E

C

/R Incorporated Providing Environmental Technical Support Since 1989

MEMORANDUM

DATE: February 21, 2013

SUBJECT: Unit Cost Estimates of Residential Wood Heating Appliances

FROM: Jill Mozier, EC/R Inc.

Beth Friedman, EC/R Inc.

TO: Gil Wood, EPA/OAQPS

David Cole, EPA/OAQPS

The purpose of this memorandum is to present an estimate of the unit costs of residential wood heating 

appliances under both the proposed NSPS (“Proposal”) and an alternative approach being considered 

(“Alternative”). We will present the major variables and assumptions underlying the analysis. Major variables 

include the estimated number of units shipped per year, the costs to develop new models, baseline costs of 

models, and the schedule for implementing the revised New Source Performance Standards (NSPS) under both 

the Proposal and Alternative. Note that the majority of cost and shipment data used in this analysis was 

provided by industry sources. 

I. Estimated Annual Shipped Units 

We used data in the Frost & Sullivan Market (F&S) report1on 2008 shipments by product category, and 

F&S revenue forecasts which incorporated the weak economy in years 2009 and 2010, to calculate the reduced 

number of shipments in years 2009 and 2010. Forced air furnaces were outside the scope of the F&S report. 

Instead, we used manufacturer estimates of total industry sales in 20082and applied the F&S market factors to 

estimate shipments through 2010. The F&S wood stove numbers included both certified and non-certified 

(single burn rate) stoves, so we have estimated numbers of non-certified stove shipments included in the total 

reported wood stove category (i.e., 40,000 units shipped in 2008).2 These shipments were then deleted from the 

adjusted total wood stove category shipments. We expanded the 2008 single burn rate estimate using the F&S 

factors. For years 2011 through 2038 (for the Proposal) and 2011 through 2041 (for the Alternative) estimated 

shipments are based on a forecasted revenue growth rate of 2.0%, in keeping with the average annual growth in 

real GDP predicted by the US Bureau of Economic Analysis.3 There is not a perfect correlation between 

shipments and revenue (for example, because of their higher unit cost, pellet stoves generate more absolute 

revenue than wood stoves), but we think the overall trend in the projection is reasonable in the absence of 

specific shipment projections. See Table 1, below for a truncated summary of the shipment data through 2023 

for all appliances except masonry heaters (i.e., for proposed Subparts AAA and QQQQ).

 

1 Market Research and Report on North American Residential Wood Heaters, Fireplaces, and Hearth Heating Products Market. 

Prepared by Frost & Sullivan. April 26, 2010. P. 27 -32.

2 NSPS Review and Comments. Confidential Business Information submitted by manufacturer. September 2010.

3

2013 Global Outlook projections prepared by the Conference Board in November 2012; http://www.conferenceboard.org/data/globaloutlook.cfm
2

Masonry heaters manufacturing cost impacts vary by the type of producer and the type of certification 

method. According to one manufacturer4, the masonry heater industry in the U.S. is dominated by the Finnish 

firm Tulikivi, which manufactures and imports about half of the U.S. masonry heater units installed yearly

through its network of installing distributors. The same manufacturer said that the second largest producer is a 

Canadian firm, Temp-Cast. The remainder of the industry is “dozens” of small producers, with probably fewer 

than 100 (or at least fewer than 200) generating any masonry revenue at all. Some commercial operations sell 

core units and/or design kits based on their own design, and other sell units they license from other U.S. or 

foreign companies. Finally, some units are custom built. Based on this information, we assumed that 50 

percent of masonry heaters sold per year in the U.S. are Tulikivi models and 35 percent are sold by other 

manufacturers. The remaining 15 percent of units are sold by independent contractors. 

