR 1004.11, any person submitting information that he or she believes to be confidential and 

exempt by law from public disclosure should submit two copies. One copy of the document shall 

include all the information believed to be confidential, and the other copy shall have the 

information believed to be confidential deleted. DOE will make its own determination about the 

confidential status of the information and treat it accordingly.4

DOE reviewed relevant literature and interviewed manufacturers to develop an overall 

picture of the residential furnace fan industry in the United States. Industry publications and 

trade journals, government agencies, and trade organizations provided the bulk of the 

information, including: (1) manufacturers and their market shares; (2) shipments by product type 

(e.g., non-weatherized gas furnace, oil furnace, hydronic air-handler); (3) product information;

and (4) industry trends. The analyses developed as part of the market and technology assessment 

are described in chapter 3 of the TSD.

2.3.1 Scope of Coverage

EPCA grants DOE authority to consider and prescribe new energy conservation standards 

or energy use standards for electricity used for purposes of circulating air through duct work. (42 

U.S.C. 6295(f)(4)(D)) In the Framework Document, DOE tentatively interpreted this EPCA 

language to allow DOE to cover the electricity used by any electrically-powered device used in a 

residential, central HVAC system for the purpose of circulating air through duct work. 

Consequently, DOE tentatively defined a “residential furnace fan” as any electrically powered 

device used in a residential central HVAC system for the purpose of circulating air through duct 

work. DOE described a typical furnace fan as consisting of a fan motor and its controls, a 

centrifugal impeller, and sheet metal housing. DOE sought comment on including gas furnaces, 

oil furnaces, electric furnaces, CAC air handlers, and modular blowers in the scope of coverage. 

DOE also sought comment on excluding draft inducer fans, exhaust fans, heat recovery 

ventilators (HRV), and energy recovery ventilators (ERV) from the scope of coverage, because 

inducer fans do not circulate air through duct work, and these products were excluded from the 

scope of the December 2009 draft of Canadian Standard Association (CSA) C823, Performance 

Standard for Air Handlers in Residential Space Conditioning Systems. DOE also requested 

comment on whether other products, such as small-duct, high-velocity (SDHV) and through-thewall systems should be included in the scope of coverage of this rulemaking.

 

4

 Factors that DOE considers when evaluating requests to treat submitted information as confidential include: (1) a 

description of the items; (2) whether and why such items are customarily treated as confidential within the industry; 

(3) whether the information is generally known by or available from other public sources; (4) whether the 

information has previously been made available to others without obligation concerning its confidentiality; (5) an 

explanation of the competitive injury to the submitting person which would result from public disclosure; (6) a date 

after which such information might lose its confidential character; and (7) why disclosure of the information would 

be contrary to the public interest.
2-6

Interested parties commented on the use of the term “furnace fan,” DOE’s tentative 

definition, and the list of components that constitute a furnace fan. The Northwest Energy 

Efficiency Alliance (NEEA) and Natural Resources Defense Council (NRDC) recommended that 

DOE use the term “air handler” instead of “furnace fan.” NRDC stated that the term “furnace 

fan” unnecessarily restricts the product category and could be confusing. (NEEA, No. 11 at pp. 

1-2; NRDC, No. 28 at p. 2) NEEA and the American Council for an Energy Efficient Economy

(ACEEE) added that the definition of “furnace fan” should include the HVAC product cabinet. 

(NEEA, No. 11 at pp. 1-2; ACEEE, No. 19 at p. 3) NRDC commented that DOE should not 

restrict the definition of “furnace fan” to a specific impeller type or material. (NRDC, No. 28 at 

p. 5) Regal Beloit agreed with NRDC, stating that the furnace fan description should allow for 

housings that are made of non-metal materials. (Regal Beloit No. 32 at p. 2) 

DOE plans to use the term “furnace fan” to remain consistent with the Energy 

Independence and Security Act of 2007 (EISA 2007) language that amends EPCA to set the 

statutory deadline of December 31, 2013 for this rulemaking. In addition, DOE plans to use the 

definition presented in the Framework Document. DOE believes this definition clearly states that

DOE does not plan to limit the scope of coverage of this rulemaking to circulation fans used in 

furnaces. DOE does not believe that the use of the term “air handler” will provide any additional 

clarity because air handlers can include electricity-consuming components other than the 

circulation fan, such as inducer fans and electric resistance heating coils. The electricity 

consumption of these other components is outside the scope of coverage of this rulemaking. 

DOE is aware that the airflow path design of the HVAC product cabinet impacts furnace fan 

performance. DOE accounted for these impacts in the proposed test procedure and in the 

preliminary analysis and plans to continue to account for these impacts in the NOPR. DOE is 

also aware that furnace fans can use different types of impellers, as well as a number of different 

materials for furnace fan components. Therefore, for the preliminary analysis, DOE did not limit 

the definition to specific impeller types or materials. DOE considered a typical furnace fan as 

consisting of a fan motor and its controls, an impeller, and a housing, all of which are 

components of an HVAC product that includes additional components, including the cabinet. 

Comments received and DOE’s approach regarding the scope of coverage are discussed in more 

detail in the following paragraphs.

Some interested parties disagreed with DOE’s approach in this rulemaking in terms of 

setting component-level regulations, as opposed to system-level regulations. Morrison and the 

Air-Conditioning, Heating and Refrigeration Institute (AHRI) commented that regulating a 

component (furnace fan) of a larger system (HVAC product) may lead to a suboptimal system. 

AHRI stated that standards set for entire systems are, therefore, more appropriate for achieving 

energy savings. (Morrison, No. 26 at p. 1; AHRI, No. 7 at p. 102) Ingersoll Rand agreed, stating 

that DOE should focus on systems, not components. (Ingersoll Rand, No. 7 at pp. 36-37) Rheem 

explained that furnace fans in higher-efficiency furnaces consume more electricity. According to 

Rheem, more "fan watts" are necessary to achieve turbulent flow, which increases heat transfer. 

Rheem added that the fan must also consume more electricity to overcome the added external 

static pressure (ESP) of more complex and additional condensing heat exchangers. Therefore, 

Rheem is concerned that regulating furnace fans separately, which ignores thermal performance, 

could be an issue. (Rheem, No. 7 at p. 112)
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Other interested parties supported regulating components of larger systems. NEEP and 

Adjuvant stated that they support setting standards for components of systems that may be 

regulated by other standards, because furnace fans may be used in a large number of applications 

other than in furnaces and CAC. (NEEP, No. 16 at p. 2; Adjuvant, No. 7 at pp. 118-120) NEEP 

suggested DOE determine the prevalence of furnace fans in all central HVAC applications as 

part of its analysis for this rulemaking. NEEP added that, even though the seasonal energy 

efficiency ratio (SEER) metric accounts for energy used by the fan, the metric does not account

for, or reward, gains in furnace fan efficiency. NEEP explains that a manufacturer could improve 

fan efficiency to meet a minimum SEER standard while ignoring opportunities to improve 

system efficiency through other components. NEEP believes a stand-alone furnace fan standard 

would ensure that higher SEER values are achieved by improving core functions not just the 

furnace fan. (NEEP, No. 16 at p. 2)

In response, DOE is required by EPCA to consider and prescribe new energy 

conservation standards or energy use standards for electricity used for purposes of circulating air 

through duct work. (42 U.S.C. 6295(f)(4)(D)) Pursuant to this statutory mandate, DOE plans to 

establish energy conservation standards for circulation fans used in residential central HVAC 

systems. DOE is aware that component-level regulations could have system-level impacts. DOE 

plans to conduct its analyses and set standards in such a way that meets the statutory 

requirements set forth by EPCA without ignoring system effects, which could possibly 

compromise the thermal performance of the HVAC products that incorporate furnace fans. For 

example, the proposed test procedure specifies that the furnace fan be tested while installed in 

the HVAC product, thereby enabling the rating metric to account for system effects on airflow 

delivery and, ultimately, energy performance. In addition, the product class structure allows for 

differentiation of products with higher thermal efficiency, such as condensing furnaces.

Many interested parties, including AHRI, Ingersoll Rand, Rheem, Lennox and Morrison,

suggested that DOE limit the scope of coverage of the furnace fan rulemaking to distribution 

fans used in gas, oil, and electric furnaces. (AHRI, No. 20 at p. 7; Ingersoll Rand, No. 25 at p. 1;

Rheem, No. 29 at p. 2; Lennox, No. 23 at p. 1; Morrison, No. 26 at p. 2) AHRI, Ingersoll Rand,

and Morrison stated that the electrical consumption of fans used in split-system and packaged 

CAC and heat pump air handlers, modular blowers, SDHV systems and through-the-wall 

systems are already regulated through the use of the SEER and heating seasonal performance 

factor (HSPF) rating metrics. (AHRI, No. 20 at p. 2; Ingersoll Rand, No. 25 at p. 1; Morrison, 

No. 26 at p. 2) Rheem also echoed that the scope of coverage should not include split-system 

and packaged central air-conditioners and heat pump air handlers or modular fan coils. (Rheem, 

No. 29 at p. 1) AHRI commented that, conversely to the CAC standard metrics, the residential 

furnaces rating metric, annual fuel utilization efficiency (AFUE), only accounts for the gas and 

oil energy consumption of the furnace, and that the DOE test procedure for residential furnaces 

does not provide a mechanism to account for the electrical consumption or efficiency of the fan 

in the AFUE metric. AHRI added that the insertion of the statutory language under 42 U.S.C. 

6295(f), titled “Standard for furnaces and boilers,” indicates that the scope of the requirements 

outlined therein only pertains to motor and blower combinations used in residential, warm-air 

furnaces. According to AHRI, if the intent of the rulemaking is to include circulation fans used in 

CAC air handlers, then a corresponding paragraph should have been added in the statute titled 

“Standards for central air conditioners and heat pumps.” (AHRI, No. 20 at p. 2) Further, 

Ingersoll Rand stated that including CAC air handlers in this rulemaking could lead to double 
2-8

counting of the energy consumption of the fans used in those products. (Ingersoll Rand, No. 7 at 

p. 26) AHRI also stated that this standard should not apply to the air-conditioning functions of 

the furnace fan. (AHRI, No. 7 at p. 118) Lennox stated that it supports AHRI’s position 

regarding the scope of coverage of products. (Lennox, No. 23 at p. 1)

In contrast, other interested parties believe that fans used in non-furnace products should 

be included in the scope of coverage of this rulemaking. NEEP and the American Gas 

Association (AGA) expressed support of the tentative scope of coverage outlined in the 

Framework Document, which included circulation fans used in split-system and packaged 

CAC/heat pump products and modular blowers, in addition to circulation fans used in furnaces. 

(NEEP, No. 16 at p. 1; AGA, No. 14 at p. 1) AHRI commented that if modular fan coils are to 

be covered, then a corresponding change to the definition of “furnace,” or the addition of a 

product class along with changes to the test procedure, are required. (AHRI, No. 20 at p. 2)

ACEEE and AGA emphasized that electric air handlers/furnaces should be included in the scope 

of coverage. (ACEEE, No. 19 at p. 3) (AGA, No. 14 at p. 1) NEEA commented that air handlers 

that are part of heat pump systems, fossil fuel furnaces, electric furnaces, mobile home furnaces,

and hydronic systems should be included. (NEEA, No. 24 at p. 2) NRDC stated that DOE 

should include all HVAC fans in the rulemaking to prevent confusion. (NRDC, No. 28 at p. 2)

Based on the statutory language in EPCA, ACEEE strongly recommended that DOE not limit the 

scope of the standard to only furnaces. Instead, ACEEE suggested that DOE use the more 

descriptive term “residential air handler,” as opposed to furnace fan. ACEEE added that industry 

shipment data suggest that 32% of residential air handlers are not furnaces, but serve heat pumps. 

According to ACEEE, RECS data suggest that 73% of single-family homes with forced-air 

heating have furnaces, with the rest divided between heat pumps and electric furnaces. Thus, 

ACEEE concluded that, although most fans are sold as components of furnaces, very substantial 

minorities are designed, built, sold, and installed in air handlers supporting heat pump and 

electric furnace installations. (ACEEE, No. 19 at pp. 1-2)

Adjuvant Consulting stated that hydronic air handlers, which incorporate a blower and 

hydronic heat exchanger supplied with hot and cold water, should also be covered. (Adjuvant, 

No. 9 at p. 5 and Public Meeting Trascript, No. 7 at pp. 38-39) NRDC agreed with Adjuvant and 

commented that it is DOE’s responsibility to regulate hydronic air handlers. (NRDC, Public

Meeting Transcript, No. 7 at pp. 43-44) Rheem agreed with Adjuvant that many air handlers are 

being used in hydronic systems, but hydronic air handlers should not be included in the 

rulemaking. (Rheem, No. 29 at p. 1) (Rheem, Public Meeting Transcript, No. 7 at pp. 35-36) 

AHRI commented that the hydronic system described by Adjuvant seems like a multi-family 

system and is not within the scope of this rulemaking. (AHRI, Public Meeting Transcript, No. 7

at p. 39) Mortex stated that hydronic systems are field application systems. Mortex stated further 

that it will be difficult to regulate custom systems, so only conventional systems should be 

regulated. (Mortex, Public Meeting Transcript, No. 7 at pp. 42-43)

ACEEE stated that the metrics adopted should exclude non-ducted central components, 

such as draft inducer fans, exhaust fans, HRVs, or ERVs. (ACEEE, No. 19 at p. 3) Rheem stated 

that it agrees with DOE in that ERVs, HRVs, and exhaust fans should not be covered in the 

furnace fan rulemaking. (Rheem, No. 29 at p. 2) AHRI and AGA also stated that the scope of 

coverage of this rulemaking should exclude draft inducer fans, exhaust fans, HRVs, and ERVs. 

(AHRI, Public Meeting Transcript, No. 7 at p. 29) (AGA, No. 14 at p. 1) Ingersoll Rand stated 
2-9

that neither draft inducer fans nor exhaust fans should be included in the rulemaking. (Ingersoll 

Rand, No. 25 at p. 1) Morrison commented that draft inducer fans should not be included 

because they do not circulate air through duct work. Morrison added that ERVs and HRVs 

should be excluded because they are not furnaces. (Morrison, No. 26 at p. 2)

Regal Beloit commented that the standard should apply to the total electrical 

consumption of the furnace fan product, which would include the consumption of other 

electrically-powered components such as draft inducer fans. Regal Beloit stated that ERVs, 

HRVs, SDHVs, and evaporative coolers should also be included in the scope of coverage. (Regal 

Beloit, No. 32 at p. 2) NRDC suggested that all motorized air-moving devices should be 

included in the scope of coverage, including draft inducers, exhaust fans, ERVs, and HRVs. 

(NRDC, No. 28 at p. 2)

DOE determined that, although the title of this statutory section refers to “furnaces and 

boilers,” the provision was written using notably broader language than the other provisions 

within the same section. Consequently, DOE interprets this relevant statutory language to allow 

DOE to cover the electricity used by any electrically-powered device used in residential, central 

HVAC systems for the purpose of circulating air through duct work. Based on this interpretation, 

DOE does not agree with interested parties, such as AHRI, Ingersoll Rand, Rheem, Lennox, and 

Morrison, that the scope of coverage be limited to circulation fans used in furnaces. DOE 

recognizes that a significant number of products may fit its interpretation. DOE’s preliminary 

approach is to address products for which DOE has sufficient data and information in this 

rulemaking. DOE may consider other such products in a future rulemaking, as data become 

available. For this rulemaking, DOE considered furnace fans used in products: (1) for which 

circulation fan energy consumption is not already covered in associated rulemakings; (2) for 

which sufficient data were available for its analyses; and (3) that could be tested using a similar 

test method (i.e., setup and equipment, instruments and methods of measure, and range of 

operating conditions). The following list describes the furnace fans which DOE plans to address 

in this rulemaking.

