Economics of Residential Gas Furnaces and Water Heaters in United States New Construction Market

May 8, 2009 - 12:00pm

In the new single-family home construction market, the choice of what gas furnace and gas water heater combination to install is primarily driven by first cost considerations. In this study, the authors use a life-cycle cost analysis approach that accounts for uncertainty and variability of inputs to assess the economic benefits of installing different gas furnace and water heater combinations. Among other factors, it assesses the economic feasibility of eliminating the traditional metal vents and replacing them with vents made of plastic materials used in condensing and power vent systems. The study accounts for the equipment cost as well as for the cost of installing, maintaining, repairing and operating the equipment over its lifetime. This study suggests that homebuyers in most of the U.S. would benefit from the installation of high efficiency condensing furnaces and power vent or condensing water heaters. It also shows that important benefits may be overlooked when policy analysts consider the impact of individual equipment in isolation. The study's findings have the potential to influence the building codes and to assist policy makers regarding U.S. residential new construction space heating and water heating policies. For more information about this seminar, please contact: JoAnne Lambert 510.486.4835, or send e-mail to JMLambert[at]

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