Are Gas Furnaces Being Phased Out?

January 18, 2024
Furnace Services in South Charleston, WV

There’s a lot of discussion about what’s happening with fossil-fueled appliances, like gas furnaces. With all of this discussion, it’s easy to get confused about proposed and passed regulations and what you’ll have available in the future. Discover whether gas furnaces are being completely phased out, and the financial incentives available right now to help you convert to different forms of electric heating.

California: Phasing Out by the End of the Decade

The one state in the US that has made progress toward phasing out gas furnaces is California. Their plan is that by 2030, all new heaters sold will be zero-emission units, which means they aren’t burning gas. Homeowners won’t have to proactively replace gas-burning furnaces by this date, but will no longer have the option to replace them with a similar unit.

The drive behind this push is to reduce gas emissions. However, the benefit for homeowners is that newer technology systems offer better cost-efficiency in many climates. You’ll enjoy lower heating and cooling costs along with simplified maintenance. There is no regulated requirement for converting a gas furnace in West Virginia. However, there are several federal financial incentives if you choose to do so, both in the form of rebates and tax incentives.

Understanding Efficiency Improvements

When considering the options for updating your heating system, it’s critical to first understand the differences in evaluating heating efficiency. The HVAC industry uses two different standards for measuring heating efficiency. Furnaces use AFUE or Annualized Fuel Utilization Efficiency. This compares the amount of heat generated to the amount of heat lost in the exhaust. The highest-efficiency gas furnaces currently have an AFUE of just over 98%, losing less than 2% of the heat with exhaust.

Heat pumps, including geothermal heat pumps, use HSPF to measure efficiency, which stands for Heating Seasonal Performance Factor. This compares the total heat output for the season to the total energy consumed.

When talking about how the government looks at heating technology, they consider two factors. The first is gas emissions produced by the heating appliance. The second is the total energy consumed to heat your home. The financial incentives available aim to reduce both of these factors, protecting both the environment and lowering the costs for consumers.

Federal Rebates to Move Away From Gas

The Inflation Reduction Act of 2022 both created new and extended some existing rebate programs. Rebates offer the purchaser cash back on their system. There are currently three Federal rebate programs, the HOMES Rebate, the High-Efficiency Home Rebate, and the High-Efficiency Electric Home Rebate.

HOMES Rebate Program

The Home Efficiency Rebate, also known as the HOMES rebate, is designed to help low- and moderate-income households. There are two factors that will determine how much you’ll qualify for your rebate. The first is that you must have a projected energy savings of at least 20%, with over 35% receiving the most benefit.

The second is your household’s income, with a maximum benefit of 50% of project costs for households with incomes greater than 80% of the area’s median income. For households with income lower than 80% of the area’s median income, the maximum benefit increases to 80% of the projected costs.

High-Efficiency Electric Home Rebate Act of 2023

This rebate requires a household income of less than 150% of the area’s median income. If your household’s income is between 80% and 150%, you may qualify for a maximum of 50% and for households with an income less than 80%, you may qualify for a full 100% rebate, up to $8,000.

Tax Credits That Encourage Converting

Aside from rebates, there are also several tax credit programs available to help offset the costs of these high-efficiency systems. While tax credits don’t offer cash back on your installation, they do help reduce your year-end tax liability.

Nonbusiness Energy Property Credit

This tax credit gives the homeowner a nonrefundable credit of 30% of heat pump installation costs, up to $2,000. The nonrefundable credit means it will reduce your tax liability, but won’t contribute toward a tax refund.

Residential Energy Efficient Property

All homeowners qualify for this tax credit for energy efficiency upgrades made to their primary residence. Geothermal heat pumps will qualify for a 30% tax credit up to $2,000, which can include installation costs. This is also a nonrefundable tax credit.

Since 1950, people around South Charleston have trusted Mullen Plumbing, Heating and Cooling for trusted home services. Our team provides AC and heating installation, maintenance and repair—along with a full range of residential plumbing services and indoor air quality solutions. Call to schedule a consultation with one of our expert technicians to explore converting to a high-efficiency heat pump.

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