Using the assumptions described above, we subcategorized the masonry heater segment into three 

groups: 50 percent of stoves are sold by the largest manufacturer, Tulikivi, 35 percent of stoves are sold by

other large manufacturers, and 15 percent of stoves are custom built models sold by small manufacturers. See 

Table 2, below for a truncated summary of the masonry heater shipment data through 2023 (i.e, for proposed 

Subpart RRRR).

 

4 Comments: Residential Solid Fuel Burning Appliance SBREFA Process. Product Category: Masonry Heaters. July 13, 2010. 

Timothy Seaton, Timely Construction, Inc. p. 5.
3

Table 1. Estimated Annual Shipped Units – Subparts AAA & QQQQ

Table 2. Estimated Annual Shipped Units – Subpart RRRR, Masonry Heater

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Masonry Heaters 

Total 730 466 448 457 466 475 485 494 504 514 525 535 546 557 568 579

Tuilikivi 365 233 224 228 233 238 242 247 252 257 262 268 273 278 284 290

Other Manufacturers 256 163 157 160 163 166 170 173 177 180 184 187 191 195 199 203

Custom built 110 70 67 69 70 71 73 74 76 77 79 80 82 84 85 87
4

II. Cost Model Variables

A. Model Development Costs

We have heard various estimates of the costs to bring a wood heater from concept to completion, from 

$300,000 for a single model to $1,360,000 for a 4-firebox model line. A Hearth and Home article estimated the 

total cost to bring a model from conception to market as $645,000 to $750,000 for steel stoves and over $1 

million for cast-iron, enameled wood stoves. The authors indicated that costs would decrease for separate 

models in the same line by up to 25%. Based on this information, we estimate that a 4-model steel line would 

cost up to $328,125 per model to develop. These costs include marketing, design, developing first generation, 

second generation and prototype units; NSPS and safety testing, equipment tooling, etc. The manufacturer 

supplying these figures for the article estimated that the NSPS and safety testing component of these costs 

would constitute $40,000 per model.5 

Two other manufacturers also provided estimated development costs for a 4-box model line, which are 

summarized in Table 3.6

Another manufacturer estimated costs of new product development, including design, prototype 

development, testing, tooling equipment and other manufacturing changes, marketing support, materials, 

training, and education to be in excess of $300,000 over an 8- to 12-month schedule for a relatively 

uncomplicated product. Costs will increase for products that have more sophisticated controls.7 One other 

manufacturer estimated that their typical model development costs are around $200,000/model.8

Based on this information, we estimated average costs to develop a new model line, including testing 

with both crib and cord wood, of $356,250 for certified wood stoves and pellet stoves, as outlined in Table 3. 

We also assumed $356,250 for single burn rate stoves, which may be somewhat high if they are as clean as the 

manufacturers claim. We likewise assumed a development cost of $356,250 for forced air furnaces and 

hydronic heaters. 

According to information provided by one masonry heater manufacturer9, R&D costs for a masonry

heater may be estimated at $250,000. For our cost analysis, we assumed R&D costs were the same as for other 

wood heater appliances ($356,250). For facilities conducting R&D, these costs include the costs for 

certification testing. We estimate that the cost of testing a heater design in an EPA accredited lab to be 

approximately $10,000 for masonry heaters.10 

 

5

James E. Houck and Paul Tiegs. There’s a Freight Train Comin’. Hearth and Home. December 2009.

6 NSPS Review/Revision, and Impact on Our Companies: A Manufacturer’s Position Statement. Prepared by Stove Builder 

International and United States Stove Company. June 2010.

7 Comments from United States Stove Company, Small Entity Representative. July 13, 2010.

8 Confidential Business Information.

9 Comments: Residential Solid Fuel Burning Appliance SBREFA Process. Product Category: Masonry Heaters. July 13, 2010. 

Timothy Seaton, Timely Construction, Inc. p. 14.

