In this report
Efficiency matters
Venting and repairs
Choosing a contractor
February 2008
send to a friend printable version
Efficiency matters
The more efficient a furnace, obviously, the lower your energy bill for heating. Calculating a furnace's energy costs requires considering both the gas it burns and the electricity it consumes to run its blowers and controls.

How efficiently a furnace converts gas into heating energy is reflected in its annual fuel-utilization-efficiency (AFUE) rating, which is measured as a percentage. The higher that percentage, the more heat the furnace can wring from each therm of gas—and the lower the environmental impact of its emissions.

Furnaces have generally become more energy-efficient over the years. A typical gas furnace made in the early 1970s has an AFUE of about 65 percent. Today, the lowest efficiency allowed by law for new gas furnaces is 78 percent, and the most efficient models have an AFUE of about 97 percent—or near-total efficiency.

The price of a furnace generally rises in step with its fuel efficiency. A furnace with a 90 percent AFUE can cost about $1,000 more than a similarly sized unit with an 80 percent AFUE. However, that additional cost can generally be recouped in lower fuel bills over the lifetime of the furnace. Just how quickly the investment is recovered, though, depends on more than the difference in AFUE between the two units; the electrical bills to run two furnaces with different AFUEs can differ significantly. Payback times will also be affected by the climate where you live, how well your home retains heat, and the rates you pay for gas and electricity.

To help you decide on a level of efficiency for your new furnace, insist that the contractor select models in a range of efficiencies. Have the contractor calculate the annual estimated operating cost of each model you're considering, rather than simply estimate it. He can complete these calculations by plugging information on the unit's AFUE and electrical consumption, on local utility rates, and on characteristics of your home into one of several computer programs designed to make such estimates. Make sure the installation quotes also consider the cost of any changes to venting required by any appliances in the home.

Weigh the operating costs of the various furnaces against their price and features. Since more-efficient furnaces generate fewer emissions, environmental considerations may also weigh in your decision.

Given that most furnaces with an AFUE over 90 percent are quite expensive, they're likely to be economic only in regions where winters are especially harsh—including most of the Northeast and Midwest. Also, given the reliability indications for such models, it's wise to ask the contractor some additional questions about one you may be considering: Is the model fairly new (say, two years or less) and thus relatively untested? If it's an older model, has the contractor noticed any reliability problems with it?


With the appliances that heat homes becoming steadily more efficient—gas furnaces especially—you might assume the total energy used to heat homes is also dropping. Instead, the energy used for space heating is actually growing. That, in turn, has helped increase emissions of carbon dioxide, the greenhouse gas produced when furnaces, space heaters, and power plants burn coal, oil, and natural gas.

The main culprit: Bigger homes. Relatively low energy costs, too, have reduced the financial incentive for choosing a more efficient furnace. Governments and utilities have also reduced or eliminated many of the rebates they once offered to homeowners who chose more-efficient heating systems. Fortunately, many of those agencies still provide information that educates consumers about steps to reduce energy use in their homes. One of the best sources is the Department of Energy (800 363-3732;, whose Web site provides interactive worksheets and links to other online information.

Here are some steps that can help you make your home more energy-efficient:

  • Turn down the temperature a little. Keeping your home two degrees cooler will reduce emissions by about 6 percent and save you money. You may not notice the difference, especially at night or when you're out of the house (a programmable thermostat can help).

  • Draw the curtains at night. A heavy curtain can block the chill from a cold window, so you won't need to raise your thermostat to feel comfortable. You may even find that you can maintain your comfort at a lower thermostat setting, thereby saving even more energy.

    If you live in a cold climate, choose windows without low-e coatings and little solar shading for south- and west-facing exposures. Keep the windows covered on sunny days during the summer but uncover them on sunny days during the winter to benefit from some free solar heating.

  • Reduce heat loss from ducts. The Department of Energy estimates that 20 percent to 40 percent of the heating energy that leaves the furnace of a typical heating system dissipates in its duct system. Limit those losses by sealing leaks and, where feasible, insulating ducts.