• Products addressed in this rulemaking: furnace fans used in weatherized and nonweatherized gas furnaces, oil furnaces, electric furnaces, modular blowers, and 

hydronic air handlers

• Products not addressed in this rulemaking: other products that incorporate 

furnace fans, such as CAC blower-coil units, through-the-wall air handlers, 

SDHV air handlers, ERVs, HRVs, draft inducer fans, or exhaust fans

DOE is including hydronic air handlers because they compare favorably to other products 

based on the aforementioned criteria. In addition, DOE finds that HVAC product manufacturers 

do offer hydronic air handler models. Therefore, hydronics are not solely systems that are 

configured in the field as Mortex suggests. The products for which DOE is not considering 

standards in this rulemaking did not compare favorably to the included products based on the 

aforementioned criteria. However, the statutory language provides DOE the authority to regulate 

these products. Therefore, the aforementioned products that are not covered in this rulemaking 

may be considered in a future, separate rulemaking as data become available.
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DOE is aware that the SEER and HSPF metrics that DOE uses to regulate residential 

CAC and heat pump (HP) products account for the indoor circulation fan’s (i.e., furnace fan for 

the purposes of this rulemaking) electrical energy consumption during the cooling and heating 

seasons, respectively. For single packaged CAC/HP products, the circulation fan is integrated 

into the product, and, therefore, its energy consumption is measured during the certification 

testing for those products and then reflected in the calculated SEER/HSPF ratings. Similarly for 

split system CAC and heat pump products (i.e., those that consist of separate indoor and outdoor 

units) where the indoor unit includes an integral blower (i.e., a blower-coil unit), the SEER and, 

for heat pumps, the HSPF ratings account for that particular indoor fan’s electrical energy 

consumption during the cooling and heating seasons. If the indoor unit of a split system, 

however, does not have a circulation fan (i.e., a coil-only unit), default values for a hypothetical 

indoor fan’s power and heat generation are used to adjust the laboratory-measured capacities and 

power consumption values. These fan heat and power defaults are 1250 Btu/hr per 1000 CFM 

and 365 W / 1000 CFM, respectively. (10 CFR part 430, subpart B, appendix M, section 3.3.d) 

The SEER and HSPF for the coil-only unit are calculated using these fan-adjusted capacity and 

power values. Finally, manufacturers sometimes opt to certify a particular coil-only unit when 

paired with a specific model of furnace or modular blower – in effect converting a coil-ony unit 

to a blower-coil unit. In such cases, the SEER and HSPF ratings again are based on actual 

measurements of indoor circulation fan’s electrical energy use. DOE expects that the largest 

population of certified ratings for CAC and heat pumps correspond to coil-only units whose 

SEER/HSPF ratings are based on the default values for the circulation fan’s electrical 

consumption and heat dissipation. As a result, the electrical energy consumption of many indoor 

units that can be paired with coil-only units – such as non-weatherized furnaces, hydronic air 

handlers, and modular blowers – is not measured for certification. DOE is including residential 

CAC and heat pump products for this reason. Section 2.7 includes a discussion of how DOE 

avoids double-counting the energy savings in cooling mode from higher-efficiency furnace fans 

used in higher-efficiency CAC and heat pumps that is already accounted for in the analysis for 

standards on those products. During the July 2010 Framework Document public meeting, 

Adjuvant commented that DOE had recently published a small motors standard in February of 

that year and that some of the fan motors within the scope of the furnace fan rulemaking could 

already be included in that standard. (Adjuvant, Public Meeting Transcript, No. 7 at pp. 156-157) 

AHRI commented that motors used in HVAC systems are not regulated under the small motors 

rulemaking, and Morrison agreed. (AHRI, Public Meeting Transcript, No. 7 at p. 157; Morrison, 

Public Meeting Transcript, No. 7 at p. 174)

DOE does not expect any overlap in the scope of coverage of the small motors 

rulemaking and the furnace fans rulemaking. DOE agrees with interested parties that the 

capacitor start, capacitor run (CS/CR) and polyphase motors included in the scope of the small 

motors rulemaking are not typically used in residential applications. 

In the Framework Document, DOE sought comment on coverage of the various modes of 

furnace fan operation (i.e., active mode, standby mode, and off mode). DOE identified that active 

mode operation would be characterized by different rates of electrical consumption in each of a 

furnace fan’s available airflow-control settings, each of which DOE expects are designated for a 

specific function (i.e., cooling, heating, and constant circulation). DOE also stated in the 

Framework Document that it expected that furnace fans used in residential furnaces and CAC 

products will not have any standby mode electrical consumption that needs to be accounted for 
2-11

in this rulemaking, because electrical energy consumption in standby mode is already being 

addressed in the energy conservation standards rulemakings for these products. In addition, DOE 

stated that it did not expect furnace fans to have any off mode electrical energy consumption, as 

defined in the Framework Document, because most consumers are unlikely to set their 

residential, central HVAC systems to off mode. DOE proposed the following definitions for 

furnace fan “active mode,” “standby mode,” and “off mode” in the test procedure NOPR5

• “Active mode” means any mode in which the HVAC product is connected to the 

power source and circulating air through duct work.

:

• “Off mode” means the mode during which the HVAC product is not powered.

• “Standby mode” means the mode during which the HVAC product is connected 

to the power source and the furnace fan is not activated.

These definitions are very similar to those presented in the Framework Document, but include 

slight modifications to be more consistent with definitions for “active mode,” “standby mode,”

and “off mode” for the HVAC products in which furnace fans are used.

Interested parties commented that DOE should not include furnace fan electrical energy 

consumption in active mode that is already covered in other rulemakings. Ingersoll Rand stated 

that neither the energy use during cooling operation or heat pump heating operation should be 

included, because they are already included in the SEER and HSPF ratings. (Ingersoll Rand, No. 

25 at p. 1) Lennox agreed, stating that the cost and energy of the furnace fan in cooling 

operation is included in the annual cooling energy and cost estimate required by DOE and 

Federal Trade Commission (FTC) regulations in the SEER metric. According to Lennox, the 

SEER metric includes measured fan performance for 89 percent of the active, split-system 

single-phase systems currently in the AHRI directory and 100 percent of single packaged units. 

Lennox added that a standard estimate for furnace performance is used for the remaining 11

percent of split-system listings that are not listed with a specific furnace and are known as “coilonly” units. (Lennox, No. 23 at p. 3) Rheem also commented that the furnace fans rulemaking 

should be limited to furnaces in the heating mode because, for matched systems with a furnace 

air handler, the energy use in cooling mode is already included in SEER. (Rheem, Public 

Meeting Transcript, No. 7 at pp. 26-27) Lennox stated that SEER is unlikely to increase as a 

result of a furnace fan standard. (Lennox, No. 23 at p. 3) Interested parties differed in support of 

considering operation in constant-circulation mode. Lennox commented that energy use for 

constant-circulation operation should not be included, because it is highly variable depending on 

a complex set of factors. Lennox concluded, therefore, that an estimate of average conditions for 

constant-circulation use would be of little or no value to consumers during the selection process. 

(Lennox, No. 23 at p. 3) Regal Beloit countered that the standard must account for constantcirculation use, because it is becoming more popular now that homes have tighter envelopes, 

which increases the need for ventilation. (Regal Beloit No. 32 at p. 2)

 

5 U.S. Department of Energy-Office of Energy Efficiency and Renewable Energy, Energy Conservation Program for 

Consumer Products: Test Procedures for Furnace Fans, Notice of Proposed Rulemaking, May 17, 2012. 

Washington, DC. Federal Register / Vol. 77, No. 94.
2-12

After considering available information and public comments on this issue, DOE has 

decided to account for the electrical consumption of furnace fans while performing all active 

mode functions (i.e., heating, cooling, and constant circulation) in its proposed rating metric. 

DOE recognizes that furnace fans are used not just for circulating air through duct work during 

heating operation, but also for circulating air during cooling and constant-circulation operation. 

DOE anticipates that higher airflow-control settings are factory set for cooling operation. 

Therefore, DOE expects that the electrical energy consumption of a furnace fan is generally 

higher while performing the cooling function. Additionally, the design of the fan as well as its 

typical operating characteristics (i.e., ESP levels during operation in different modes) is a strong 

function of the performance requirements in cooling mode. Consequently, DOE expects that only 

accounting for electrical consumption in an airflow-control setting designated for heating in the 

rating metric could result in an incomplete assessment of overall performance. DOE further 

recognizes that the potential for significant power reduction occurs when the fan is operating in 

its lowest airflow-control setting, which DOE finds is typically factory set for constant

circulation. This significant power reduction is consistent with the theory that fan input power is 

proportional to the cube of the airflow. Consequently, a “snapshot approach” that specifies only a 

single airflow-control setting may not be representative of the product’s average use. However, 

some fan technologies may not reduce power input in this fashion. DOE is concerned that rating 

furnace fan performance at a single airflow-control setting would incentivize manufacturers to 

design fans that are optimized to perform efficiently at the selected rating airflow-control setting 

but that are not efficient over the broad range of field operating conditions. DOE expects that 

accounting for electrical consumption in multiple airflow-control settings in the rating metric 

will help ensure that the standard accounts for the efficiency advantages of using motor 

technologies that maintain higher efficiencies over a broad range of typical field operating 

conditions. DOE is aware that other technologies, such as improved impeller designs, may also 

improve efficiency in some of the expected range of operation. 

The proposed rating metric accounts for fan electrical consumption while performing all 

active mode functions. Fan electrical consumption in the cooling mode is accounted for in the 

SEER metric that DOE uses for CAC and heat pump products, which means that the energy 

savings in cooling mode from higher-efficiency furnace fans used in some higher-efficiency

CAC and heat pumps is already accounted for in the analysis of standards on those products. To 

avoid double-counting, the analysis for this rulemaking does not include furnace fan electricity 

savings that were already included in DOE’s analysis for CAC and heat pump products. Section 

2.7 of this chapter and chapter 8 of this TSD provide a discussion of this issue. 

Many interested parties agreed with DOE that standby mode electrical energy 

consumption is sufficiently covered in other rulemakings and should not be included in this 

rulemaking. Rheem stated that only the active mode of operation should be addressed in this 

rulemaking because furnace fan standby consumption is covered by other rulemakings. (Rheem, 

No. 29 at p. 2 and Public Meeting Transcript, No. 7 at p. 46) According to Rheem, for example, 

assuming that the air handler or furnace is in standby mode if the system is not operating in 

heating, cooling, or circulating fan mode would result in double counting because standby is 

already addressed in the SEER calculation. (Rheem, No. 29 at p. 4) AHRI and Morrison 

commented that furnace fan standby is already accounted for in the DOE test procedures for 

furnaces (10 CFR Part 430, subpart B, Appendix N) and CAC and heat pumps (10 CFR Part 430, 

subpart B, Appendix M). (AHRI, No. 20 at p. 3; Morrison, No. 26 at p. 3) Ingersoll Rand stated 
2-13

that only active mode electrical energy consumption should be covered in this rulemaking,

because standby should be counted for on a per appliance basis and not a per component basis. 

(Ingersoll Rand, No. 25 at p. 2) Lennox agreed that standby should be evaluated on the overall 

furnace rather than a component like the furnace fan. (Lennox, No. 23 at p. 4) Ingersoll Rand 

commented that it agreed with DOE’s assumption that the standby power associated with a 

particular component (furnace fan) is already covered when the standby power of the system 

(furnace) of which that component is a part is covered in a separate standard. (Ingersoll Rand, 

Public Meeting Transcript, No. 7 at p. 33) Rheem added that electronically commutated motor

(ECM) controls consume electrical energy when the impeller is not in motion, but this energy 

consumption is applicable to the furnace control system and should not be applied to the furnace 

fan if the part of the control is affixed to the motor housing. (Rheem, No. 29 at p. 2) NRDC 

agrees with DOE's definition of “standby mode” and stated that standby power has been 

estimated to consume about 10 percent of the electricity used in a gas furnace and should be 

regulated. (NRDC, No. 28 at p. 3) Adjuvant stated that, because furnace fans are used in 

products other than furnaces and CAC, some furnace fan standby consumption will go uncovered 

if DOE assumes that furnace fan standby consumption is fully covered by other associated 

rulemakings. (Adjuvant, Public Meeting Transcript, No. 7 at pp. 33-35)

Ingersoll Rand commented that off mode should not be included in this rulemaking. 

(Ingersoll Rand, No. 25 at p. 1) Ingersoll Rand did not provide any justification for its 

recommendation to exclude off mode electrical energy consumption.

EPCA, as amended by EISA 2007, requires that any final rule for a new or amended 

energy conservation standard adopted after July 1, 2010 must address standby mode and off 

mode energy use pursuant to 42 U.S.C. 6295(o). (42 U.S.C. 6295(gg)(3)) EISA 2007 also 

requires that such energy consumption be integrated into the overall energy efficiency, energy 

consumption, or other energy descriptor, unless the current test procedure already accounts for 

standby mode and off mode energy use. If an integrated metric is technically infeasible, DOE 

must prescribe a separate standby mode and off mode metric for the covered product. (42 U.S.C. 

6295(gg)(2)(A)) 

Accordingly, DOE must address the standby mode and off mode energy use of residential 

furnace fans in this rulemaking. However, DOE has already incorporated standby mode and off 

mode energy use in energy conservation standards (or proposed energy conservation standards) 

for several of the products in the preliminary analysis scope of coverage. Measurement of 

standby mode and off mode energy use for non-weatherized gas furnaces, oil-fired furnaces, and 

electric furnaces is already prescribed in the DOE furnace test procedure (10 CFR part 430, 

subpart B, appendix N, section 8.0). In a September 13, 2011 NOPR, DOE proposed 

amendments to the furnace standby mode and off mode test procedure. 76 FR 56339. DOE 

proposed coverage of standby mode and off mode energy use for modular blowers and 

weatherized gas furnaces in a June 2, 2010 NOPR. 75 FR 31224, 31270. DOE subsequently 

published one SNOPR on April 1, 2011 and another on October 24, 2011 regarding standby 

mode and off mode test procedures for these products. 76 FR 18105; 76 FR 65616. 

Furnace fans are integrated in the electrical systems of the HVAC products in which they 

are used and controlled by the main control board. Therefore, there is no standby mode and off 

mode energy use associated with furnace fans used in the aforementioned products that would 
2-14

not already be measured by the established or proposed test procedures associated with these 

products. Hence, given that the standby mode and off mode energy consumption of these types 

of furnace fans either has been or is in the process of being fully addressed, there is no need for 

DOE to establish standards for these modes for these products in this rulemaking. 

However, there are no current energy conservation standards for electrical energy use in 

hydronic air handlers nor is there an ongoing rulemaking for which such test procedures have 

been proposed. Hence, the standby mode and off mode energy use for furnace fans that are 

incorporated into these products must be considered in this rulemaking pursuant to EPCA. In the 

furnace fan test procedure NOPR, DOE proposed to incorporate test methods to measure the 

standby mode and off mode energy of hydronic air handlers that are identical to those specified 

in the DOE test procedure for residential furnaces and boilers (10 CFR part 430, subpart B, 

appendix N, section 8.6). 77 FR 28674, 28689 (May 15, 2012). DOE proposed to also adopt the 

updates proposed in the September 13, 2011 furnaces test procedure NOPR (75 FR 56339) for 

measurement of standby mode and off mode energy of furnace fans incorporated in hydronic air 

handlers. DOE proposed to establish an integrated metric that combines the steady-state standby 

mode and off mode electrical energy consumption measurements for hydronic air handlers with

the active mode energy use for these furnace fans, as required by EPCA. DOE proposes to 

weight the standby mode and off mode measurements by estimated national average hours for 

these modes. The hours associated with these modes are discussed in section III.D of the test 

procedure NOPR. Similar to furnaces, DOE expects that hydronic air handlers are not typically 

equipped with a seasonal off switch and that consumers would not turn off power to the hydronic 

air handler. Therefore, DOE estimates that electrical off mode consumption and the annual off 

mode operating hours will both be equal to zero. 

AHRI commented that DOE should focus on regulating duct work to reduce the higher 

than recommended ESP that furnace fan products must face when installed. (AHRI, Public 

Meeting Transcript, No. 7 at p. 93)

While DOE shares the concerns about the negative impacts that poor duct work can have 

on furnace fan performance, DOE does not have statutory authority to regulate duct work.

2.3.2 Product Classes

When evaluating and establishing energy conservation standards, DOE generally divides 

covered products into product classes by the type of energy used, capacity, or other performancerelated features that affect efficiency. Different energy conservation standards may apply to 

different product classes. (42 U.S.C. 6295(q)). DOE then conducts its analysis and considers 

establishing standards to provide separate standard levels for each product class.