10 Letter to Lucinda Power, EPA, from Brian Klipfel, Fire Works Masonry. September 10, 2010.
5

Table 3. Example of Manufacturers’ Estimates of Costs to Develop Model Line (4 Fireboxes)

Cost 

Component

Estimated 

Costs Notes

Salaries $850,000 Using 2-full time experienced employees to bring the products to 

market, salaries and benefits are estimated at $160,000 per year for at 

least 5.3 years. Tasks include design, prototyping, testing, 

production-line integration, and marketing.

Laboratory

Equipment

$50,000 In order to accelerate R&D and avoid validating each result with 

independent testing labs (too costly for most manufacturers), new 

testing equipment will need to be purchased in order to sample flue 

gases, measure test load weight loss, record data automatically, and 

analyze flue gas composition.

Prototypes $25,000 Numerous prototypes will be needed until the final product can be 

approved. For each firebox, an estimated 8 prototypes will be needed, 

at a cost of $700 each. Numerous samples of various components will 

also have to be purchased from vendors. 

Test Fuel* $45,000* Each test costs at least $50 in fuel (assuming cribs are used), 

including waste. And estimated 150 tests will have to be conducted 

for each firebox for a total of $7,500, or $30,000 for a 4-firebox 

model line based on crib testing.* 

Testing 

Services*

$150,000* Testing services for emissions, efficiency, and safety are estimated to 

last approximately 3 weeks for each firebox. At an average of $1,500 

per day plus travel expenses, this amounts to approximately $25,000 

for each firebox, or $100,000 for a 4-firebox model line based on crib 

testing.*

Outside 

Consultants

$160,000 The average manufacturer will need outside help for design and 

testing. Testing equipment, knowledge of the test standard, and 

general guidance is normally offered by outside consultants (not 

necessarily certified EPA test labs). The average manufacturer will 

need approximately 300 hours of consulting services per year 

($40,000) for 4 years.

Re-tooling $120,000 For each firebox, new molds and jigs will need to be purchased or 

produced. Re-tooling charges will reach an estimated $30,000 per 

firebox, or $120,000 for a 4-firebox model line.

Marketing $25,000 New pictures will need to be taken and all the current marketing 

material, including web sites and owner’s manuals, will have to be 

updated. 

Total $1,425,000 Equal to $356,250/model

*Note: The costs originally provided by industry for this table were presumed to be based on crib wood testing, not 

both crib wood and cord wood testing. Therefore we increased the industry-based “Test Fuel” cost by 50% (to the 

$45,000 shown above) as well as the industry-based “Testing Services” cost by 50% (to the $150,000 shown above) 

in order to estimate the additional cost to test with both crib wood and cord wood.
6

The masonry heater cost analysis also makes use of a unique software package based on a European 

masonry heater design standard. This standard has been verified in the laboratory and under field conditions to 

produce masonry heaters that would meet the proposed NSPS emission limits. The software produces for 

printout a certification for a given design application and the design definition documents, as well as operating 

instructions customized to the given design. Thus the software verification and certification record is created 

for and attached to the design, and the resulting documents can be submitted as part of the certification 

application. The cost of this software to the user is approximately 1,000 Euros (approximately $1,500) for the 

package with a 300 Euro (approximately $450) annual fee that commences in the second year following 

purchase.

11

 

We assumed that the large manufacturers will use the 6-year period starting at proposal of the draft 

standards, i.e., 2013 to 2018, to recover the costs of R&D. The emission testing and software certification costs 

will be incurred on a real-time basis, as they occur. We also assume that the small manufacturers will purchase 

the software package in the year the final rule is promulgated (2014) and continue to renew their license in the 

following years, in anticipation of the 2019 small manufacturer compliance date.

B. Number of Models

We need to reconcile the data on shipments of individual units with the certification costs associated 

with model lines. Therefore, we estimated the average number of models produced by manufacturers of each 

product type. For certified wood stoves and fireplace inserts, we used information provided by the Hearth, 

Patio and Barbecue Association (HPBA) that currently 125 models are being produced on EPA’s list of certified 

stoves.12 Because pellet stoves are produced at levels comparable to wood stoves, we estimated that there are 

up to 125 models being currently produced. 

