New regulations for furnaces are making them more energy efficient than ever. Furnaces are rated by annual fuel-utilization efficiency (AFUE). This is the minimum percentage of fuel that is consumed in the process of heating your home. The rest escapes through the flue. Gas furnaces made in the early 1970s may have AFUE ratings as low as 56 percent; modern furnaces have minimum ratings of 78 percent (for oil), and as high as 99 percent for gas. That means replacing an older furnace can make a significant dent in your fuel bill. Keep in mind that the AFUE rating does not factor in heat lost through ducts or pipes, which the Department of Energy says can account for as much as 35 percent of total heating energy.
Having said that, a high-efficiency furnace will cost less to operate each year than a standard furnace. At EnergySavers.gov there is a table for estimating how much you will save in energy costs each year by replacing your older furnace. For example, if you replace an old system with an AFUE of 60 percent with a new system with an 80 percent AFUE, you'll save approximately $25 for every $100 you used to spend on heating costs in a season. A 90 percent efficient furnace will save you $33.33 for every $100.
Whether the increased energy savings will recoup the extra up-front cost of the high-efficiency furnace depends on how much you currently spend to heat your house. This, in turn, will depend on such factors as the climate where you live, how well your home is insulated and your local utility rates.
However, experts generally say that if you live in an area with harsh winters, such as the Northeast or Midwest, a high-efficiency furnace will pay for itself over time. In areas with milder winters, an 80 percent AFUE furnace may be more cost effective. The figures provided by the EnergySavers.gov site are only estimates, so make sure to ask your contractor to calculate the expected annual operating costs of different furnaces.
Of course, lower energy bills are only one reason to install a more efficient furnace. Cutting your home's energy use will benefit the environment, as well. Replacing an old heating system that is 56 percent efficient with a new system that is 90 percent efficient will save 1.5 tons of carbon dioxide emissions each year if the house is heated with gas; 2.5 tons if it's heated with oil. For those who are concerned about climate change, this factor may make a high-efficiency furnace the right deal even if it is not the most cost-effective choice.
Many older furnaces are single-stage (or single-speed) heating systems. This means that they are either on or off, and when they are on they put out heat at a constant level. To keep the house at a constant temperature, a single-speed furnace must cycle on and off frequently. Newer furnaces, by contrast, are generally multistage or multispeed furnaces that can produce heat at two or more different rates. Multispeed furnaces are more energy efficient than single-stage furnaces because single stage furnaces must constantly turn on and off.
A true variable-speed furnace is even more efficient than a multispeed furnace. A variable-speed system pairs a variable-speed blower with a computer-controlled thermostat. These systems can run at several different levels, adjusting automatically to maintain a constant temperature. Because they adjust energy use based on need, they're the most efficient type of furnace, as well as the quietest. Some models also include a fan that runs during the summer to reduce your home's cooling needs, and some also have a dehumidifier function. Variable-speed furnaces are not very common, most multi-stage furnaces have just two speeds -- high and low -- but they are a good option if you're looking for a new system.
In addition to saving fuel, variable-speed furnaces use less electricity to power the fan motor. According to the American Council for an Energy-Efficient Economy, the amount of electricity used to run a furnace motor can be significant. Thus, a more efficient, variable-speed fan motor can produce significant savings.
Elsewhere in this report:
Furnace Overview and Recommendations: Experts say that upgrading your old furnace to a new, high-efficiency furnace will lower your heating bills -- maybe by a lot. Editors discuss the types of furnaces and heating systems, as well as factors involved in choosing a new furnace.
Furnace Efficiency: A discussion of how furnace efficiency affects your wallet and the environment. Multi-stage verses single stage systems are explained.
Gas and Oil Furnaces: The two main fuel sources for furnaces are gas and oil. Editors explain the various merits of each type of fuel, and how the energy efficiency of any type of furnace be improved.
Boilers and Heat Pumps: Boilers and heat pumps provide heat differently than forced air furnaces and are growing in popularity. Radiant floor heating is also discussed.
Buying Guide: Not sure if you should upgrade your furnace? We discuss what factors to consider to help you decide, as well as next steps in purchasing a furnace.
Our Sources: These are the expert and user sources we consulted to give the most comprehensive overview of all types of home heating systems. They are listed in order from most helpful to least.