In the Framework Document, DOE sought comment on differentiating between product 

classes based on rated airflow capacity or rated horse power. DOE sought comment on a range of 

rated airflow capacity from 400 to 2,200 cfm and a range of rated horsepower from 1/5hp to 1hp,

based on an initial review of furnace fan product specification sheets. DOE planned to establish 

product classes by dividing the typical range of either rated airflow capacity or rated horsepower 

into bins based on market data and product characteristics. DOE also sought comment on the 

appropriate number or range of bins (i.e., classes).
2-15

Morrison and AHRI stated that neither rated airflow capacity nor rated horsepower should 

be used because they are not certified descriptors and are not used as performance descriptors for 

residential products. (Morrison, No. 26 at p. 2; AHRI, No. 20 at p. 3) Rheem commented that it 

agreed that 400 to 2,200 cfm is an appropriate rated airflow capacity range for residential furnace 

fans. However, Rheem stated that rated airflow capacity should not be used as a furnace fan 

descriptor. (Rheem, No. 29 at p. 11) Rheem added that rated horsepower range applies to motor 

design and does not account for aerodynamic design of the fan or the internal static pressure. 

Therefore, according to Rheem, the horsepower of the product should not be used. (Rheem, 

Public Meeting Transcript, No. 7 at p. 31; Rheem, No. 29 at p. 2) Johnson Controls echoed 

Rheem’s comment, stating that product classes should be based on rated airflow, not motor 

horsepower. (Johnson, Public Meeting Transcript, No. 7 at pp. 135-137) Morrison claimed that 

nameplate horsepower is an unreliable value on which to base motor comparisons. (Morrison, 

Public Meeting Transcript, No. 7 at p. 138) ACEEE commented that it strongly opposes the use 

of motor horsepower to define furnace fan product classes, because horsepower is an input. 

(ACEEE, No. 19 at p. 5) Regal Beloit suggested that DOE should define product classes based 

on CFM versus horsepower. According to Regal Beloit, the motor horsepower is only one factor 

in the system equation. Regal Beloit stated that some blowers are less efficient and would, thus,

require a higher horsepower motor to drive the blower. Regal Beloit concluded that the critical 

variable that furnace and air handler manufacturers are looking for is the ability to drive a certain 

amount of airflow. (Regal Beloit, No.32 at p. 4)

Some interested parties, including Rheem, ACEEE, and Ingersoll Rand, commented on 

using heating/cooling capacity to differentiate product classes. Rheem commented that 

classifying furnace fans as either three-ton or five-ton units might be an appropriate method to 

define product classes. (Rheem, No. 29 at pp. 11-12) Rheem added that furnaces, air handlers,

and package equipment are currently assigned product classes based on heating and cooling 

capacity. (Rheem, No. 29 at p. 11) ACEEE commented that documentation shows that 

manufacturers commonly ship condensing furnaces with alternative regional air handlers, with 

higher fan capacity relative to furnace output for furnaces meant for southern applications than 

those intended for northern sales. ACEEE stated that complications like these suggest that 

furnace capacity, like motor horsepower, is an inappropriate basis for separate product classes. 

(ACEEE, No. 19 at p. 3) Morrison commented that the energy consumed by a furnace fan 

product to meet certain cooling/heating demands would vary by manufacturer because specified 

cubic feet per minute (CFM) varies by capacity. (Morrison, Public Meeting Transcript, No. 7 at 

p. 96) Ingersoll Rand commented that furnace fans are selected based on heating and cooling 

capacity. Therefore, product classes should be developed along the lines of the furnaces that

employ those furnace fans. (Ingersoll Rand, No. 25 at p. 3)

Other interested parties suggested that DOE should separate products into product classes 

by product application or internal design. Morrison and Johnson Controls stated that different 

furnace fan assemblies are used in different HVAC products. (Morrison, Public Meeting 

Transcript, No. 7 at p. 138; Johnson Controls, Public Meeting Transcript, No. 7 at p. 138)

Rheem commented that categorizing the electrical consumption of furnace fans is impossible 

until the HVAC product is applied to a system. (Rheem, No. 29 at p. 12) Adjuvant stated that 

manufactured homes should be used to define a separate product class. (Adjuvant, No. 9 at p. 6)
2-16

Adjuvant also added that the manufactured home market is made unique by certain space and 

regulatory constraints. Adjuvant suggested that DOE should remain aware of, and account for,

these unique concerns. (Adjuvant, Public Meeting Transcript, No. 7 at p. 132) NRDC stated that 

the products within the scope of the rulemaking have varying internal static pressure due to each 

type of heat exchanger and velocity across that heat exchanger associated with that particular 

product. NRDC also commented that internal and reference external static pressure be tied to the 

particular product class in which they are associated with to avoid particular products seeming 

better than others. (NRDC, No. 28 at p. 5) Johnson Controls also stated that manufactured 

homes, condensing furnaces, and non-condensing furnaces should each have separate product 

classes. (Johnson, Public Meeting Transcript, No. 7 at pp. 135-137) ACEEE commented that 

product classification by application, as indicated by the internal static pressure (i.e., pressure 

drop across the heat exchanger) may be necessary. This approach would group technologies 

(within capacities) that have similar air handler requirements. (ACEEE, No. 19 at p. 3) Rheem 

stated that in a comparison of two furnaces, a condensing furnace and a non‐condensing furnace 

with similar output capacity, the fuel consumption for the condensing furnace is less than the 

non‐condensing furnace and the electrical consumption for the condensing furnace is greater than 

the non‐condensing furnace. (Rheem, No. 29 at p. 9) Rheem also stated that, as the heat 

exchanger surface has increased with higher-efficiency equipment, the equipment has grown in 

volume and weight. (Rheem, No. 29 at p. 15) Ingersoll Rand commented that coil sizes have

increased with higher SEER requirements while furnaces have gotten smaller. Ingersoll Rand 

claims that this trend makes it harder to maintain fan efficiency, because the same airflow has to 

be forced through a smaller unit. (Ingersoll Rand, Public Meeting Transcript, No. 7 at p. 133)

For the reasons stated by interested parties, DOE agrees that rated airflow capacity and 

rated horsepower are inappropriate for differentiating between product classes. These descriptors 

do not account for many of the factors that impact furnace fan performance, such as internal 

static pressure. In addition, DOE expects that the energy consumption impacts of heating/cooling 

capacity and airflow capacity are addressed by the rating metric proposed in the test procedure 

NOPR, fan efficiency rating (FER). The proposed rating metric is normalized by the airflow in 

the maximum airflow control setting, which is generally determined by the cooling capacity. 

Therefore, for the preliminary analysis, DOE decided to differentiate product classes for furnace 

fans based on application and internal structure, which are performance-related features that have 

a significant impact on energy efficiency. The application of the HVAC product dictates the 

external static pressure and, to a certain degree, the internal static pressure. For example, a 

manufactured home system will likely have a lower external static pressure than a site-built 

system and, as a result, consume less energy, all else being equal. A detailed discussion and field 

data to support this assumption are provided in the furnace fan test procedure discussion 

regarding proposed reference system external static pressure values. The internal structure (i.e., 

geometry and configuration of components in the airflow path) determines the internal static 

pressure. For example, the geometry of a hydronic heat exchanger is different than the geometry 

of a clamshell heat exchanger, a furnace heat exchanger design typically found in nonweatherized gas furnaces, resulting in different internal static pressure levels and different 

expected energy consumption levels.

Based on application and internal static pressure, DOE identified 21 product classes for 

this rulemaking. The product classes identified for this rulemaking are listed below. DOE 
2-17

divided these product classes into nine key product classes and 12 additional product classes. 

Key product classes are those for which DOE is aware of significant shipments. Therefore, 

enough public data were readily available to conduct robust analyses. The additional product 

classes represent significantly fewer shipments and significantly less energy use. For the 

preliminary analysis, DOE grouped each non-key product class with a key product class to which 

it is closely related in application and internal structure (i.e., the primary criteria used to 

differentiate between product classes). DOE assigned the analytical results of each key product 

class to the non-key product classes with which it is grouped. Table 2.3.1 presents the 21 product 

classes and maps the additional product classes to the nine key product classes. 

Table 2.3.1: Product Classes

Key Product Class Additional Product Classes

Non-Weatherized, Non-Condensing Gas Furnace 

Fan (NWG-NC)

Non-weatherized, Condensing Gas Furnace Fan 

(NWG-C)

Weatherized Gas Furnace Fan (WG-NC)

Weatherized, Non-Condensing Oil Furnace Fan 

(WO-NC)

Weatherized Electric Furnace/Modular Blower Fan 

(WEF/WMB)

Manufactured Home Weatherized Gas Furnace Fan 

(MH-WG)

Manufactured Home Weatherized Oil Furnace Fan 

(MH-WO)

Manufactured Home Weatherized Electric 

Furnace/Modular Blower Fan (MH-WEF/WMB)

Non-weatherized Oil, Non-Condensing Furnace 

Fan (NWO-NC)

Non-Weatherized, Condensing Oil Furnace Fan 

(NWO-C)

Manufactured Home Non-Weatherized Oil Furnace 

Fan (MH-NWO)

Non-weatherized Electric Furnace / Modular 

Blower Fan (NWEF/NWMB)

Heat/Cool Hydronic Air Handler Fan (HAH-HC)

Heat-Only Hydronic Air Handler Fan (HAH-H)

Hydronic Air Handler Fan with Coil (HAH-C)

Manufactured Home Heat/Cool Hydronic Air 

Handler Fan (MH-HAH-HC)

Manufactured Home Heat-Only Hydronic Air 

Handler Fan (MH-HAH-H)

Manufactured Home Hydronic Air Handler Fan 

with Coil (MH-HAH-C)

Manufactured Home Non-Weatherized Gas, NonCondensing Furnace Fan (MH-NWG-NC)

Manufactured Home Non-Weatherized Gas, 

Condensing Furnace Fan (MH-NWG-C)

Manufactured Home Electric Furnace/ Modular 

Blower Fan (MH-EF/MB)
2-18

Each product class title includes descriptors that indicate the application and internal 

structure of its included products. Weatherized and non-weatherized are descriptors that indicate 

whether the HVAC product is installed outdoors or indoors, respectively. Weatherized products 

also include an internal evaporator coil, while non-weatherized products are not shipped with an 

evaporator coil but may be designed to be paired with one. Condensing refers to the presence of 

a secondary, condensing heat exchanger in addition to the primary combustion heat exchanger in 

certain furnaces. Manufactured home products meet certain design requirements that allow them 

to be installed in manufactured homes. Details regarding these design requirements are included 

in Chapter 3 of this TSD. Descriptors like gas, oil, electric or hydronic indicate the type of fuel 

or working fluid that the HVAC product uses to produce heat, which determines the type and 

geometry of the primary heat exchanger used in the HVAC product. Hydronic products include 

parenthetical descriptors to indicate whether the product is designed to be used for heating and 

cooling or heat only, as well as whether the product includes an internal evaporator coil. 

2.3.3 Market Assessment

As part of the market and technology assessment, DOE developed information that 

provides an overall picture of the market for the products considered, including the nature of the 

products, market characteristics, and industry structure. DOE collected quantitative and 

qualitative information, primarily from publicly-available sources. The market assessment 

examined manufacturers, trade associations, and the quantities and types of products sold and 

offered for sale. DOE reviewed relevant literature and interviewed manufacturers to develop an 

overall picture of the residential furnace fan industry in the United States. Industry publications 

and trade journals, government agencies, and trade organizations provided the bulk of the 

information, including: (1) manufacturers and their market shares; (2) shipments by product type 

(e.g., non-weatherized gas furnace, oil furnace, hydronic air-handler); (3) product information;

and (4) industry trends. The analyses developed as part of the market assessment are described in 

chapter 3 of the TSD. 

In the Framework Document, DOE sought comment on whether the manufacturers of 

products containing furnace fans are also the manufacturers of the furnace fans themselves. DOE 

also welcomed input on estimates of market shares, products, features, and trends related to 

electricity consumption for the furnace fans covered in this rulemaking and the HVAC products 

in which they are incorporated.

Some interested parties, including Ingersoll Rand, Rheem, Morrison, AHRI, and Johnson 

Controls, commented regarding the correlation between the manufacturers of furnace fans and 

those of HVAC products. Ingersoll Rand stated that furnace manufacturers are not normally the 

manufacturers of blower wheels or motors, but they may manufacture the blower housings used 

in their products. (Ingersoll Rand, No. 25 at p. 3) AHRI stated that manufacturers of furnace 

fans are sometimes the manufacturer of the products that utilize those fans, but it varies from 

manufacturer to manufacturer. AHRI also stated that some components are purchased, while 

others are fabricated. (AHRI, No. 20 at p. 7) Morrison echoed AHRI’s comments, stating that 

the choice of whether to produce or purchase the furnace fan varies by manufacturer; some 

components are fabricated, and some are purchased. (Morrison, No. 26 at p. 6) Rheem stated 

that it manufactures furnace fans as a component of an air handler, furnace, or package unit. 

Rheem also purchases or has purchased subassemblies from vendors for incorporation into 
2-19

Rheem products. (Rheem, No. 29 at p. 11) More specifically, Rheem has purchased fan kits 

from Morrison and Lau/Ruskin. The kits included the housing and wheel, and Rheem added the 

motor to the assembly. (Rheem, No. 29 at p. 11) Rheem stated that it sometimes manufactures

the housing, as well. (Rheem, Public Meeting Transcript, No. 7 at p. 126) Ingersoll Rand 

commented that housings typically differ across manufacturers, because many of them make 

their own. Ingersoll Rand added that housings are sometimes purchased. (Ingersoll Rand, Public 

Meeting Transcript, No. 7 at p. 129) Regal Beloit stated that there are manufacturers who make 

all of the components of the furnace fan assembly (including the electric motor) that compete in 

the same space as the furnace/air handler manufacturer who manufacture some components of 

the furnace fan assembly, but still rely on outside companies to manufacturer electric motors. 

(Regal Beloit, No. 32 at p. 4) Johnson Controls stated that there are blower kits for 

manufactured home applications that can be installed in a competitor's product, in which case it 

is designed for a specific application, not product. (Johnson, Public Meeting Transcript, No. 7 at 

pp. 129-130) Rheem added that furnace fans are only sold separately as replacement parts. 

(Rheem, No. 29 at p. 15) Rheem also stated that the ECMs it offers in its equipment are 

programmed on the production line, and replacement motors must be programmed to match the 

original motor program. (Rheem, No. 29 at p. 16) AHRI stated that, ultimately, the burden of 

testing and certifying furnace fans will fall on the manufacturer of the product in which the 

furnace fan is incorporated. (AHRI, Public Meeting Transcript, No. 7 at p. 128)

DOE agrees with AHRI that the burden of meeting this standard falls on the manufacturer 

of the HVAC product in which the furnace fan is incorporated. DOE is aware that HVAC 

product manufacturers purchase many of the components in the furnace fan assembly, such as 

the motor and impeller, from separate component manufacturers. However, the HVAC product 

manufacturer determines the design requirements, selects the purchased components based on 

these requirements, and performs the final assembly and integration of the fan assembly into the 

HVAC product. Even in the less prevalent cases in which the HVAC product manufacturer 

purchases entire fan assemblies (including motor), the HVAC product manufacturer must 

integrate the assembly into the final product. The task of integrating the fan assembly could 

include programming the controls, as Rheem points out, which impacts the energy performance 

of the furnace fan. For these reasons, DOE’s estimates of manufacturer production costs 

generated for the preliminary analysis reflect the estimated costs to the HVAC product 

manufacturer to manufacture the furnace fan assembly and build it into the HVAC product. 

These costs take into account any component original equipment manufacturer (OEM) markup 

that the HVAC product manufacturer will incur when purchasing furnace fan parts.