The single burn rate estimate of 20 different models is based on an internet search of major 

manufacturers (United States Stove and Vogelzang). The actual estimate could be higher if there are a large 

number of importers of foreign produced units. However, a search of the Northern Tool and Equipment, 

Tractor Supply Company, Lowes, Home Depot and Walmart Websites did not identify any other major 

producers of single burn rate stoves that are sold in the U.S.

The HPBA provided a list of manufacturers by product type.13 Using this as a starting point, we 

conducted additional internet searches to quantify the numbers of models offered by manufacturer. We further 

refined the estimate of hydronic heater models based on EPA’s experience with the voluntary program. We 

understand that a number of manufacturers list products on their website that are no longer manufactured, only 

sold in limited quantities, and/or are sold under license to another manufacturer. Furthermore, one 

manufacturer dominates industry sales, so on a sales-weighted basis there are fewer numbers of models 

produced than a strict interpretation of web sites would indicate. Based on this process, we estimate the 

following number of models by product type:

 Forced air furnaces – 50

 Hydronic heating systems (outdoor and indoor) – 120 

For masonry heaters, there are three scenarios for potential cost impacts. In the case of Tulikivi and 

some U.S. firms, e.g., Timely Construction, these companies have already invested in R&D in order to gain 

access to U.S. markets which restrict sales (e.g., Colorado) of uncertified units. These companies will face 

 

11 E-mail from Timothy Seaton, Timely Construction Company, to Gil Wood, USEPA. April 21, 2011.

12 Letter to Lucinda Power, EPA, from John Crouch, HPBA. September 12, 2010. pp. 10 – 11.

13 HBPA Solid Fuel Product List. Attachment to E-mail from John Crouch, HPBA, to Gil Wood, EPA. September 24, 2010.
7

testing costs only, with an assumed total of nine tests conducted (i.e., a total of nine models certified through 

testing). We assume that these costs will be spread out over 50 percent of the Tulikivi models and 50 percent of 

the “other manufacturer” models. For purposes of our cost analysis, we also assumed that two additional 

companies will conduct R&D to develop two new models each to meet the proposed NSPS. These costs will be 

spread over 50 percent of the “other manufacturer” models. Finally, we have been told that Tulikivi will use a 

software certification approach to certify up to eight additional models, which will be spread out over the 

remaining 50 percent of Tulikivi models. 

We also project that the remaining 15 percent of custom built units will use the software certification 

approach to demonstrate they comply with the proposed NSPS. Our estimate of the number of custom built 

models is based on the average number of models sold per year in the 15 percent model category (i.e., 85 per 

year). We assumed each custom manufacturer would sell 2 models per year, for a total of 42 manufacturers 

participating in the software certification option.

C. Model Design Lifespan

We assume a 20-year model design lifespan as well as a 20-year use/emitting appliance lifespan. These 

assumptions were made to best characterize the actual model design and use lifespans given that many models 

developed for the 1988 NSPS are still being sold (after 25 years), many “new” models still have the same 

internal working parts with merely exterior cosmetic changes, and most stoves in consumer homes emit for at 

least 20 years and often much longer. Therefore our analysis tracks shipments and costs through year 2038 for 

the Proposal and through year 2041 for the Alternative (i.e., assuming a 20 year design life for a model meeting 

the standard in 2019 under the Proposal, and in 2022 under the Alternative approach, as described in more detail 

in Section IV).

D. Certification Testing

The costs of certification testing are included in the model development (R&D) costs. Models that 

already meet the specified limit will merely need to certify emissions and thus face certification costs only (e.g., 

pellet stoves facing the 2014 NSPS limit, described in Section IV). However, for purposes of unit cost increase, 

the majority of costs are faced by models that require new R&D and increased costs to manufacture, and these 

costs are modeled in this memorandum for all appliances that need to do more than merely certify to meet an 

NSPS year limit.

