Gas furnaces have become increasingly efficient over the years and are a major expense in your home in terms of both up front and ongoing (energy) cost. The more efficient your furnace the higher the rating and the less wasted energy you are expending and paying for. It’s worth knowing more about how a furnace is rated to ensure you make the best choice for your home.
The Annual Fuel Utilization Efficiency or AFUE rating measures the efficiency of a gas furnace to turn fuel into energy. The minimum current standard is 80% whereas a high efficiency model is rated at 90% – 97%. The remaining percentage represents the fuel used in the heating process that is lost.
The higher the AFUE rating the more expensive the furnace but the more effectively it burns fuel and turns it into heat.
Annual Fuel Utilization Efficiency
The higher your furnace’s AFUE rating the more efficiently it converts gas into heat to potentially lower your heating bill. Higher-rated furnaces also cost more money to purchase however.
The AFUE ratio specifically refers to the per dollar amount of gas that is converted into energy. The remainder is wasted through air leaks, inefficient burners and through older furnace designs that simply weren’t as efficient at the time they were built. So if a furnace is rated at 90% AFUE, it means that 90% of the gas used is converted to energy (heat) and 10% is lost in the process.
Furnace efficiency ratings
Furnaces are classified as follows:
Mid efficiency-rated furnace: 80% – 83% where 80% is the current government-mandated minimum allowed. Older style furnaces weren’t nearly as efficient at burning fuel and can no longer be manufactured.
High-efficiency furnace: 90% – 98% efficiency. The highest rated furnaces currently available. They waste only 2% – 8% of fuel and convert the remainder into heat.
With around 50% of energy costs in your home spent on heating and cooling, any time you can lower your costs through increased efficiency will save you for years to come.
It is worth repeating: The AFUE rating is specific to the furnace and doesn’t take into account how efficient your home is in terms of its insulation and how airtight it is ie. are there air leaks in your HVAC system and air ducts?
Conventional vs. condensing gas furnaces
The two main types of furnaces that exist are older style conventional furnaces and newer style condensing furnaces. Conventional furnaces are less efficient and allow significant heat gas and heat to escape through the chimney. We’ll stick with discussing condensing furnaces since they are ones widely sold today due to their efficiency.
Condensing furnaces are high-efficiency models that use a secondary heat exchanger to extract heat from water vapor that would normally exit your house through the chimney. With this extra efficiency, it helps push furnace efficiency levels well over 90% as a result.
So while you will undoubtedly be purchasing a condensing furnace, you do have three types of products to choose from in terms of the blower motor functionality.
Efficiency and circulating air blower control options
The blower motor is responsible for forcing hot air (furnace) and cold air (air conditioner) through the air ducts and vents of your home to condition the temperature in your home to what you need. A blower motor can cost around $450 on average to replace but a more expensive model might cost as much as $800 to replace as it’s a key component of your furnace.
The three common product categories for furnaces with respect to the blower motor are:
Single-stage furnace
Generally range from 90% – 92% AFUE. The single blower motor operates at one consistent speed which is typically fast and somewhat loud. If you have a 90% AFUE furnace installed from the 1980s onward, you may still have a single blower furnace. You will notice the sudden gust of air and noise from the motor kicking in.
These older-school designs have larger blower motors which are not nearly as energy efficient as the smaller motors used in newer furnaces. These furnaces tend to pump a consistently large amount of heat in a short period of time and then shut off when the desired temperature is reach. They switch on again when needed.
Two-stage furnace
Generally range from 92% – 96% AFUE. The two-stage blower motor is capable of operating at two speeds: The lower speed is used on days that don’t require as much power and the higher speed operates when temperatures are colder where more air flow is required. The motor kicks in at a lower speed and builds up to the second speed as required. A two-stage furnace generally operates at low speed at around 25% of capacity the majority of time so fuel usage is lower.
While a two-stage furnace runs longer than a single-stage furnace as a result, it provides more consistent heat and at the lower speed air is also better filtered.
Variable-speed furnace
Generally range from 96% – 98% AFUE. Also offers up to 85% better energy efficiency than the older school single stage furnace. A variable speed blower has a computer chip to actively monitor air flow within the home to adjust based on need. With a variable-speed blower, the motor kicks in slowly and builds up speed but can also adjust speed based on what is required in the home at the time.
So in that regard, a variable-speed furnace is even more efficient and smarter than a two-speed model and much more so than a single speed furnace. It also delivers heat at a more consistent rate with less swings in temperature.
What type of furnace makes sense for you
Here are some things to consider when deciding on what type of furnace makes sense for you.
Where do you live: Your local weather patterns will largely determine what you need. If you experience very cold winters and/or very hot summers, your furnace and AC respectively may operate better with a higher efficiency two-speed or variable speed furnace if it fits your budget since temperatures will be more difficult to keep in line given the extremities that you face.
Coming from a cold winter environment myself, I can attest that cold winters keep a single stage furnace running longer and it isn’t uncommon on a cold day for the furnace to run for long periods of time, shut off briefly and then turn back on again shortly thereafter when the temperature drops.
How efficient is your house: If you live in an older house with potentially more gaps and air leaks and less insulation, heating and cooling costs will rise as a result. You can buy the most efficient furnace on the market but the lack of air tightness and insulation will hurt regardless. Before investing in an expensive furnace, check your window seals, door seals and air ducts to ensure you aren’t losing air. Check your attic for insulation to ensure it’s adequate for your local weather.
We lived in a 10 year old house and when we had our insulation checked, found that it was low by local standards given that the builder had obviously gone cheap when building the home.
Also contact an HVAC specialist to do an inventory for you to see where you can make improvements in your air duct system.
