Washington, DC—Consumer, energy efficiency, environmental, and utility stakeholders welcomed a significantly strengthened federal efficiency standard for home furnaces Friday.

The final standards announced by the Department of Energy (DOE) will reduce average household costs by $350 over the life of a furnace compared to using old-style models and cut 332 million metric tons of carbon dioxide emissions from furnaces sold over 30 years, according to the agency. The standards will also reduce emissions of nitrogen oxides, which cause asthma attacks, cardiovascular disease, and even premature death.

Furnace efficiency standards had not been meaningfully updated since they were set by Congress in 1987. DOE made a slight update in 2007, but to an efficiency level that 99% of models already met.

Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said: “Heating is the largest utility cost in most homes, but we’ve still been installing many inefficient new models. Now, that’s finally going to come to an end. It’s a major accomplishment for the Energy Department and one that’s going to make a real difference reducing bills and greenhouse gases.”

Andrew deLaski, executive director of the Appliance Standards Awareness Project, said: “This has been decades in the making. Furnace technology advanced a long time ago, but the standards didn’t keep up. Until now. This is going to guarantee that all new models use proven energy-saving technologies. We won’t keep wasting so much heat for decades more.”

Richard Eckman, energy advocate with Consumer Federation of America, said: “Although the harm done to consumers through years of inaction and stonewalling by some gas utilities on this standard cannot be undone, by adopting a higher standard, future harm will be prevented. Thankfully, the Department’s final standards announced today will save financially strapped Americans money, provide cleaner air to breathe, and reduce greenhouse gas emissions in order to meet our climate commitments.”

Johanna Neumann, senior director at Environment America, said: “Using energy efficiently protects our air, water, and open spaces. The Department of Energy is protecting our environment from needless pollution by making sure new furnaces aren’t sold with outdated, inefficient technology.”

Charlie Harak, senior attorney with the National Consumer Law Center, said: “This is an extremely important rule for the millions of low-income households where a gas-fired furnace provides the heat.  Low-income households are disproportionately renters, where the landlord chooses which heating equipment to install. This rule ensures that the landlord will have to purchase efficient furnaces that will significantly lower bills for low-income tenants. Low-income homeowners who have to buy a furnace will benefit as well from much lower energy bills.”

Helen Burt, Chief Customer Officer at National Grid, said: “Energy efficiency is one of the most powerful tools we can offer our customers to reduce energy costs. National Grid supports the use of federal appliance standards like the rule announced today by DOE to provide equitable access to cost-effective energy efficiency gains. This standard helps ensure that the benefits of these gains reach all customer segments, including renters, who often do not make decisions about the appliances in their homes.”

Joe Vukovich, staff attorney at NRDC, said: “Thanks to this standard, consumers can be confident that when they go to purchase a new furnace they are getting the most efficient technology—one that will save a household $350 over the life of the furnace. All of that signals a win for pocketbooks and for the climate, as efficient furnaces help significantly cut climate-warming carbon emissions. And due to the rebates and tax credits in the Inflation Reduction Act, it’s never been a better time to upgrade home appliances to more climate-friendly versions.”

Heating is the largest energy use for most homes. Nearly half of U.S. homes—about 50 million—are heated with a gas or propane furnace.

The updated standards will require new furnaces to use about 15% less energy than today’s least efficient models, effectively phasing out non-condensing models. DOE estimates that the vast majority of consumers who would have purchased a non-condensing furnace before the standard will instead purchase a condensing furnace. Condensing models, which today make up about half of new furnace purchases, use more of the heat from the furnace’s combustion chamber, reducing energy waste.

Federal law requires DOE to periodically review standards for furnaces and other products; under a court-approved settlement in 2014, DOE was required to finalize a new furnace standard by 2016. Thus, this rule is long overdue.

The new standards will take effect in 2028.