E. Additional Manufacturing Costs

We estimated the following additional manufacturing costs per unit based on appliance type:

 Certified wood stoves and pellet stoves represent a well-developed technology and we could not 

identify price differences between models with lower emission levels compared to models with 

higher emission levels. Therefore, we have assumed no additional manufacturing costs.

 One manufacturer estimated that it will cost an average of $100 more to manufacture a lower 

emitting single burn rate product (exclusive of recovering R&D cost).14

 We have limited information that indicates the cost to produce a forced-air furnace that complies 

with a Step 1 emission standard (see discussion below in section IV) is approximately 75% more, or 

$1,600 (exclusive of recovering R&D cost).15

 

14 NSPS Review and Comments. Confidential Business Information. September 2010.

15 Confidential Business Information.
8

 We have seen a range of estimates for additional costs to manufacture a hydronic heater capable of 

meeting the emission standards associated with the EPA voluntary program, with an average being 

approximately $3,000. We assume that the additional costs to manufacture an NSPS certified 

furnace will be comparable, i.e., $3,000 (exclusive of recovering R&D cost).

III. Unit Costs of Certified Wood Heaters

We used the average 2008 base year costs per appliance type, based on F&S16 where available, and 

converted these 2008 costs to 2010 dollars ($) to be consistent with the 2010 R&D costs estimated in Table 3. 

These costs represent the costs based on manufacturer’s price (NOT retail). For units not included in the F&S 

report (single burn rate stoves and forced air furnaces), we used manufacturer information.17, 18 Our next step 

was to develop the following incremental Cost Formula:

(Cost of R&D * Number of models) / (Number of shipments * model life of 20 years),

which equals the incremental cost of developing a new unit, spread over the number of units expected to be sold 

during the model life (assuming a flat growth rate of shipments for the purposes of estimating “Number of 

Shipments” in this formula). Where there are additional manufacturing costs as discussed above, we added 

these to the unit cost number. The total incremental cost was added to the base model cost to derive the postNSPS unit cost.

Table 4a is a summary of the final unit cost estimates under the Proposal, and Table 4b is a summary of 

the final unit cost estimates under the Alternative, as reflected by a draft NSPS phase-in schedule, described in 

section IV.

Table 5 is a summary of the masonry heater unit costs, by type of manufacturer and certification 

assumption. (For masonry heaters the Proposal and Alternative do not differ.) Because of the significantly

lower cost of emission testing and/or software certification, we did not incorporate a cost recovery period into 

the equation for these unit price estimates for large manufacturers (like Tulikivi) using software certification. 

We can see from the results that the overall low number of additional R&D masonry heater models, the 

relatively modest cost of the software certification option and the low number of models requiring additional 

testing result in incremental costs ranging from $88 to $840 for masonry heaters. The average cost increase per 

masonry heater unit is approximately $300.

 

16 Market Research and Report on North American Residential Wood Heaters, Fireplaces, and Hearth Heating Products Market. 

Prepared by Frost & Sullivan. April 26, 2010. p. 35.

17 Confidential Business Information.

18 Confidential Business Information.
9

Table 4a. Unit Costs of Wood Heaters meeting Proposed NSPS (2010$)

Table 4b. Unit Costs of Wood Heaters meeting Alternative Standards (2010$)

2008* 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Certified Wood

Stoves $859 $859 $859 $859 $859 $859 $859 $859 $859 $859 $859 $883 $883 $883 $883

Single Burn Rate

Stoves $253 $253 $253 $253 $253 $253 $366 $366 $366 $366 $366 $479 $479 $479 $479

Pellet Stoves $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,296 $1,296 $1,296 $1,296 $1,296 $1,319 $1,319 $1,319 $1,319