A few interested parties, including Johnson Controls, Mortex, Rheem, and AHRI, 

commented on the market share of different furnace fan types. Johnson Controls stated that the 

Framework Document's estimate that 95 percent of furnaces use PSC motors may be incorrect,

because Federal tax credits, utility rebates, weatherization programs, and energy efficiency 

standards have resulted in a recent increase in brushless permanent magnet, also referred to as 

ECM, motor implementation. Johnson Controls added that ECMs are not used in the majority of 

products yet, but the market is heading in that direction. (Johnson, Public Meeting Transcript, 

No. 7 at p. 142) Rheem echoed Johnson Controls’ comment, stating that the market share for 

ECMs rose from 10 percent to 30 percent within the last five years due to rebates associated with 

ECM motors. (Rheem, No. 29 at p. 3) Rheem also noted a report by the State of Wisconsin, 
2-20

Public Service Commission of Wisconsin Focus on Energy Evaluation Semiannual Report (18 

month Contract Period).6 In that time, ECM furnaces market share was reported to be 28 percent 

in the first quarter of 2008. Additionally, Federal tax, State, and utility rebates continue to 

increase the market share of Regal Beloit’s constant-torque ECM line, the Genteq X13. (Rheem, 

No. 29 at p. 11) Johnson Controls added that, among all products containing furnace fans (air 

handlers and furnaces), ECMs account for 15 to 35 percent of the market, depending on the 

product family and manufacturer. (Johnson, Public Meeting Transcript, No. 7 at p. 144) Mortex 

added that, because of the decrease in the cost gap between ECM and PSC motors, there might 

not be any PSC motors on the market in 10 years or once the standard becomes effective. 

(Mortex, Public Meeting Transcript, No. 7 at pp. 143-144) Also, this decrease in supply and 

increase in demand could drive up prices for consumers. (Rheem, No. 29 at p. 16) 

DOE acknowledges the comments received on PSC and ECM market shares. Based on 

available data and comments received, DOE believes that the market share for ECMs is 

approximately 30 percent. DOE recognizes that the ECM market share is in part due to rebates 

and tax credits associated with using this technology. Chapter 3 of this TSD includes a detailed 

description of past and existing rebates and tax credits for furnace fans.

AHRI suggested that DOE should solicit manufacturers on estimated market share, 

products, features, and trends related to electricity consumption for furnace fans covered by this 

rulemaking. (AHRI, No. 20 at pp. 7-8) DOE solicited the aforementioned information during

interviews with manufacturers, which DOE conducted as part of the preliminary manufacturer 

impact analysis. More details regarding these interviews and their results are presented in chapter 

12 of this TSD.

2.3.4 Technology Assessment

 As part of the market and technology assessment, DOE developed a list of technologies 

to consider for improving the efficiency of furnace fans. Then, DOE removed technologies that 

do not change or affect the energy efficiency of furnace fans, as measured by the relevant metric 

in the DOE test procedures. Chapter 3 of the TSD includes the detailed list of all technology 

options DOE identified for further consideration in this rulemaking. DOE sought comment on 

the preliminary technology options identified in the Framework Document (i.e., high-efficiency 

furnace fan motors and high-efficiency impellers) and whether there are other technology options 

DOE should consider.

ACEEE commented that DOE needs to consider foreign products in its analysis and the 

impacts that a DOE rulemaking will have on manufacturers' international production. ACEEE 

also commented that the "max-tech" analysis should include furnace fan technology not 

commonly available in the U.S. market. According to ACEEE, a comprehensive look at the 

entire furnace fan market must be analyzed. (ACEEE, No. 19 at p. 5)

 

6 State of Wisconsin, Public Service Commission of Wisconsin Focus on Energy Evaluation Semiannual Report (18-

month Contract Period) is accessible using the following link: 

http://www.cee1.org/eval/lighting_files/WisconsinFOE-2009-04-08.pdf
2-21

Some interested parties, including ACEEE, NEEA, NEEP, and Adjuvant, commented on 

how the airflow path design of the HVAC product affects furnace fan performance. ACEEE 

commented that manufacturers face market pressure to make cabinets as compact as possible, 

which leads to strong temptations to minimize clearances between the fan itself and the cabinet 

walls. This restricts airflow and reduces efficiency. (ACEEE, No. 19 at p. 2) ACEEE also stated 

that DOE has excluded important options pertaining to the air handler cabinet with their current 

definition of “furnace fan.” These options include the clearance between the furnace fan and 

cabinet and aerodynamic couplings between the filter exit and a single-ended fan. (ACEEE, No. 

19 at p. 5) NEEA stated that the airflow through the air handler cabinet is impacted by both the 

geometry of the airflow path and also the design of the heat transfer elements associated with the 

air handler. (NEEA, No. 11 at p. 2) Both NEEP and Adjuvant commented that DOE should 

include airflow path design as a third technology option category, because it impacts the ESP of 

the system and has potential to save energy. (NEEP, No. 16 at p. 4; Adjuvant, Public Meeting 

Transcript, No. 7 at p. 155)

DOE recognizes that the airflow path design of the HVAC product in which the furnace 

fan is used impacts efficiency. DOE also recognizes that alterations to the design and 

configuration of internal components, such as the heat exchanger, could impact the thermal 

performance of the HVAC product. DOE plans to conduct its analyses carefully to ensure that 

tradeoffs between airflow performance and thermal performance are well understood and do not 

result in reduced system efficiency. While DOE did account for the impacts of airflow path 

design in the proposed test procedure and other aspects of the preliminary analyses (e.g., product 

class selection), DOE did not consider airflow path design as a technology option. DOE 

anticipates that the size of the cabinet and the geometry of the heat exchanger(s) would be the 

primary considerations. DOE did not include modeled cost and efficiency data for modifications 

to the cabinet size or heat exchanger geometry. DOE expects that a model that could ensure that 

overall system efficiency does not diminish due to tradeoffs between airflow efficiency and 

thermal efficiency would be overly complex. In addition, DOE expects that the costs for these

improvements could be extremely high and result in little airflow efficiency improvement 

compared to the other technology options mentioned in this TSD. For a detailed discussion of the 

engineering analysis methodology, refer to chapter 5 of this TSD. 

A few interested parties, including Rheem, Ingersoll Rand, and ACEEE, commented on 

the impellers used in furnace fan assemblies. Regal Beloit commented that furnace fans use both 

forward-curved and backward-curved impellers. (Regal Beloit No. 32 at p. 2) Rheem stated that 

there has been some work done on backward-curved impellers, but, currently, there are no 

backward-inclined impellers used in residential furnace fans, because they need larger diameters

and higher revolutions-per-minute (RPMs). According to Rheem, backward-curved impellers 

have only proven to be effective in higher-capacity (10-ton) units as a result. Rheem stated that 

forward-curved fans have been demonstrated to provide the best performance in terms of 

capacity and efficiency for the airflow applications discussed in this rule. (Rheem, No. 29 at p. 

13; Rheem, Public Meeting Transcript, No. 7 at pp. 154-155) Ingersoll Rand stated that 

impellers are very similar across products and manufacturers, with differences typically only in 

width and diameter. Ingersoll Rand added that impellers are chosen based on stability, breadth of 

operating conditions, loose tolerances, and ability to run at RPMs that best fit the application. 
2-22

(Ingersoll Rand, Public Meeting Transcript, No. 7 at pp. 128-129) ACEEE commented that 

alternative air handler fans should be considered in the rulemaking. These different fans include 

cast aluminum or polymer impellers, as well as backward-curved impellers. (ACEEE, No. 19 at 

p. 5)

DOE was unable to find a commercially-available residential HVAC product that 

incorporates a backward-curved impeller. However, DOE is aware of research performed at 

national laboratories that includes testing of a prototype residential furnace that includes a 

backward-curved impeller. The results of these tests show that backward-curved impellers have 

the potential to improve furnace fan efficiency, albeit not as a simple drop-in solution and not 

across the entire range of expected operation for residential applications.7 According to 

feedback from manufacturers, the efficiency improvement of backward-curved impellers may be 

much lower than preliminary research suggests, and there are a number of technical issues and 

design constraints associated with backward-curved impellers. Therefore, DOE is including

backward-curved impellers as a technology option for the preliminary analysis with an estimated 

efficiency improvement of 10 percent, but expects to further review its estimates for cost and 

efficiency based on comments received for this preliminary analysis. Detailed discussions 

regarding the backward-curved impeller technology and how DOE is including them in the 

preliminary analysis can be found in chapters 3 and 5 of this TSD.

Some interested parties, including ACEEE, NRDC, Ingersoll Rand, Rheem, AHRI, 

Morrison, Johnson Controls, and Mortex, commented on the motors used in furnace fan 

assemblies. Ingersoll Rand stated that there are two principal motor technologies: (1) PSC 

motors and (2) ECMs. A motor is selected based on cost/performance analysis and the 

performance and feature set required of the product. There are no safety or consumer utility 

differences. (Ingersoll Rand, No. 25 at pp. 3-4) Ingersoll Rand also stated that manufacturers 

select motors that achieve specified speed-torque curves and desired airflow. (Ingersoll Rand, 

Public Meeting Transcript, No. 7 at pp. 129-131) To create a speed-torque curve, Ingersoll Rand 

first determines the amount of airflow needed at specified static pressures to select the width and 

diameter. Then, Ingersoll Rand determines the torque required to stay within normal operating 

conditions. The result is the speed-torque curve needed to select the motor. (Ingersoll Rand, 

Public Meeting Transcript, No. 7 at p. 131) Ingersoll Rand stated that, if there is too much 

pressure drop, the ECM will ramp up power use and then level off to protect the motor from 

drawing too many amps. Ingersoll Rand added that the goal is to install a furnace that can 

achieve the necessary temperature rise for safety reasons. (Ingersoll Rand, Public Meeting 

Transcript, No. 7 at pp. 149-150) Mortex echoed Ingersoll Rand, stating that safe operation is 

dependent on airflow in furnaces and air handlers with strip heating, so safe operation also 

factors into furnace fan design decisions. (Mortex, Public Meeting Transcript, No. 7 at p. 144)

Morrison stated that ECMs have built-in protection and have power-limiting features to prevent 

the motor from going past certain power draws. (Morrison, Public Meeting Transcript, No. 7 at 

p. 150) 

 

7 Wiegman, Herman, “Final Report for the Variable Speed Integrated Intelligent HVAC Blower” (2003) (Available 

at: http://www.osti.gov/bridge/servlets/purl/835010-GyvYDi/native/835010.pdf).
2-23

Interested parties also commented on a constant-torque variation of the ECM motor 

technology (Regal Beloit’s X13 motor). ACEEE commented that many alternative ECMs have 

been developed for original equipment manufacturer (OEM) and/or retrofit markets that need to 

be considered because of the fact that they are less expensive than ECMs and more efficient than 

PSC motors. (ACEEE, No. 19 at p. 6) ACEEE expressed concern about how to determine the 

incremental increase in efficiency with motors of the same type. (ACEEE, No. 19 at pp. 5-6)

Rheem mentioned the X13 ECM for consideration as a technology option. Rheem described the 

X13 as a brushless direct current (DC) motor, with speed taps like a PSC motor. (Rheem, Public 

Meeting Transcript, No. 7 at p. 151) Mortex stated that the decrease in the cost gap between 

ECM and PSC motors could be the result of "dumbed-down" lower-end ECM models, such as 

the X13, which have less complex controls and fixed speed taps. Mortex noted that some of the 

higher-end ECMs, like the GE version 5, may still be much more costly, because of complicated 

controls and special impellers. (Mortex, Public Meeting Transcript, No. 7 at p. 147) Ingersoll 

Rand agreed with Mortex that there are less-expensive, less-complicated ECM models available 

that could potentially replace PSC motors. (Ingersoll Rand, Public Meeting Transcript, No. 7 at 

p. 147)

Interested parties compared PSC motors to ECMs. Rheem stated that the driving factor in 

furnace fan efficiency is the type of motor used: either PSC or ECM. According to Rheem the 

other details add complexity but marginal value. (Rheem, Public Meeting Transcript, No. 7 at pp. 

88-89) Rheem commented that ECM motors have the ability to nearly maintain the selected 

airflow regardless of the ESP. Rheem added that the electrical energy consumption of an ECM 

can double as the ESP increases from 0.1 inch w.c. to 1 inch w.c. According to Rheem, a PSC 

motor is not able to maintain the selected airflow, and the airflow decreases and the electrical 

consumption can drop by 50 percent as the ESP increases from 0.1 inch w.c. to 1 inch w.c. 

(Rheem, No. 29 at p. 13) AHRI and Morrison stated that PSC motors are used in a majority of 

the applications because of their low cost and reliable operation. (AHRI, No. 20 at p. 8 and 

Morrison, No. 26 at p. 7) AHRI and Morrison stated that PSC motors typically have efficiencies 

in the 55-65 percent range, while ECMs are more expensive but have higher efficiencies in the 

75-80 percent range. AHRI and Morrison added that ECMs have the possibility of an infinite 

number of operating points. According to these interested parties, Federal, State, and local 

programs have led to an increased adoption of higher-efficiency HVAC systems. (AHRI, No. 20 

at p. 8; Morrison, No. 26 at p. 7) NRDC echoed AHRI and Morrison, stating that ECMs have 

been shown to save 26-32 percent of the annual electricity use compared to PSC motors. 

(NRDC, No. 28 at p. 5) Johnson Controls stated that ECM motors have an efficiency advantage 

at low loads or partial load conditions but do not have a significant efficiency advantage at 

higher/maximum load conditions. (Johnson, Public Meeting Transcript, No. 7 at pp. 145-146) 

Additionally, Ingersoll Rand noted that ECM motors, although more efficient than PSC motors, 

add approximately 4 watts to the furnace standby power. PSC motors do not have standby 

power. (Ingersoll Rand, No. 25 at p. 2) Ingersoll Rand stated that it has not noticed a significant 

decrease in the cost gap between ECM and PSC motors. Ingersoll Rand added that the difference 

is still a 300 to 400 percent cost increase. Ingersoll Rand attributes the cost difference to the 

built-in electronics and responsive magnets of the ECM. (Ingersoll Rand, Public Meeting 

Transcript, No. 7 at p. 146)
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DOE recognizes the differences in ECM and PSC motor technologies. DOE is aware that 

these differences result in varying relative performance across the analyzed range of operation 

that DOE considers to be typical of residential applications. In the concurrent furnace fan test 

procedure NOPR, DOE used the comments regarding differential benefits for different operating 

conditions to develop a test metric that would provide a balanced indication of energy use 

covering a range of operating conditions. In addition, DOE accounted for the unique 

characteristics of each motor type in the preliminary analysis. DOE identified three PSC motor 

variations: the baseline PSC motor that has three or less airflow control settings; the improved 

PSC that has between three and five airflow-control settings; and a PSC motor with inverter 

controls. DOE also identified two ECM variations: the constant-torque ECM (e.g., the Genteq 

X13) and the constant-speed ECM. DOE included these motor types in its preliminary analysis. 

For a more detailed discussion about these motor types and how DOE included them in its 

analyses, refer to chapters 3 and 5 of this TSD. 

DOE recognizes that ECM motors contribute considerably more to standby power 

consumption than PSC motors. However, use of ECM motors is still practical because the 

increased standby consumption of ECM motors is significantly less than their active mode 

electrical energy savings. 

Rheem noted that the design of the housing can impact the fan efficiency. According to 

Rheem, the following housing design improvements can improve fan efficiency: (1) optimizing 

the shape of the inlet cone; (2) minimizing the gaps between the impeller and the inlet cone; and 

(3) optimizing cut-off location and the manufacturing tolerances. (Rheem, No. 29 at p.14) 

DOE investigated housing design modifications during its teardown analysis. DOE found

that housing design modifications had very little impact on furnace fan efficiency. In addition, 

during manufacturer interviews, manufacturers estimated that housing improvements would have 

very little effect on fan efficiency. For these reasons, DOE is not including improved housing 

designs as a technology option.

2.4 SCREENING ANALYSIS

The purpose of the screening analysis is to evaluate the technologies identified in the 

technology assessment to determine which technologies to consider further and which 

technologies to screen out. DOE consulted with industry, technical experts, and other interested 

parties in developing a list of energy-saving technologies for the technology assessment. DOE 

then applied the screening criteria to determine which technologies were unsuitable for further 

consideration in this rulemaking. Chapter 4 of the TSD, the screening analysis, contains details 

about DOE’s screening criteria.