What temperature do you like keeping your house set at: I remember as a kid in the middle of winter seeing my mum walk over and turn the heat up on the thermostat. Then my dad would notice and would turn it down. If you like having your home particularly cool in the summer and warm in the winter, you’ll want a more energy efficient furnace to provide you with the desired temperature at a cost effective energy cost. If on the other hand you are ok with a slightly warmer house in summer and cooler house in winter you may not require a more expensive furnace that operates at a variable speed. Try to make everyone in the house happy.
Local energy costs and your budget: Local gas and electricity costs vary by region. Some areas have time of use charges which make energy cost more during peak hours (weekdays) and less at night and on weekends. How much you are willing to spend or save on energy can impact what sort of furnace makes the most sense for you.
Saving more money on energy costs over time may require you to spend more money up front on an energy efficient furnace. Let’s talk about that in more detail.
What different AFUE levels offer in terms of energy savings
Using an outdated 60 AFUE furnace as a way of comparison as to what old technology used to offer, let’s see how furnaces with AFUE ratings of 80, 93 and 98 compare in terms of how much money you can expect to save on energy costs using New York state as the example. This takes into account local factors specific to New York which is a heavily-populated state and one that experiences cold winters and hot summers.
| AFUE rating | Energy savings | 5 year savings | 10 year savings |
| 60 | 0% baseline | $0 baseline | $0 baseline |
| 80 | 25% per year | $4,669 | $9,338 |
| 93 | 35% per year | $6,627 | $13,254 |
| 98 | 38% per year | $7,124 | $14,248 |
So an AFUE 80 rated furnace may save up to 25% over an older AFUE 60 rated mode. An AFUE 93 furnace would save even more, up to 35% on energy costs over an AFUE 60 model. In this instance, the difference between an AFUE 80 and 93 model may save you an additional $6,627 – $4,669 = $1,958 over 5 years if you choose the (more expensive) AFUE 93 model.
While AFUE 60 furnaces are long gone, the table shows how current high efficiency furnaces of AFUE 90+ save money on energy costs during the expected 15+ year lifespan of a furnace.
You can easily find many AFUE 80, 90, 93, 95, 96, 98 models to choose from. A wide variety of well-known furnace manufacturers exist including Lennox, Trane, Carrier, Bryant, Rheem and more.
Other furnace considerations
- Modern furnaces are built without a pilot light which is the constantly lit flame that ignites the burners when the furnace switches on. If you’ve ever experienced a pilot light that keeps shutting off, you know what a pain it can be. Newer furnaces have more efficient lighting methods that lower energy usage and raise the AFUE.
- Don’t forget to learn about your air filter and how it affects air filtration in the home. Check out my article on How Often To Change A Furnace Filter to earn about the frequency of replacement and also to understand what MERV means.
- If you are thinking about a new furnace, learn about the differences between a furnace and heat pump to understand which makes the most sense for you.
- Less efficient cheaper furnace models often come with shorter warranties than higher efficiency more expensive ones.
AFUE rating vs SEER rating
We already mentioned that AFUE stands for Annual Fuel Utilization Efficiency and is a measurement that represents the percentage of energy efficiency that a furnace offers. So the higher the AFUE, the better as it tells you what percentage of energy is used to produce heat (the AFUE number) and what part is wasted (the remainder).
The Seasonal Energy Efficiency Ratio (SEER) represents a measurement of the cooling power of an air conditioner or heat pump so it’s the opposite of AFUE in that it measures the efficiency of cooling. The minimum SEER standard is 14 which is about 20% – 30% more energy efficient than a unit from the early 2000s. A SEER 16-rated AC unit uses about 13% less energy than a SEER 14 unit so it offers a savings of $13 for every $100 spent on cooling which is not insignificant.
Factors other than AFUE to consider
It’s important to know that the AFUE rating only refers to the one provided by the furnace itself. It doesn’t take into account the rest of the heating/cooling system in your home which is clearly unique to your house.
While a furnace AFUE rating is an important factor in the efficiency of your heating system, there are other things to keep in mind. These factors include:
Does your chosen furnace use natural gas or heating oil? Natural gas is supplied automatically through a pipe and is less expensive whereas heating oil tends to be more expensive and less convenient as it has to be trucked in and pumped into a tank.
How well insulated is your home? The better insulated your home the more energy efficient and the less you’ll spend on heating costs and AC in the summer. The less insulated your home, even the best furnace in the world will still have to work extra to heat your home due to the heat loss you may experience. Inspect the insulation in your home and confirm the local recommended insulation level to ensure you have enough to meet your weather environment.
Do you have leaks in your air ducts? If you have leaks in your duct work you will lose heat/cool air. It’s that simple. Again, even the highest efficiency-rated furnace can’t fix that. Have your ducts inspected by an HVAC expert if you live in an older home or believe you may be losing air. It is literally costing you money.
Should you upgrade from a 90% furnace?
If a 90% AFUE-rated furnace is the beginning of the high efficiency range and 98% is the highest, does it make financial sense to upgrade to buy a new higher-rated furnace to save money?
You can view the the table above again to get a sense as of how each level of AFUE rating can help save money on energy which can help (and then some) to defray the cost of buying and installing a more expensive furnace.
Once your furnace gets to the 15 year mark, you’re getting close to the time at which your furnace might start needing costly repairs if you haven’t experienced this already. It is also quickly creeping closer to its eventual replacement date which is typically in the 15 -20 year mark. Plus an older furnace of 15 years plus is less efficient and consumes more energy than an older one.
Think about the criteria above that we discussed – your climate, home efficiency, desired temperature and local energy costs – and figure out how that compares to your budget to make the best decision possible.
Your first step could be to do an inventory of your home to address air leaks and insulation deficiency before spending more money on a new furnace.