Forced Air

Furnaces $912 $912 $912 $912 $912 $912 $2,545 $2,545 $2,545 $2,545 $2,545 $4,174 $4,174 $4,174 $4,174

Hydronic Heating 

Systems $7,528 $7,528 $7,528 $7,528 $7,528 $7,528 $10,768 $10,768 $10,768 $10,768 $10,768 $13,986 $13,986 $13,986 $13,986

Proposal Step 1 (2014)

Proposal Step 2 (2019)

2008* 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Certified Wood 

Stoves $859 $859 $859 $859 $859 $859 $859 $859 $859 $884 $884 $884 $884 $884 $907

Single Burn Rate

Stoves $253 $253 $253 $253 $253 $253 $366 $366 $366 $479 $479 $479 $479 $479 $590

Pellet Stoves $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,296 $1,296 $1,296 $1,320 $1,320 $1,320 $1,320 $1,320 $1,342

Forced Air

Furnaces $912 $912 $912 $912 $912 $912 $2,545 $2,545 $2,545 $4,176 $4,176 $4,176 $4,176 $4,176 $5,803

Hydronic Heating 

Systems $7,528 $7,528 $7,528 $7,528 $7,528 $7,528 $10,768 $10,768 $10,768 $13,995 $13,995 $13,995 $13,995 $13,995 $17,200

Alternative Step 3 (2022)

Alternative Step 1 (2014)

Alternative Step 2 (2017)

*Note: The average 2008 base year cost per appliance was converted to 2010$ for this analysis. 2008 base year manufacturer price is provided in theMarket Research and Report on 

North American Residential Wood Heaters, Fireplaces, and Hearth Heating Products Market prepared by Frost & Sullivan. April 26, 2010, p. 35. for all appliances except single burn rate

stoves and forced air furnaces, for which average cost figures were obtained from industry estimates.
10

Table 5. Unit Costs of Masonry Heaters meeting Proposed NSPS or Alternative Standards (2010$)

2008* 2009 2010 2011 2012 2013 2014** 2015 2016 2017 2018 2019 2020 2021 2022

Masonry Heaters - 

large companies

R&D $9,157 $9,157 $9,157 $9,157 $9,157 $9,157 $9,997 $9,997 $9,997 $9,997 $9,997 $9,997 $9,997 $9,997 $9,997

Masonry Heaters - 

large companies

test $9,157 $9,157 $9,157 $9,157 $9,157 $9,157 $9,247 $9,247 $9,247 $9,247 $9,247 $9,247 $9,247 $9,247 $9,247

Masonry Heaters - 

large companies

computer design $9,157 $9,157 $9,157 $9,157 $9,157 $9,157 $9,256 $9,256 $9,256 $9,256 $9,256 $9,256 $9,256 $9,256 $9,256

Masonry Heaters - 

small companies

computer design $9,157 $9,157 $9,157 $9,157 $9,157 $9,157 $9,245 $9,245 $9,245 $9,245 $9,245 $9,245 $9,245 $9,245 $9,245

Proposal: Step 1 in 2014 for large manufacturers; Step 1 in 2019 for small manufacturers

Alternative (same as Proposal): Step 1 in 2014 for large manufacturers; Step 1 in 2019 for small manufacturers

*Note: The average 2008 base year cost per appliance was converted to 2010$ for this analysis. 2008 base year manufacturer price is provided in theMarket Research and 

Report on North American Residential Wood Heaters, Fireplaces, and Hearth Heating Products Market prepared by Frost & Sullivan. April 26, 2010, p. 35.

