The D.C. Circuit Court of Appeals issued a decision on November 4 upholding the Department of Energy’s (DOE’s) 95% efficiency rule for residential gas furnaces and related standards for commercial water heaters.
The ruling is a setback for efforts to overturn the rule. In May 2024, the Senate passed S.J.Res.58, a Congressional Review Act Resolution that would have blocked DOE’s mandate, but the resolution stalled in the House. The court’s decision means that manufacturers will likely stop producing non-condensing furnaces and certain commercial water heaters in the coming years, unless the decision is successfully appealed or the rule is changed.
What the court decision means
The court upheld the DOE rule requiring all new residential furnaces to achieve at least 95% AFUE (Annual Fuel Utilization Efficiency), effectively ending production of all non-condensing furnace models. The rules apply based on manufacturing dates, with no sell-through limitations or installation deadlines:
- Residential furnaces: Must achieve 95% AFUE or higher if manufactured after December 18, 2028
- Commercial storage tank gas water heaters: Must achieve 95% thermal efficiency if manufactured after October 6, 2026
- Commercial instantaneous gas water heaters: Must achieve 96% thermal efficiency if manufactured after October 6, 2026
Why this matters for contractors and their customers
Reversing the effective ban on non-condensing furnaces is a top policy priority for ACCA in 2025-26 as part of our broader commitment to protecting fuel and technology choice.
The rule threatens affordability for homeowners and businesses. Limiting consumer choice in this way may make necessary efficiency upgrades, such as dual-fuel heat pumps, unaffordable for many. Retrofitting older homes and businesses to accommodate condensing furnaces often requires costly structural modifications and can create safety concerns, such as inadequate ventilation and ice on public walkways.
Take action
ACCA urges Congress and the Trump Administration to explore all possible avenues to prevent this ban from taking effect. Join ACCA in this fight by letting your members of Congress know why they should support efforts to address this rule
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