As presented in further detail below, the screening analysis examines whether various 

technologies: (1) are technologically feasible; (2) are practicable to manufacture, install, and 

service; (3) have an adverse impact on product utility or availability; and (4) have adverse 

impacts on health and safety. In consultation with interested parties, DOE reviewed the list of 

residential furnace fan technologies according to these criteria. In the engineering analysis, DOE 
2-25

further considers the efficiency-enhancement technologies that it did not eliminate in the 

screening analysis.

1. Technological feasibility. DOE screens out technologies that are not incorporated in 

commercially-available products or working prototypes.

2. Practicability to manufacture, install, and service. If DOE determines that mass 

production of a technology in commercial products and reliable installation and 

servicing of the technology could not be achieved on the scale necessary to serve the 

relevant market by the time of the compliance date of the standard, it will not consider 

that technology further.

3. Adverse impacts on product or equipment utility or availability. If DOE determines a 

technology has a significant adverse impact on the utility of the product for significant 

consumer subgroups or results in the unavailability of any covered product type with 

performance characteristics (including reliability), features, size, capacities, and 

volumes that are substantially the same as products generally available in the United 

States at the time, it will not consider that technology further.

4. Adverse impacts on health or safety. If DOE determines that a technology will have 

significant adverse impacts on health or safety, it will not consider that technology 

further.

DOE eliminated the following technology options for residential furnace fans from further 

consideration based on these four criteria: housing design modifications; airflow path design

improvements; and ECM control relays. Chapter 4 includes a detailed discussion regarding these 

screened out technology options. In addition, DOE sought comment from interested parties on 

how the four screening criteria might apply to any additional technology option(s) that an 

interested party recommends to DOE. 

DOE received feedback during its preliminary manufacturer impact analysis that 

backward-curved impellers are more sensitive to installation configurations (i.e., upflow, 

downflow, and horizontal) than the forward-curved impellers that are currently widely used in 

furnace fan assemblies. Therefore, use of backward-curved impellers could impact product 

availability by limiting which models can be installed in certain configurations. 

DOE agrees with this feedback based on its findings in related research reports (see 

chapter 3 of this TSD). However, DOE expects that design changes can be made to prevent 

impacts on product availability associated with use of backward-curve impellers. DOE is 

including backward-curved impellers as a design option as a result. DOE requests comment on 

the use of backward-curved impellers and their impact on cost, efficiency, and product 

availability in the Executive Summary of this TSD.

2.5 ENGINEERING ANALYSIS

The engineering analysis (chapter 5 of the TSD) establishes the relationship between 

manufacturing production cost and efficiency for each residential furnace fan. This relationship 
2-26

serves as the basis for cost-benefit calculations in terms of individual consumers, manufacturers, 

and the Nation. Chapter 5 discusses the product classes analyzed, representative baseline units, 

incremental efficiency levels, methodology used to develop manufacturing production costs, 

cost-efficiency curves, impact of efficiency improvements on the considered products, and 

methodology used to extend the analysis to low-shipment-volume product classes. To determine 

the cost to consumers of furnace fans at various efficiency levels, DOE estimated manufacturing 

costs, markups in the distribution chain, installation costs, and maintenance costs. Efficiency 

levels for products included in this rulemaking were calculated according to the proposed DOE 

test procedure.

In the engineering analysis pertaining to residential furnace fans, DOE evaluated a range 

of product efficiency levels and associated manufacturing costs. The purpose of the analysis is to 

estimate the incremental increase to selling prices that would result from increasing efficiency 

levels above the baseline model in each product class. The engineering analysis considers 

technologies not eliminated in the screening analysis. The LCC analysis uses the cost-efficiency 

relationships developed in the engineering analysis. In the Framework Document, DOE

presented plans for its engineering analysis and sought comment on its approach to calculating 

the cost-efficiency relationship for furnace fans, as well as on the selection of commerciallyavailable furnace fans with incrementally increasing efficiency from the baseline model to maxtech for characterizing the efficiencies of furnace fans currently offered for sale. DOE also 

sought comment on how furnace fan efficiency varies with airflow capacity, motor type, motor 

rated horsepower, number of speed control settings, or any other furnace parameter. DOE sought 

information on proprietary designs for the furnace fans under consideration in this rulemaking 

and, if such proprietary designs exist, how DOE can acquire the cost data necessary for 

evaluating these designs. 

In the Framework Document, DOE sought comment on any proprietary designs of which 

it should be aware. As explained in the Framework Document, DOE will consider a proprietary 

design in subsequent analyses only if the technology does not represent a unique path to a given 

efficiency level. If the proprietary design is the only approach available to achieve a given 

efficiency level, then DOE will eliminate the efficiency level from further analysis. DOE will 

reject a standard level that can only be met with a single proprietary technology, because it could 

result in an anticompetitive market, which would be economically unjustifiable. This principle 

has been consistently applied in past DOE rulemakings. However, if a given energy efficiency 

level can be achieved by a number of design approaches, including a proprietary design, DOE 

will continue to examine that efficiency level, in spite of the proprietary nature of that one 

design.

Ingersoll Rand stated that it has a patented housing design. (Ingersoll Rand, Public 

Meeting Transcript, No. 7 at p. 172) However, for the reasons stated in section 2.3.4, DOE did 

not consider housing design improvements as a technology option, because such designs are 

expected to have very little impact on energy efficiency. Thus, Ingersoll Rand’s proprietary 

housing does not represent a unique path to a given efficiency level.

Interested parties commented on the impacts of proprietary motor technologies. Nordyne 

explained that barriers to entry for motor manufacturers, such as aggressive intellectual property
2-27

strategies, have slowed the formation of a cost-competitive market around brushless DC motor 

technology. (Nordyne, No. 31 at p. 3) Rheem stated that, if the energy efficiency standard was

set such that PSC motors did not meet the standard, there might be shortages from the single 

supplier of ECMs. Also, Rheem estimates that this decrease in supply and increase in demand 

could drive up prices for consumers. (Rheem, No. 29 at p. 16) Rheem stated that Regal-Beloit 

produces the majority of their brushless permanent magnet motors and that Rheem uses RegalBeloit's software to control their motors. Even though less-expensive brushless DC motors are 

available, Rheem would have to develop their controls, which prevents Rheem from purchasing 

from vendors other than Regal-Beloit. (Rheem, Public Meeting Transcript, No. 7 at pp. 170-171)

From comments received on the Framework Document and during interviews with 

furnace fan manufacturers, DOE is aware that many manufacturers rely on a single supplier of 

ECMs, Regal Beloit, to produce higher-efficiency furnace fans. DOE recognizes that Regal 

Beloit possesses a number of patents in the brushless direct-current motor space. However, DOE 

is aware that other motor manufacturers, such as Broad Ocean, also offer brushless DC models. 

DOE also expects that furnace fan manufacturers have the ability to use alternative designs, such 

as ECMs with controls designed in-house, as Rheem stated, to achieve the identified efficiency 

levels without using Regal Beloit’s patented technology. DOE expects that competition from 

other motor manufacturers and furnace fan manufacturers developing ECM controls in-house 

will mitigate increases in price and possibly even drive them down. DOE included ECMs as 

technology options in the preliminary analysis. DOE will evaluate the potential for shortages and 

price increases of ECMs under standards in its NOPR analyses.

2.5.1 Baseline Models

In order to analyze technology options for energy efficiency improvements, DOE defined 

a baseline model unit for each furnace fan product class. The baseline model should represent the 

characteristics of furnace fans used in common residential HVAC products sold in a given 

product class. Typically, the baseline model would be a model that just meets current energy 

conservation standards. However, energy conservation standards for furnace fans do not exist. 

As a result, DOE will select baseline models typical of the furnace fans used in the least-efficient 

residential HVAC models offered for sale in the market. In the present case, selection of the 

baseline model for each product class will encompass consideration of furnace fan features and 

performance characteristics such as number of fan motor airflow-control settings, impeller type, 

and fan motor efficiency. DOE sought comment on the selection, appropriate features, and 

performance characteristics of baseline models for each product class. 

Some interested parties commented on the teardown analysis and baseline models. 

Rheem commented that a baseline furnace fan has a sheet metal housing, a forward-curved 

impeller, a PSC or ECM motor, and an electronic control. (Rheem, No. 29 at p. 13) Rheem also 

commented that packaged units that use belt-driven motors are less efficient than packaged units 

using direct-drive motors and are not representative of the market as a baseline. (Rheem, Public 

Meeting Transcript, No. 7 at pp. 164-165) Mortex stated that for the manufactured home market, 

entry-level furnaces might have a shaded pole motor for heating that gets replaced by a kit that 

uses a PSC motor for heavy air-conditioning. (Mortex, Public Meeting Transcript, No. 7 at pp. 

166-167)
2-28

After review of publically-available product literature, teardowns, and discussions with 

manufacturers, DOE found that the baseline furnace fan across all product classes includes: a 

direct-drive PSC motor with 3 or less airflow-control settings, a centrifugal forward-curved 

impeller, and a standard housing design, most often made of sheet-metal. DOE found very few 

commercially-available belt-driven packaged units or manufactured home units that used a 

shaded pole motor. Therefore, these components were not used to describe the baseline unit for 

these product classes. 

2.5.2 Manufacturing Cost Analysis

There are several ways to develop the relationship between cost and performance. DOE

chose to use a component-based engineering analysis, or teardown analysis. This approach 

identifies potential technological paths manufacturers could use to achieve increased product

energy efficiency. DOE purchased “off-the-shelf” units commercially available on the market 

and dismantled them component by component to determine what technologies and designs 

manufacturers currently employ to increase furnace fan energy efficiency. DOE then used 

independent costing methods, along with manufacturer and component-supplier data, to 

estimate the costs of the components. 

DOE determined the efficiency levels corresponding to various design options from 

commercially-available information on products, data submitted by manufacturers, and 

engineering calculations. DOE obtained cost estimates from detailed incremental manufacturing

cost data based on reverse engineering, which include the cost of the product components, labor, 

purchased parts and materials, and investment. DOE estimated manufacturing costs using a 

combination of teardown analysis and manufacturer-supplied estimates. 

2.6 MARKUPS ANALYSIS

DOE uses manufacturer-to-customer markups to convert the manufacturer selling price 

estimates from the engineering analysis to customer prices, which are then used in the LCC and 

PBP analysis and in the manufacturer impact analysis. Retail prices are necessary for the 

baseline efficiency level and all other efficiency levels under consideration. DOE estimates these 

retail prices by applying manufacturer-to-customer markups to the manufacturer selling price 

calculated as part of the engineering analysis.

Before developing markups, DOE defines key market participants and identifies

distribution channels. Generally, the furnace distribution chain includes six market participants: 

(1) distributors; (2) dealers; (3) general contractors; (4) mechanical contractors; (5) installers;

and (6) builders. For the markups analysis, DOE combined mechanical contractors, dealers, and 

installers in a single category labeled “mechanical contractors,” because these terms are used 

interchangeably by the industry. Because builders serve the same function in the HVAC market 

as general contractors, DOE included builders in the “general contractors” category. 

Rheem stated that the furnace fan is a component in a furnace, so the distribution path 

would be the same as a furnace. (Rheem, No. 29 at p. 15) Adjuvant supported DOE's analysis of 
2-29

markups, except that the commenter suggested that manufactured housing should be considered 

a separate distribution channel. (Adjuvant, No. 9 at p. 7) 

DOE is using the same distribution channels for furnace fans as it used for furnaces in a

recent energy conservation standards rulemaking for those products. 76 FR 37408 (June 27, 

2011)

8 DOE believes that this is an appropriate approach, because the vast majority of the 

furnace fans covered in this rulemaking are a component of a furnace. DOE also believes that the 

furnace fans covered in this rulemaking that are a component in a non-furnace HVAC product 

will have similar distribution channels. Manufactured housing furnace fans have a separate 

distribution channel.

Several parties commented on the market and distribution channel for replacement fans. 

Adjuvant stated that the replacement fan market will be very small. (Adjuvant, No. 9 at p. 7)

Johnson Controls stated that certain furnace fan manufacturers provide products for field 

replacement that are considered to be “universal” replacements for the original equipment 

manufacturer’s products; these may include upgrades for motors, and these field replacements 

use a similar distribution path as original products. (Johnson, No. 15 at p. 12) Johnson Controls 

further stated that in the manufactured housing market, the add-on application of air conditioning 

may require a larger, different furnace fan assembly as a field replacement for the heating-only 

furnace fan already installed in the manufactured home. (Johnson, No. 15 at p. 12)

DOE understands that the market for replacement fans is very small, and it has not 

included this distribution channel in the preliminary analysis. DOE requests comment regarding 

whether this channel is large enough to merit inclusion, and, if so, what would be an appropriate 

assumption for its market share.

Regarding estimation of markups for furnace fans, Rheem stated that, because a furnace 

fan is a component in a furnace, the overall markups would be the same as for a furnace. 

(Rheem, No. 29 at p. 15) Ingersoll Rand stated that once in the furnace manufacturer's plant, the 

blower and motor essentially lose their identity as far as margins and markups; they are simply 

part of the furnace and are not priced separately. (Ingersoll Rand, No. 25 at p. 4) 

DOE generally agrees with the comments made by Rheem and Ingersoll Rand and has 

estimated markups for furnace fans using the same approach as it used for furnaces in the recent 

rulemaking for that product. DOE expects this approach to be appropriate because the majority 

of the furnace fans covered in this rulemaking are components of a furnace. DOE also expects 

that the markups for furnace fans used in HVAC products other than furnaces that are covered in 

this rulemaking will have similar markups. 

DOE develops baseline and incremental markups to transform the manufacturer selling 

price into a consumer product price. DOE uses the baseline markups, which cover all of a 

 

8

http://www1.eere.energy.gov/buildings/appliance_standards/residential/residential_furnaces_central_ac_hp_direct_

final_rule_tsd.html
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distributor’s or contractor’s costs, to determine the sales price of baseline models. Incremental 

markups are coefficients that DOE applies to the incremental cost of higher-efficiency models. 

ACEEE stated that the markups associated with ECMs are greater than the markups of 

other variable-speed motors with similar outputs, but that DOE’s analysis for standards 

considerations should be based on costs in a commodity market, in which ECMs are produced in 

large quantity. (ACEEE, No. 19 at p. 6) In response, DOE assumes that the markups on products 

at each considered efficiency level reflect the large production volume and resulting costs that 

would occur in the case of standards at that level.

Johnson Controls stated that products for field replacement have markups that can be 

much different than those on the original product. (Johnson, No. 15 at p. 12) As previously 

stated, DOE understands that the market for replacement fans is a very small share, and it has not 

included this distribution channel in the preliminary analysis.

2.7 ENERGY USE ANALYSIS

The purpose of the energy use analysis is to determine the annual energy consumption of 

furnace fans in representative U.S. homes and to assess the energy savings potential of increased 

fan efficiency. DOE estimated the annual energy consumption of furnace fans at specified energy 

efficiency levels across a range of climate zones. The annual energy consumption includes the 

electricity use by the fan, as well as the change in natural gas, liquid petroleum gas (LPG), 

electricity, or oil use for heat production as result of the change in the amount of useful heat 

provided to the conditioned space as a result of the furnace fan. The annual energy consumption 

of furnace fans is used in subsequent analyses, including the LCC and PBP analysis and the 

national impact analysis.

Lennox stated that the current DOE test procedures for determining furnace fan energy 

consumption (i.e., the test procedures for HVAC equipment) have evolved through the 

cooperative efforts of DOE and industry over the past 25 years. Lennox stated that these test 

procedures contain: uniform provisions for the measurement of furnace fan energy consumption 

in heating and cooling operation; methods to test and rate single-stage, multi-stage, and 

modulating furnaces and air-conditioning systems; statistical methods of establishing ratings 

based on defined confidence levels; and a method to estimate annual furnace fan energy 

consumption for each furnace and air conditioner model tested and rated. (Lennox, No. 23 at pp. 

1-2) 

DOE used the existing DOE test procedures for furnaces and air conditioners to estimate 

heating and cooling mode operating hours for the furnace fan. The power consumption of the 

furnace fan is determined using the individual sample housing unit operating conditions (the 

pressure and airflow) at which a particular furnace fan will operate when performing heating, 

cooling, and continuous circulation functions. The methodology and the data are fully described 

in chapter 7 of this TSD.
2-31

Lennox stated that any reduction in the electrical energy in the blower is offset by an 

increase in primary fuel consumption. (Lennox, No. 23 at p. 3) DOE’s analysis accounts for 

changes in the furnace fan heat contribution, which affects the house heating and cooling load.