**Analysis assumes that small manufacturers will purchase certification software in 2014, even if they take longer (until 2019), as allowed, to achieve the standard.
11

IV. NSPS Options

We developed two primary options to evaluate the cost impacts of implementing new or 

revised NSPS standards for the residential wood heating appliance industry. The cost analyses 

assume specified phase-in schedules, which differ for the Proposal versus the Alternative. The 

Proposal represents a scenario where all types of appliances (except masonry heaters) would be 

required to meet a specified Step 1 emission limit upon promulgation in 2014 and then a stricter 

Step 2 emission limit five years later in 2019. Under this Proposal, large manufacturers of 

masonry heaters would also be required to meet a specified Step 1 emission limit upon 

promulgation in 2014, while small custom manufacturers would not be required to meet this Step 

1 emission limit until 2019. There is no Step 2 emission limit for masonry heaters being 

proposed. The Alternative approach represents a scenario where all types of appliances (except 

masonry heaters) would be required to meet a specified Step 1 emission limit upon promulgation 

in 2014 and then an interim Alternative Step 2 emission limit three years after promulgation in 

2017, followed by a stricter Alternative Step 3 emission limit eight years after promulgation in 

2022. Masonry heaters would be regulated the same way under this Alternative approach as 

under the Proposal, as explained above. Note that the Proposal Step 2 emission limit is the same 

as the Alternative Step 3 emission limit, but the compliance dates differ for this stricter limit (i.e., 

2019 versus 2022). Tables 4a, 4b, and 5 show the resulting unit cost impacts of implementing 

these options. These implementation periods represent a tentative schedule and are subject to 

change. 

It is important to note that the costs represented in the NSPS blocks are for a unit required 

to make changes to comply with the NSPS. In reality, not all units will require changes and the 

related R&D costs. 

Following is a summary of the NSPS implementation assumptions for each appliance 

type, grouped according to probable NSPS Subparts. This summary describes the specific 

emission limits under the Proposal and the Alternative approach. A discussion regarding the 

basis for these standards as well as how many existing models of each appliance type already 

meet the specified limits is provided in the “Estimated Emissions from Wood Heaters” memo.19

Subpart AAA (“room heaters”): 

 Adjustable burn rate, single burn rate, and pellet stoves: Proposal: Step 1 limit of 4.5 

g/hr upon promulgation in 2014; and Step 2 limit of 1.3 g/hr five years after 

promulgation in 2019. Alternative: Step 1 limit of 4.5 g/hr upon promulgation in 

2014; Step 2 limit of 2.5 g/hr three years after promulgation in 2017; and Step 3 limit 

of 1.3 g/hr eight years after promulgation in 2022.

Subpart QQQQ (“central heaters”):

 Hydronic heaters (both outdoor and indoor): Proposal: Step 1 limit of 0.32 lb/mm 

BTU heat output upon promulgation in 2014; and Step 2 limit of 0.06 lb/mm BTU 

heat output five years after promulgation in 2019. Alternative: Step 1 limit of 0.32 

 

19 Memo to Gil Wood, USEPA, from EC/R Inc. Estimated Emissions from Wood Heaters. February 15, 2013.
12

lb/mm BTU heat output upon promulgation in 2014; Step 2 limit of 0.15 lb/mm BTU 

heat output three years after promulgation in 2017; and Step 3 limit of 0.06 lb/mm 

BTU heat output eight years after promulgation in 2022.

 Forced Air Furnaces: Proposal: Step 1 limit of 0.93 lb/mm BTU heat output upon 

promulgation in 2014; and Step 2 limit of 0.06 lb/mm BTU heat output five years 

after promulgation in 2019. Alternative: Step 1 limit of 0.93 lb/mm BTU heat output 

upon promulgation in 2014; Step 2 limit of 0.15 lb/mm BTU heat output three years 

after promulgation in 2017; and Step 3 limit of 0.06 lb/mm BTU heat output eight 

years after promulgation in 2022.

Subpart RRRR including masonry heaters:

 Masonry Heaters: Proposal / Alternative (same): Step 1 limit of 0.32 lb/mm BTU 

heat output upon promulgation in 2014 for large manufacturers (defined as 

manufacturers constructing ≥ 15 masonry heaters per year), with a 5-year (2019) 

small volume manufacturer compliance extension (for companies constructing < 15 

units/year). No other phased-in limits are being proposed.