Morrison stated that energy consumption by fans varies greatly depending on product 

design, climate, usage patterns, and installation. (Morrison, No. 26 at p. 7) DOE’s analysis 

accounts for the variety of furnace fan designs and field conditions.

In the Framework Document, DOE stated that it planned to use the Energy Information 

Administration’s (EIA) Residential Energy Consumption Survey (RECS)9 to establish a sample 

of households using furnace fans for each furnace fan product class. RECS data provide 

information on the age of furnaces with furnace fans, as well as heating and cooling energy use 

in each household. The survey also includes household characteristics such as the physical 

characteristics of housing units, household demographics, information about other heating and 

cooling products, fuels used, energy consumption and expenditures, and other relevant data. 

DOE uses the household samples not only to determine furnace fan annual energy consumption, 

but also as the basis for conducting the LCC and PBP analysis.

Johnson Controls stated that the RECS 2005 data would require some modification in 

light of the changes to the housing market and the HVAC market since that time. It noted that

add-on or replacement HVAC markets have been significantly altered by the availability and 

scope of Federal tax credits, weatherization programs, utility rebates, and manufacturer rebates 

to home owners. (Johnson, No. 15 at p. 13) Lennox made similar comments to those made by 

Johnson Controls regarding the use of RECS 2005 data and stated that RECS 2009 should be 

used. (Lennox, Public Meeting Transcript, No. 7 at pp. 190-191)

In response, DOE notes that RECS 2009 furnace heating and cooling energy use data 

were not available for the preliminary analysis. DOE is using RECS 2005 heating and cooling 

energy use data to determine heating and cooling operating hours. RECS data do not provide any 

information about the furnace fan, so using RECS 2009 would not capture furnace fan market 

trends. DOE used data from RECS 2009,10 American Housing Survey (AHS) 2009,11 and the 

Census Bureau12

The power consumption (and overall efficiency) of a furnace fan depends on the speed at 

which the motor operates, the external static pressure difference across the fan, and the airflow 

through the fan. To calculate furnace fan electricity consumption, DOE determined the operating 

to project household weights and household characteristics in 2018, which is 

the compliance date of any new energy efficiency standard for furnace fans. These adjustments

account for housing market changes since 2005, as well as for projected product and 

demographic changes.

 

9 Energy Information Administration, 2005 Residential Energy Consumption Survey (Available at: 

http://www.eia.doe.gov/emeu/recs). 10 http://www.eia.gov/consumption/residential/data/2009/ 11 http://www.census.gov/housing/ahs/data/national.html 12 http://www.census.gov/popest/
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conditions (the pressure and airflow) at which a particular furnace fan will operate in each RECS 

housing unit when performing heating, cooling, and continuous-circulation functions.

The Consortium for Energy Efficiency (CEE) stated that duct pressure affects airflows 

and motor performance and must be considered in any energy savings calculation. CEE stated 

that systems are often analyzed using duct pressures of 0.2 in. wc, but in practice only a small 

percentage of systems operate in that range, even during the heating season. CEE stated that the 

external static pressure measured in 81 homes in heating mode averaged 0.55 in. wc. (CEE, No. 

22 at p. 1) Rheem stated that DOE should assume that external static pressure is consistent with

the manufacturer’s installation instructions. (Rheem, No. 29 at p. 15)

DOE gathered field data from available studies and research reports to determine an 

appropriate distribution of ESP values. DOE compiled over 1,300 field ESP measurements from 

several studies that included furnace fans in single-family and manufactured homes in different 

regions of the country. The average ESP value in the cooling operating mode from these studies 

results in an average 0.65 in. wc for single-family households and 0.30 in. wc for manufactured 

homes. The full methodology and the data are described in chapter 7 of this TSD.

Johnson Controls stated that determining the required furnace fan operating hours in 

heating mode is included in the blower energy (BE) factor already used as part of the AFUE 

calculation process, so estimating furnace fan electrical energy use can be done with some 

modifications. (Johnson, No. 15 at p. 13) DOE determined furnace fan operating hours in 

heating mode by calculating the furnace burner operating hours and adjusting them for delay 

times between burner and fan operation. Burner operating hours are a function of annual house 

heating load, furnace efficiency, and furnace input capacity.

Adjuvant stated that the number of hours per year used for low-speed air circulation is the 

biggest unknown in the energy use analysis and urged DOE to acquire some field data for this 

variable. (Adjuvant, No. 9 at p. 7) CEE stated that out of 70 homeowners surveyed in a study it 

sponsored, 70 percent of respondents never used the "Fan On" mode and always used the fan in 

"Auto" mode with the fan only running for heating or cooling; 13 percent of respondents used 

the "Fan On" setting all the time; and 17 percent of respondents alternated between the two 

settings. (CEE, No. 22 at pp. 1-2) Johnson Controls stated that determining continuous 

circulation hours as equal to all of the remaining hours after heating and cooling operation is not 

justifiable. Johnson Controls stated that while many homes use the continuous furnace fan 

option, there are not sufficient data to establish that this operating condition is a default mode. It 

added that home thermostats do not always include this operational mode, and there are vast 

differences in the actual operating modes available for continuous fan or ventilation options. 

(Johnson, No. 15 at p. 13)

DOE did not assume that continuous circulation hours are equal to all of the remaining 

hours after heating and cooling operation. To estimate use of continuous circulation in the 

sample homes, DOE evaluated the available studies, which include a recent survey in 
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Minnesota,13 a 2009 program evaluation report from Wisconsin,

14 and 2003 Wisconsin field 

monitoring of residential furnaces.

15 DOE did not use these data directly, however, because it 

believes they are not representative of consumer practices for the U.S. as a whole. In these 

States, many homes have low air infiltration and there is a high awareness of indoor air quality 

issues, which could lead to significant use of continuous circulation. To develop U.S. average 

values, DOE modified the data from the upper Midwest using information from manufacturer 

product literature and consideration of climate conditions in other regions. The continuous 

circulation hours that DOE used are described in chapter 7 of this TSD. DOE requests comments 

on its characterization of use of continuous circulation, and information that would support use 

of alternative assumptions.

Morrison stated that the analysis accounts for heating and cooling hours, and the 

remaining hours are assigned to ventilation, leaving no time for standby power. (Morrison, 

Public Meeting Transcript, No. 7 at pp. 191-192) DOE estimated the number of hours in standby 

mode for the sample households that use continuous circulation some of the time and for those

that never use continuous circulation.

Ingersoll Rand stated that the electrical energy used [by the fan] for cooling operation or 

heat pump heating operation should not be part of this rule, as that energy is already part of the 

SEER and HSPF ratings for air conditioners and heat pumps. (Ingersoll Rand, No. 25 at p. 1)

Johnson Controls stated that furnace fan operating hours for air-conditioning applications are 

included in the SEER calculation, and the same consideration is found in the SEER and HSPF 

for heat pump applications. Johnson Controls stated that estimating such furnace fan energy use 

in this rulemaking is redundant and overstates electrical usage. (Johnson, No. 15 at p. 13)

Adjuvant urged DOE to avoid double-counting savings from already covered air-conditioning 

products. (Adjuvant, No. 9 at p. 11) 

As previously discussed, DOE recognizes that the energy savings in cooling mode from 

higher-efficiency furnace fans used in some higher-efficiency CAC and heat pumps was already 

accounted for in the analysis of standards on those products. To avoid double-counting, the 

analysis for furnace fans does not include furnace fan electricity savings that were counted in 

DOE’s analysis for CAC and heat pump products. That analysis considered savings from

households with a CAC or heat pump at SEER 15 or above who would already have an ECM 

fan. Correspondingly, the base case efficiency distribution of fans used in the present analysis 

considers the presence of those ECM fans in future CAC or heat pump shipments. Since the 

energy savings from the considered fan efficiency levels are measured relative to the base case 

efficiencies, any savings reported here are over and above those counted in the CAC and heat 

pump rulemaking.

 

13 Provided in CEE, No. 22 at pp. 1-2. 14 State of Wisconsin, Public Service Commission of Wisconsin, Focus on Energy Evaluation Semiannual Report, 

Final (April 8, 2009). 15 Pigg, S. 2003, Electricity Use by New Furnaces: A Wisconsin Field Study (October 2003) (Available at 

http://www.doa.state.wi.us/docview.asp?docid=1812).
2-34

Several parties commented on the possibility of consumers using higher-efficiency 

furnace fans more than baseline furnace fans. Such change in behavior when operating costs 

decline is known as a rebound effect. Rheem stated that a rebound effect should be considered 

for furnace fans. It cited an evaluation report from Wisconsin16 that indicates that a considerable 

number of homeowners who purchase ECM furnaces significantly increase the frequency with 

which they operate their furnace fan subsequent to the installation of the ECM furnace, thereby 

negating some or all of the energy savings from the fan. (Rheem, No. 29 at pp. 15-16) ACEEE 

stated that the rebound effect is likely to be small. It noted that some consumers may adopt fulltime circulation when they buy advanced air handlers, but estimating this kind of “rebound” is 

problematic because of the large uncertainties about the fraction of purchasers who would 

consider this mode but do not use it currently. (ACEEE, No. 19 at p. 6) AHRI stated that the 

idea of a rebound effect for a furnace fan does not hold, as consumers would not react if their 

blower is more efficient. (AHRI, Public Meeting Transcript, No. 7 at pp. 193-194) Morrison 

stated that it is not clear what percentage of consumers use the continuous ventilation mode, so 

an assumption might need to be made about a rebound effect. (Morrison, No. 26 at p. 8)

After reviewing the available information, DOE concluded that inclusion of a rebound 

effect in its analysis is warranted. DOE used the aforementioned report from Wisconsin to 

estimate the extent to which increased use of continuous circulation under a standard requiring 

ECM furnace fans is likely to cancel out some of the savings from such a fan. The specific 

assumptions are described in chapter 7 of this TSD. DOE requests comments on the 

reasonableness of the values that it used to characterize this rebound effect.

2.8 LIFE-CYCLE COST AND PAYBACK PERIOD ANALYSIS

In determining whether an energy efficiency standard is economically justified, DOE 

considers the economic impact of potential standards on customers. The effect of new or 

amended standards on individual customers usually includes a reduction in operating cost and an 

increase in purchase cost. DOE uses the following two metrics to measure consumer impacts:

• LCC (life-cycle cost) is the total customer cost of an appliance or product, generally over 

the life of the appliance or product, including purchase and operating costs. The latter 

consist of maintenance, repair, and energy costs. Future operating costs are discounted to 

the time of purchase and summed over the lifetime of the appliance or product.

• PBP (payback period) measures the amount of time it takes customers to recover the 

assumed higher purchase price of a more energy-efficient product through reduced 

operating costs.

DOE analyzed the net effect of potential furnace fan standards on consumers by 

calculating the LCC and PBP using the engineering performance data, the energy-use data, and 

the markups. Inputs to the LCC calculation include the installed cost to the consumer (purchase 

 

16 State of Wisconsin, op. cit.
2-35

price plus installation cost), operating expenses (energy expenses, and, if applicable, repair costs 

and maintenance costs), the lifetime of the product or other defined period of analysis, and a 

discount rate. Inputs to the payback period calculation include the installed cost to the consumer 

and first-year operating costs.

DOE performed the LCC and PBP analyses using a spreadsheet model combined with 

Crystal Ball (a commercially-available software program used to conduct stochastic analysis 

using Monte Carlo simulation and probability distributions) to account for uncertainty and 

variability among the input variables. Each Monte Carlo simulation consists of 10,000 LCC and 

PBP calculations. The model performs each calculation using input values that are either 

sampled from probability distributions and household samples or characterized with single point 

values. The analytical results include a distribution of 10,000 data points showing the range of 

LCC savings and PBPs for a given efficiency level relative to the base-case efficiency forecast.

Adjuvant stated that the furnace fan lifetime is essentially the life of the furnace. 

(Adjuvant, No. 9 at p. 8) Johnson Controls stated that furnace fan lifetimes are considered to the 

equivalent to the life of the furnace, typically considered as 20 years with normal maintenance 

and inspections. (Johnson, No. 15 at p. 14) Ingersoll Rand stated that the service life of the 

motor and bearings is on the same order as that of the furnace; the service life of the electronics 

for an ECM should be expected to be lower, but is not yet fully characterized. (Ingersoll Rand, 

No. 25 at p. 4) Rheem stated that the actual lifetime of a furnace fan is generally dependent on 

the life of the motor, which is dependent on bearing life, which in turn is dependent on the 

number of on/off cycles and bearing temperature. (Rheem, No. 29 at p. 16)

DOE modeled furnace fan lifetime based on the distribution of furnace lifetimes

developed for the recent furnace rulemaking.17 DOE assumed that the lifetime is the same for 

fans at different efficiency levels. DOE modeled fan motor failure and replacement as a repair 

cost that affects a certain percentage of fans, as discussed below.

Ingersoll Rand stated that the blower wheel should never need to be serviced, nor should 

the motor or bearings. (Ingersoll Rand, No. 25 at p. 4) Johnson Controls stated that maintenance 

costs are the same for various furnace fan products. (Johnson, No. 15 at p. 14) Adjuvant stated 

that maintenance costs for more-efficient furnace fans are highly unlikely to be different than for 

less-efficient models. (Adjuvant, No. 9 at pp. 7-8) DOE agrees with the comments and assumed 

that maintenance costs are the same for furnace fans at different efficiency levels.

Johnson Controls stated that repair costs for furnace fans are basically the cost of 

replacing the motor, as there are very few failures of the components other than the motor; as

most residential HVAC products are covered by 10-year parts warranties, there are no repair 

costs during that time frame. Adjuvant recommended that DOE attempt to acquire data on the 

size of the fan motor replacement market and the average cost of replacements for each motor 

type. (Adjuvant, No. 9 at pp. 7-8) Ingersoll Rand stated that the introduction of electronic drives 

 

17http://www1.eere.energy.gov/buildings/appliance_standards/residential/residential_furnaces_central_ac_hp_direct

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has led to new failure modes for certain fan motors, but public data on such failures are

extremely limited. (Ingersoll Rand, No. 25 at p. 4) Johnson Controls stated that the life of ECMs

may be considered the same [as PSC motors] except in those geographical areas where large 

variations in the electrical power grid can occur, or the weather patterns provide increased 

exposure to lightning strikes. (Johnson, No. 15 at p. 14)

DOE included motor replacement as a repair cost for a fraction of furnace fans. To 

estimate rates of fan failure, DOE developed a distribution of fan motor lifetime (expressed in 

operating hours) by motor size using data from DOE’s rulemaking for small electric motors.

18

DOE then paired these data with the calculated number of annual operating hours for each 

sample furnace. Motor costs were based on costs developed in the engineering analysis. The 

labor time and costs were based on RS Means data.

19,20

Johnson Controls stated that, outside the warranty period, the replacement costs for 

ECMs can be three to five times the replacement cost of PSC motors due to greater complexity 

and the electronic controls required to use them. (Johnson, Public Meeting Transcript, No. 7 at p. 

203) Adjuvant stated that in the case of motor replacement, permanent magnet DC motors are 

more expensive than the PSC motors that would be replaced. (Adjuvant, No. 9 at pp. 7-8)

DOE had no information indicating the extent to which consumers would replace a fan 

PSC motor with an ECM, so it assumed that when replacement is necessary, consumers replace 

the failed motor with the same type of motor.

Rheem stated that the discount rate for furnace fans would be the same as it is for 

furnaces. (Rheem, No. 29 at p. 16) DOE used the same discount rates for furnace fans as it used 

in the recent rulemaking for furnaces.

To estimate the share of consumers that would be affected by an energy conservation

standard at a particular efficiency level, DOE’s LCC and PBP analysis considers the projected 

distribution (i.e., market shares) of product efficiencies in the compliance year under the base 

case (i.e., the case without new or amended energy conservation standards).

Adjuvant stated that there is a strong trend toward more-efficient air handlers, much of it 

driven by incentives and programs such as ENERGY STAR, but the trends are more obvious in 

some parts of the country than in others. (Adjuvant, No. 9 at p. 9) Morrison stated that the 

adoption rate of higher-efficiency products has increased in recent years as higher-efficiency 

HVAC systems receive incentives from local, State, and Federal government and utility 

programs. (Morrison, No. 26 at p. 8) ACEEE stated that the efficiency distribution absent 

efficiency standards is uncertain and should not be speculated upon by DOE. (ACEEE, No. 19 at 

p. 6) 

 

18 http://www1.eere.energy.gov/buildings/appliance_standards/commercial/sem_finalrule_tsd.html 19 RS Means Company Inc., RS Means Residential Cost Data (2011). 20 RS Means Company Inc., Facilities Maintenance & Repair Cost Data (2011).
2-37

DOE agrees that market trends in HVAC system efficiency influence the market shares 

of different furnace fan efficiency levels. However, DOE found very limited historical data upon 

which to estimate either current shares or recent trends. To start, DOE used Rheem’s comment, 

stating that the market share for ECM motors has increased from 10 percent to 30 percent within 

the last five years. (Rheem, No. 29 at p. 3) To estimate the market share for ECM motors in 

2018, DOE developed data on the share of models in each product class with an ECM design.21

2.9 SHIPMENTS ANALYSIS

The resulting estimate for 2018 is a 45-percent share for ECM fans out of the overall market for 

furnace fans. The market shares of each ECM fan efficiency level are derived from the data on 

number of models. No such data were available for the PSC fan efficiency levels, so DOE 

assumed that half of shipments are at the baseline level and half are “improved PSC” fans. There 

are currently no models of PSC with a controls design, so DOE assumed zero market share for 

such units. The details of DOE’s approach are described in chapter 8 of this TSD. DOE requests 

comments on its estimate of the base-case efficiency distribution of furnace fans in 2018, as well 

as data that might support use of different assumptions.

DOE uses forecasts of product shipments to calculate the national impacts of standards 

on energy use, NPV, and future manufacturer cash flows. DOE develops shipment forecasts 

based on an analysis of key market drivers for each product. 

The vast majority of furnace fans are shipped installed in furnaces, so DOE estimated

furnace fan shipments by projecting furnace shipments in three market segments: (1) 

replacements; (2) new housing; and (3) new owners in buildings that did not previously have a 

gas furnace.

To forecast furnace replacement shipments, DOE developed retirement functions for 

furnaces from the lifetime estimates and applied them to the existing products in the housing 

stock. The existing stock of products is tracked by vintage and developed from historical 

shipments data. 

Adjuvant stated that DOE should not use estimates of furnace fan lifetime to estimate 

shipments, as this leads to shipments estimates that are significantly different than manufacturer 

data. (Adjuvant, No. 9 at p. 9) DOE’s shipments analysis uses a distribution of furnace lifetimes

to estimate furnace replacement shipments.

To forecast shipments to the new housing market, DOE utilized forecasted new housing 

construction and historic saturation rates of various furnace and cooling product types in new 

housing. DOE used AEO 2011 for forecasts of new housing. Furnace saturation rates in new 

housing are provided by the U.S. Census Bureau’s Characteristics of New Housing.

22

 

21 DOE used the AHRI Directory of Certified Furnace Equipment (Available at: 

http://www.ahridirectory.org/ahridirectory/pages/home.aspx) as well as manufacturer product literature. 22 Available at: http://www.census.gov/const/www/charindex.html.
2-38

Johnson Controls stated that there is a market for replacement fans due to add-on 

application of air conditioning in manufactured housing and that these shipments might be 

estimated using information from a source such as the Manufactured Housing Institute. (Johnson, 

No. 15 at p. 15) DOE did not include this market segment, because it was not able to find data 

that would allow estimation of shipments.

In the Framework Document, DOE stated it would consider the market segment 

consisting of homes built without central heating in which a furnace is later installed. Adjuvant 

stated that conversions from non-ducted systems to ducted systems will be very rare, because 

installing a duct system in an existing home that does not yet have one can be daunting and 

expensive. (Adjuvant, No. 9 at p. 8) DOE agrees that the magnitude of conversions from nonducted systems to ducted systems is likely to be very small. However, DOE did include a market 

segment consisting of households that have central air conditioning alone or central air 

conditioning and electric heating and choose to install a gas furnace.

DOE considered whether standards that require more-efficient furnace fans would have 

an impact on furnace shipments. Ingersoll Rand stated that an increase in repair (instead of 

replacement) is likely to occur as a result of higher efficiency standards, as well as a decrease in 

sales. (Ingersoll Rand, Public Meeting Transcript, No. 7 at p. 224) Johnson Controls stated that 

standards would impact the manufactured housing market for add-on cooling applications and 

might impact the shipment of furnace fans for certain applications. (Johnson, No. 15 at p. 15) 

Adjuvant stated that given the success of much more efficient (and expensive) furnace fan 

systems in many markets today, it is unlikely that a standard requiring high-efficiency furnace 

fans would have an adverse effect on shipments. (Adjuvant, No. 9 at p. 9) 

DOE believes that, consistent with economic theory and its past practice, it is reasonable 

to expect that standards that result in higher furnace prices will have some dampening effect on 

sales. Some consumers might choose to repair their existing furnace rather than purchase a new 

one. To estimate the impact of the price increase for the considered efficiency levels, DOE used 

the relative price elasticity approach that was applied in the 2011 furnace standards 

rulemaking.23

2.10 NATIONAL IMPACT ANALYSIS

This approach gives some weight to the operating cost savings from higherefficiency products. The impact of higher furnace prices (due to more-efficient fans) is expressed 

as a percentage drop in market share for each year during the analysis period. 

The NIA assesses the NES and the NPV from a national perspective of total consumer 

costs and savings expected to result from new or amended energy conservation standards at 

specific efficiency levels. DOE determined the NPV and NES for the standard levels considered 

for the furnace fan product classes analyzed. To make the analysis more accessible and 

transparent to all interested parties, DOE prepared a Microsoft Excel spreadsheet that uses 

 

23http://www1.eere.energy.gov/buildings/appliance_standards/residential/residential_furnaces_central_ac_hp_direct

_final_rule_tsd.html
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typical values (as opposed to probability distributions) as inputs. To assess the effect of input 

uncertainty on NES and NPV results, DOE has developed its spreadsheet model to conduct 

sensitivity analyses by running scenarios on specific input variables. 

Analyzing impacts of potential energy conservation standards for residential furnace fans 

requires comparing projections of U.S. energy consumption with new or amended energy 

conservation standards against projections of energy consumption without the standards. The 

forecasts include projections of annual appliance shipments, the annual energy consumption of 

new appliances, and the purchase price of new appliances.

A key component of DOE’s NIA analysis is the energy efficiencies forecasted over time 

for the base case (without new standards) and each of the standards cases. The forecasted 

efficiencies represent the annual shipment-weighted energy efficiency of the products under 

consideration during the forecast period (i.e., from the assumed compliance date of a new 

standard to 30 years after compliance is required). 

Johnson Controls stated that residential tax credits, weatherization programs, utility 

rebates, and manufacturer-to-consumer rebates drive the consumer toward purchasing highefficiency HVAC products that require high-efficiency furnace fans, so changes in those 

incentives will drive furnace fan efficiency levels. (Johnson, No. 15 at p. 14) Johnson Controls 

stated that, because furnace fan efficiency is already considered in the efficiency rating for air 

conditioners and heat pumps, the energy efficiency standards for those products will drive the 

long-term change in furnace fan efficiency. (Johnson, No. 15 at p. 15) 

DOE agrees that trends in HVAC product efficiency due to either future standards or 

other incentives are a major factor driving furnace fan efficiency. However, it is uncertain to 

what extent incentives will play a role after 2018 and to what degree future standards for

residential HVAC products will require high-efficiency furnace fans. For this preliminary 

analysis, DOE derived a growth rate in the market share of ECM fans by extrapolating the trend 

from 2005, when the ECM share was 10 percent, to 2010, when it was approximately 30 percent. 

In so doing, DOE considered the favorable cost-effectiveness of ECM fans and assumed that 

their market share would peak and level off at 79 percent. DOE requests comments on the 

reasonableness of its approach and information that would support use of alternative 

assumptions.

To estimate the impact that standards may have in the year compliance is required, DOE 

has generally used a “roll-up” scenario, a “shift” scenario, or both in its standards rulemakings. 

Under the “roll-up” scenario, DOE assumes: (1) product efficiencies in the base case that do not 

meet the standard level under consideration would “roll-up” to meet the new standard level; and 

(2) product efficiencies above the standard level under consideration would not be affected. 

Under the “shift” scenario, DOE retains the pattern of the base-case efficiency distribution but 

re-orients the distribution at and above the new minimum energy conservation standard. DOE 

will evaluate whether one of these approaches is more reasonable for furnace fans or whether it 

would be preferable to use both scenarios in its calculation of national impacts.
2-40

AHRI stated that the only efficiency change that makes sense is a roll-up scenario. 

(AHRI, Public Meeting Transcript, No. 7 at pp. 230) Adjuvant stated that the efficiency step is 

fairly large for a furnace fan standard that required a permanent-magnet, variable-speed DC 

motor, and there would be limited additional efficiency potential; according to Adjuvant, this 

strongly suggests that DOE should use a “roll up” scenario for estimating the impacts of the 

standards in this case. (Adjuvant, No. 9 at p. 9) DOE agrees with these comments and has used a 

“roll up” scenario for estimating the impacts of the potential standards for furnace fans. To be 

consistent with the assumption regarding base-case efficiency after the compliance year, DOE 

assumed that for each standards case, the efficiency distribution in each product class remains 

unchanged after 2018.

2.10.1 National Energy Savings Analysis

The inputs for determining the national energy savings for each product analyzed are: (1) 

annual energy consumption per unit; (2) shipments; (3) product or equipment stock; (4) national 

energy consumption; and (5) site-to-source conversion factors. DOE calculated the national 

energy consumption by multiplying the number of units (stock) of each product (by vintage or 

age) by the unit energy consumption (also by vintage). Vintage represents the age of the product. 

DOE calculated annual NES based on the difference in national energy consumption for the base 

case (without new efficiency standards) and for each higher efficiency standard. DOE estimated 

energy consumption and savings based on site energy and converted the electricity consumption 

and savings to source (primary) energy using annual conversion factors derived from the most 

recent version of the National Energy Modeling System (NEMS). Cumulative energy savings are 

the sum of the NES for each year over the timeframe of the analysis.

DOE has historically presented NES in terms of primary energy savings. DOE has 

recently published a Statement of Policy regarding its intent to incorporate full-fuel-cycle (FFC)

metrics into its analyses, and outlining a proposed approach. DOE stated that it intends to 

calculate FFC energy and emission impacts by applying conversion factors generated by the 

Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model to 

the NEMS-based results currently used by DOE. 76 FR 51281 (Aug. 18, 2011). Additionally, 

DOE will review alternative approaches to estimating these factors and may decide to use a 

model other than GREET to estimate the FFC energy and emission impacts in any particular 

future appliance efficiency standards rulemaking. For this preliminary analysis, DOE calculated

FFC energy savings using a NEMS-based methodology described in appendix 10-B. Chapter 10 

of this TSD presents both the primary NES and the FFC energy savings for the considered 

candidate standard levels (CSLs).

2.10.2 Net Present Value Analysis

The inputs for determining NPV are: (1) total annual installed cost; (2) total annual 

savings in operating costs; (3) a discount factor to calculate the present value of costs and 

savings; (4) present value of costs; and (5) present value of savings. DOE calculated net savings 

each year as the difference between the base case and each standards case in terms of total 

savings in operating costs versus total increases in installed costs. DOE calculated savings over 

the lifetime of products shipped in the forecast period. DOE calculated NPV as the difference 

between the present value of operating cost savings and the present value of total installed costs. 
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DOE used a discount factor based on real discount rates of 3 and 7 percent to discount future 

costs and savings to present values.

For the NPV analysis, DOE calculates increases in total installed costs as the difference 

in total installed cost between the base case and standards case (i.e., once the standards take 

effect). Because the more-efficient products bought in the standards case usually cost more than 

products bought in the base case, cost increases appear as negative values in the NPV.

DOE expresses savings in operating costs as decreases associated with the lower energy 

consumption of products bought in the standards case compared to the base efficiency case. 

Total savings in operating costs are the product of savings per unit and the number of units of 

each vintage that survive in a given year.

Adjuvant urged DOE to focus on use of the 3-percent discount rate in its analyses, 

because today’s energy and climate environment speaks forcefully for the use of a discount rate 

that is a social discount rate, rather than one related to the cost of private capital. (Adjuvant, No. 

9 at p. 10) DOE estimates the NPV of consumer benefits using both a 3-percent and a 7-percent 

real discount rate. DOE uses these discount rates in accordance with guidance provided by the 

Office of Management and Budget (OMB) to Federal agencies on the development of regulatory 

analysis. (OMB Circular A-4 (Sept. 17, 2003), section E, “Identifying and Measuring Benefits 

and Costs”)

2.11 CONSUMER SUBGROUP ANALYSIS

At the NOPR stage of this rulemaking, DOE will conduct a LCC subgroup analysis. A 

consumer subgroup comprises a subset of the population that may be affected disproportionately 

by new or revised energy conservation standards (e.g., low-income consumers, seniors). The 

purpose of a subgroup analysis is to determine the extent of any such disproportional impacts. 

Regal Beloit stated that the homebuilder market should be considered a consumer 

subgroup, as this market typically utilizes the lowest-cost, least-efficient system. (Regal Beloit, 

No. 32 at p. 5) DOE’s analysis accounts separately for new construction and replacement

markets. In the LCC spreadsheet, the analytical results are reported separately for the two 

markets, thereby capturing the impacts of potential standards in the new construction market.

Johnson Controls stated that manufactured housing should be considered as a subgroup 

due to its unique requirements for product design under the HUD codes, application and market 

considerations, and due to the economic conditions of that home owner group. (Johnson, No. 15 

at p. 16) Mortex also stated that DOE should consider manufactured housing as a subgroup. 

(Mortex, Public Meeting Transcript, No. 7 at pp. 233-234) Fans used in manufactured housing 

furnaces are a separate product class for this rulemaking, so they are analyzed separately in the 

LCC and PBP analysis. Therefore, no subgroup analysis is needed.
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2.12 MANUFACTURER IMPACT ANALYSIS

In the NOPR phase, DOE will perform a manufacturer impact analysis (MIA) to estimate 

the financial impact of potential energy conservation standards on residential furnace fan 

manufacturers, as well as to calculate the impact of such standards on employment and 

manufacturing capacity. The MIA has both quantitative and qualitative aspects. The quantitative 

part of the MIA relies on the government regulatory impact model (GRIM), an industry-cashflow model customized for these industries. The GRIM inputs are information on the industry 

cost structure, shipments, and revenues. This includes information from many of the analyses 

described above, such as manufacturing costs and prices from the engineering analysis and 

shipments forecasts. The key GRIM output is the industry net present value (INPV). Different 

sets of input assumptions (scenarios) will produce different results. The qualitative part of the 

MIA addresses factors such as product characteristics, characteristics of particular firms, and 

market and product trends, and it also includes assessment of the impacts of standards on 

manufacturer subgroups. Chapter 12 of the TSD describes the MIA in further detail.

DOE conducts each MIA in three phases. In Phase I, DOE creates an industry profile to 

characterize the industry and identify important issues that require consideration. DOE 

performed preliminary manufacturer interviews for the preliminary analysis as part of its Phase I 

activities. In Phase II, DOE prepares an industry cash-flow model and interview questionnaire to 

guide subsequent discussions. In Phase III, DOE interviews manufacturers and assesses the 

impacts of standards quantitatively and qualitatively. DOE assesses industry and subgroup cash 

flow and NPV using the GRIM. DOE then assesses impacts on competition, manufacturing 

capacity, employment, and regulatory burden based on manufacturer interview feedback and 

discussions.