V. Other Cost Information

A. Installation Costs

Although we do not expect any changes in installation costs, they are relevant to the total 

cost of purchasing a residential wood heating device. Where possible we used information in the 

F&S report.20 The F& S report notes that installation cost only includes the installation of the 

appliance and does not include the cost of installing a new chimney, the cost of a blower system 

or the cost of additional accessories such as mantel and other stone exteriors. An average 

installation includes installing floor and wall protection, connecting pipes to the unit using the 

proper material and construction clearances, ensuring proper ventilation, and testing the unit to 

make sure it is operating properly. For single burn rate stoves, we assumed that installation costs 

would be equal to installation of certified wood stoves. For forced air furnaces, we assumed an 

installation cost of $2,500, based on manufacturer information.21

 Certified Wood Stoves: $500 

 Single Burn Rate Stoves: $500

 Pellets Stoves: $300 

 Forced Air Furnaces: $2,500

 Masonry Heaters: $6,000

 Hydronic Heating Systems (Indoor or Outdoor): $2,000

 

20 Market Research and Report on North American Residential Wood Heaters, Fireplaces, and Hearth Heating 

Products Market. Prepared by Frost & Sullivan. April 26, 2010. p. 34.

21 Confidential Business Information.
13

B. Price Markups

As described above, the unit costs presented are the manufacturer’s price, which is the 

price of one standard unit and does not include installation, shipping charges, or accessories. As 

noted in the F&S report, pricing at the manufacturer’s level is used to avoid the price fluctuations 

that occur once the unit enters the different distribution channels used in the market.22 Once 

again, however, we also have an interest in being able to estimate the cost of a unit to the 

consumer. We solicited information from manufacturers on average price markups. Most of this 

information is confidential and varies by product type and price point. However, the following 

information can be used as a rough guide:

Cost to Manufacture: 0.6 

Producer Cost: 1

Direct Retail markup: 2

Major Retailer markup (e.g., Lowest): 1.5 (volume markup)

We also looked at information in a related industry, residential gas furnaces and boilers, 

reviewed by the Department of Energy as it evaluated the impacts of implementing increased 

efficiency standards.23 Following is a summary of mark-ups determined by that study. The 

report concluded: 

The Department used the overall markup to estimate the customer price of baseline 

equipment, given the manufacturer cost of baseline equipment. Similarly, the 

Department used the overall incremental markup to estimate changes in the customer 

price, given changes in the manufacturer cost above the baseline price resulting from a 

standard to raise equipment efficiency. For example, if a standard increases the gas 

furnace manufacturer cost by $100, the Department multiplied this by the overall 

incremental markup of 2.05 to estimate that the customer price will increase $205.

 

22 Market Research and Report on North American Residential Wood Heaters, Fireplaces, and Hearth Heating 

Products Market. Prepared by Frost & Sullivan. April 26, 2010. p. 35.

23 Residential Furnaces and Boilers ANOPR Technical Support Document. Chapter 5: Markups for Equipment 

Price Determination. See: 

http://www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/furnaces_boilers/furnace_boiler

_ch05.pdf. p. 5-16.
14

Table 6. Summary of Markups on Residential Furnaces and Boilers23

Baseline Model 

Cost

Incremental 

Cost

Manufacturer 1.26 1.26

Wholesaler 1.36 1.11

Contractor 

(new/replacement) 1.41/1.62 1.22/1.33

Builder (new construction 

only) 1.43 1.33

Sales tax (replacements 

only) 1.07 1.07

Total markup (on manufacturing cost)

Non-weatherized gas 

furnace 3.12 2.07

Weatherized gas furnace 3.12 2.07

Oil-fired furnace 2.97 1.99

Hot-water gas boiler 2.97 1.99

Hot-water oil-fired boiler 2.97 1.99

Mobile home gas furnace 2.22 2.22