Interested parties commented on the cumulative regulatory burden associated with this 

rulemaking. AHRI warned that with new certification and enforcement standards also being 

discussed, DOE requirements could potentially be so burdensome to manufacturers that the 

industry will be bankrupt in 20 years. (AHRI, Public Meeting Transcript, No. 7 at p. 264) 

Rheem provided a list of other regulations with which it will have to comply in addition to 

furnace fan standards that it suggests DOE should consider when evaluating cumulative 

regulatory burden, including: (1) California emissions requirements for furnaces; (2) other 

rulemakings associated with furnaces and boilers, CAC and heat pump products, water heaters, 

direct heating equipment, and pool heaters; (3) certification and enforcement requirements; (4) 

State building code requirements; (5) SCAQMD Rule 1111; and (6) CSA C823. (Rheem, Public 

Meeting Transcript, No. 7 at pp. 248-249; Rheem, No. 29 at p. 14; Rheem, No. 29 at p. 17)

AHRI and Johnson Controls agreed with Rheem, adding EPA programs like ENERGY STAR to 

the list of regulatory burdens that furnace fan manufacturers face. (AHRI, Public Meeting 

Transcript, No. 7 at p. 248; Johnson, Public Meeting Transcript, No. 7 at pp. 249-250) Johnson 

Controls also added that regulations for similar commercial products, changes in refrigerant 

requirements, NOx emissions requirements, weatherization programs, and utility requirements 

will all impact furnace fan manufacturers as well. (Johnson, Public Meeting Transcript, No. 7 at 

pp. 249-250)

DOE recognizes that while any one regulation may not impose a significant burden on 

manufacturers, the combined effects of several impending regulations may have serious 
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consequences for some manufacturers, groups of manufacturers, or an entire industry. Assessing 

the impact of a single regulation may overlook this cumulative regulatory burden. As part of the 

preliminary manufacturer impact analysis (MIA), DOE assessed the cumulative regulatory 

burden by identifying and characterizing other significant product-specific regulations that could 

affect furnace fan manufacturers. Details of the cumulative regulatory burden assessment for the 

preliminary MIA are presented in chapter 12 of this TSD. DOE considered in the preliminary 

MIA assessment of cumulative regulatory burden the regulations presented by interested parties. 

DOE evaluates the impacts of the cumulative regulatory burden in subsequent phases of the 

manufacturer impact analysis, which will occur during the NOPR phase of this rulemaking. 

2.13 EMPLOYMENT IMPACT ANALYSIS

The adoption of energy conservation standards can affect employment both directly and 

indirectly. Direct employment impacts are changes in the number of employees at the plants that 

produce the covered products, along with affiliated distribution and service companies. DOE will 

evaluate direct employment impacts in the MIA.

Indirect employment impacts may result from expenditures shifting between goods (the 

substitution effect) and changes in income and overall expenditure levels (the income effect) that 

occur due to standards. DOE defines indirect employment impacts from standards as net jobs 

eliminated or created in the general economy as a result of increased spending driven by 

increased product prices and reduced spending on energy.

The indirect employment impacts will be investigated in the employment impact analysis 

using the Pacific Northwest National Laboratory’s “Impact of Sector Energy Technologies” 

(ImSET) model.24

2.14 UTILITY IMPACT ANALYSIS

The ImSET model was developed for DOE’s Office of Planning, Budget, and 

Analysis to estimate the employment and income effects of energy-saving technologies in 

buildings, industry, and transportation. Compared with simple economic multiplier approaches, 

ImSET allows for more complete and automated analysis of the economic impacts of energy 

conservation investments.

To estimate the impacts of potential energy conservation standards for furnace fans on 

the electric utility industry, DOE will use a variant of the EIA’s National Energy Modeling 

System called NEMS-BT.25

 

24 Roop, J. M., M. J. Scott, and R. W. Schultz, ‘‘ImSET: Impact of Sector Energy Technologies,’’ PNNL–15273. 

Pacific Northwest National Laboratory (2005).

NEMS is a large, multi-sectoral, partial-equilibrium model of the 

25 For more information on NEMS, please refer to the U.S. Department of Energy, Energy Information 

Administration documentation. A useful summary is National Energy Modeling System: An Overview 2000, 

DOE/EIA-0581 (March 2000), available at: http://tonto.eia.doe.gov/ftproot/forecasting/05812000.pdf. EIA approves 

use of the name NEMS to describe only an official version of the model without any modification to code or data. 

Because this analysis entails some minor code modifications and the model is run under various policy scenarios 
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U.S. energy sector that EIA has developed over several years, primarily for the purpose of 

preparing the AEO. NEMS produces a widely recognized forecast for the United States through 

2035 and is available to the public. 

The utility impact analysis is a comparison between the NEMS-BT model results for the 

base case and standard cases. Outputs of the utility impact analysis usually parallel results that 

appear in the latest AEO, with some additions. The utility impact analysis reports the changes in 

installed capacity and generation that result from each standard level by plant type. DOE will 

model the anticipated energy savings impacts from potential amended energy conservation 

standards using NEMS-BT to generate forecasts that deviate from the AEO Reference Case.

NEEP stated that DOE should quantify the benefit of demand reduction in financial 

terms. (NEEP, No. 16 at p. 4) Adjuvant stated that DOE has not carried through the utility 

impact analysis to the point where it estimates the economic impact of the reduction in the need 

for new generation capacity on all electricity consumers – a rate impacts benefit for all 

ratepayers. Adjuvant stated that this is a serious shortcoming in this part of the analysis and 

urged the Department to estimate these impacts and make them public as part of this rulemaking. 

(Adjuvant, No. 9 at pp. 10-11) 

DOE plans to use NEMS-BT to assess the impacts of the reduced need for new electric 

power plants and infrastructure projected to result from standards. In NEMS-BT, changes in 

power generation infrastructure affect utility revenue requirements, which in turn affect 

electricity prices. DOE plans to estimate the impact on electricity prices associated with each 

considered TSL. Although the aggregate benefits for electricity users are potentially large, there 

may be negative effects on some of the entities involved in electricity supply, particularly power 

plant providers and fuel suppliers. Because there is uncertainty about the extent to which the 

benefits for electricity users from reduced electricity prices would be a transfer from actors 

involved in electricity supply to electricity consumers, DOE has concluded that, at present, it 

should not give a heavy weight to this factor in its consideration of the economic justification of 

new or amended standards. DOE is continuing to investigate the extent to which electricity price 

changes projected to result from standards represent a net gain to society.

2.15 EMISSIONS ANALYSIS

In the emissions analysis, DOE estimates the reduction in power sector emissions of 

carbon dioxide (CO2), nitrogen oxides (NOx), and mercury (Hg) using the NEMS-BT computer 

model. In the emissions analysis, NEMS-BT is run similarly to the AEO NEMS, except that 

furnace fan energy use is reduced by the amount of energy saved (by fuel type) due to each 

considered standard level. The inputs of national energy savings come from the NIA spreadsheet 

model, while the output is the forecasted physical emissions. The net benefit of each considered 

 

that are variations on EIA assumptions, DOE refers to the model by the name NEMS-BT. (“BT” refers to DOE’s 

Building Technologies Program, under whose aegis this work is performed.)
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standard level is the difference between the forecasted emissions estimated by NEMS-BT at that 

level and the AEO Reference Case. 

2.15.1 Carbon Dioxide

In the absence of any Federal emissions control regulation of power plant emissions of 

CO2, a DOE standard is likely to result in reductions of these emissions. The CO2 emission 

reductions likely to result from a standard will be estimated using NEMS-BT and national energy 

savings estimates drawn from the NIA spreadsheet model. The net benefit of the standard is the 

difference between emissions estimated by NEMS-BT at each standard level considered and the 

AEO Reference Case. NEMS-BT tracks CO2 emissions using a detailed module that provides 

results with broad coverage of all sectors and inclusion of interactive effects.

2.15.2 Sulfur Dioxide

Sulfur dioxide (SO2) emissions from affected electric generating units (EGUs) are subject 

to nationwide and regional emissions cap-and-trade programs, and DOE has preliminarily 

determined that these programs create uncertainty about the potential standards’ impact on SO2

emissions. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for affected EGUs 

in the 48 contiguous States and the District of Columbia (D.C.). SO2 emissions from 28 eastern 

States and D.C. are also limited under the Clean Air Interstate Rule (CAIR, 70 Fed. Reg. 25162 

(May 12, 2005)), which created an allowance-based trading program. Although CAIR has been 

remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. 

Circuit), see North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008), it remained in effect 

temporarily, consistent with the D.C. Circuit’s earlier opinion in North Carolina v. EPA, 531 

F.3d 896 (D.C. Cir. 2008). On July 6, 2011 EPA issued a replacement for CAIR, the Cross-State 

Air Pollution Rule. 76 FR 48208 (August 8, 2011). (See http://www.epa.gov/crossstaterule/). On 

December 30, 2011, however, the D.C. Circuit stayed the new rules while a panel of judges 

reviews them and told EPA to continue enforcing CAIR (see EME Homer City Generation v. 

EPA, No. 11-1302, Order at *2 (D.C. Cir. Dec. 30, 2011)).

The attainment of emissions caps is typically flexible among EGUs and is enforced 

through the use of emissions allowances and tradable permits. Under existing EPA regulations, 

any excess SO2 emissions allowances resulting from the lower electricity demand caused by the 

adoption of an energy conservation standard could be used to permit offsetting increases in SO2

emissions by any regulated EGU. However, if the standard resulted in a permanent increase in 

the quantity of unused emissions allowances, there would be an overall reduction in SO2

emissions from the standards. While there remains some uncertainty about the ultimate effects of 

energy conservation standards on SO2 emissions covered by the existing cap-and-trade system, 

the NEMS-BT modeling system that DOE uses to forecast emissions reductions currently 

indicates that no physical reductions in power sector emissions would occur for SO2. DOE 

acknowledges, however, that even though there is a cap on SO2 emissions and uncertainty 

whether efficiency standards would reduce SO2 emissions, it is possible that standards could 

reduce the compliance cost by reducing demand for SO2 allowances.
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2.15.3 Nitrogen Oxides

Under CAIR, there is a cap on NOX emissions in 28 eastern States and the District of 

Columbia. All these States and D.C. have elected to reduce their NOX emissions by participating 

in cap-and-trade programs for EGUs. Therefore, energy conservation standards may have little or 

no physical effect on these emissions in the 28 eastern States and D.C. for the same reasons that 

they may have little or no physical effect on SO2 emissions. However, standards would be 

expected to reduce NOX emissions in the 22 States not affected by CAIR. DOE is using the 

NEMS-BT to estimate NOX emissions reductions from possible standards in the States where 

emissions are not capped.

2.15.4 Mercury

In the absence of caps, a DOE energy conservation standard could reduce Hg emissions,

and DOE plans to use NEMS-BT to estimate these emission reductions. On February 16, 2012,

EPA published national emissions standards for hazardous air pollutants (NESHAPs) for 

mercury and certain other pollutants emitted from coal and oil-fired EGUs. 77 FR 9304 (Feb. 16, 

2012). The NESHAPs do not include a trading program and, as such, DOE’s energy 

conservation standards would likely reduce Hg emissions. For the emissions analysis for this 

rulemaking, DOE plans to estimate mercury emissions reductions using NEMS-BT based on 

AEO2011, which does not incorporate the NESHAPs. DOE expects that future versions of the 

NEMS-BT model will reflect the implementation of the NESHAPs.

2.15.5 Particulate Matter

DOE acknowledges that particulate matter (PM) exposure can impact human health. 

Power plant emissions can have either direct or indirect impacts on PM. A portion of the 

pollutants emitted by a power plant is in the form of particulates as they leave the smoke stack. 

These are direct, or primary, PM emissions. However, the great majority of PM emissions 

associated with power plants are in the form of secondary sulfates, which are produced at a 

significant distance from power plants by complex atmospheric chemical reactions that often 

involve the gaseous (non-particulate) emissions of power plants, mainly SO2 and NOx. The 

quantity of the secondary sulfates produced is determined by a very complex set of factors 

including the atmospheric quantities of SO2 and NOx and other atmospheric constituents and 

conditions. Because these highly complex chemical reactions produce PM composed of different 

constituents from different sources, EPA does not distinguish direct PM emissions from power 

plants from the secondary sulfate particulates in its ambient air quality requirements, PM 

monitoring of ambient air quality, or PM emissions inventories. For these reasons, it is not 

currently possible to determine how the amended standard impacts either direct or indirect PM 

emissions. Therefore, DOE is not planning to assess the impact of these standards on PM 

emissions. Further, as described previously, it is uncertain whether efficiency standards will 

result in a net decrease in power plant emissions of SO2, which are now largely regulated by capand-trade systems.
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2.16 MONETIZATION OF EMISSIONS REDUCTION BENEFITS

DOE plans to estimate the monetary benefits likely to result from the reduced emissions 

of CO2 and NOX that are expected to result from each of the standard levels considered. 

In order to estimate the monetary value of benefits resulting from reduced emissions of 

CO2 emissions, DOE uses the most current Social Cost of Carbon (SCC) values developed or 

agreed to by interagency reviews. The SCC is intended to be a monetary measure of the 

incremental damage resulting from greenhouse gas (GHG) emissions, including, but not limited 

to, net agricultural productivity loss, human health effects, property damage from sea level rise, 

and changes in ecosystem services. Any effort to quantify and to monetize the harms associated 

with climate change will raise serious questions of science, economics, and ethics. But with full 

regard for the limits of both quantification and monetization, the SCC can be used to provide 

estimates of the social benefits of reductions in GHG emissions. 

At the time of this analysis, the most recent interagency estimates of the potential global 

benefits resulting from reduced CO2 emissions in 2010, expressed in 2010$, were $4.9, $22.3, 

$36.5, and $67.6 per metric ton avoided. For emission reductions that occur in later years, these 

values grow in real terms over time. Additionally, the interagency group determined that a range 

of values from 7 percent to 23 percent should be used to adjust the global SCC to calculate 

domestic effects, although DOE will give preference to consideration of the global benefits of 

reducing CO2 emissions. To calculate a present value of the stream of monetary values, DOE 

will discount the values in each of the four cases using the discount rates that had been used to 

obtain the SCC values in each case.

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also will estimate the potential monetary benefit of reduced NOX emissions 

resulting from the standard levels it considers. Available estimates suggest a very wide range of 

monetary values for NOX emissions, ranging from $370 per ton to $3,800 per ton of NOX from 

stationary sources, measured in 2001$ (equivalent to a range of $450 to $4,623 per ton in 

2010$).26 In accordance with U.S. Office of Management and Budget (OMB) guidance, DOE 

will conduct two calculations of the monetary benefits derived using each of the economic values 

used for NOx, one using a real discount rate of 3 percent and another using a real discount rate of 

7 percent.27

DOE does not plan to monetize estimates of Hg reduction in this rulemaking. DOE is 

aware of multiple agency efforts to determine the appropriate range of values used in evaluating 

 

26 For additional information, refer to U.S. Office of Management and Budget, Office of Information and Regulatory 

Affairs, 2006 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on 

State, Local, and Tribal Entities (Available at: 

http://www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2006_cb/2006_cb_final_report.pdf ). 27 OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
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the potential economic benefits of reduced Hg emissions. DOE has decided to await further 

guidance regarding consistent valuation and reporting of Hg emissions before it once again 

monetizes Hg in its rulemakings.

Adjuvant supported the monetization of carbon emissions and stated that the range of 

values is reasonable. (Adjuvant, No. 9 at p. 11) Ingersoll Rand stated that the ranges of 

monetary values on CO2 and NOx are so wide as to be of little utility in selecting appropriate 

values for use in an analysis representing the situation in the United States over the time span 

that the analysis should cover. (Ingersoll Rand, No. 25 at p. 5) DOE acknowledges that the 

market value of future CO2 emissions reductions is uncertain, and for this reason it uses a wide 

range of potential values, as described above.

2.17 REGULATORY IMPACT ANALYSIS

In the NOPR stage, DOE will prepare a regulatory impact analysis (RIA) pursuant to 

Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993). The 

RIA evaluates potential non-regulatory policy alternatives, comparing the costs and benefits of 

each to those of the proposed standards. The RIA is subject to review under the Executive Order 

by the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and 

Budget. 

DOE recognizes that non-regulatory policy alternatives can substantially affect energy 

efficiency or reduce energy consumption. DOE will base its assessment on the actual impacts of 

any such initiatives to date, but also will consider information presented by interested parties 

regarding the potential future impacts of current initiatives.