Phone: (419) 472-1106

What Determines the Most Efficient Furnace for Your Home


What Determines the Most Efficient Furnace for Your Home

What Determines the Most Efficient Furnace for Your Home

On a cold and windy night recently, a friend and I got talking about heating costs, a topic on the minds of many people this time of year. Well, being in the HVAC business, furnace efficiency was a subject that I could really talk about!

Furnace efficiency ratings explained

Recent regulations are making furnaces more energy efficient than ever. Furnaces are rated by Annual Fuel-Utilization Efficiency (AFUE), a measurement for 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%; modern furnaces have minimum ratings of 78% (for oil), and as high as 99% (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% of total heating energy. However, a high-efficiency furnace will cost less to operate than a standard furnace. For example, if you replace an old system with an AFUE of 60% with a new system with an 80% AFUE, it's estimated that you'll save approximately $25 for every $100 you used to spend on heating costs in a season. A 90% 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. However, experts generally say that if you live in an area with harsh winters, such as the Toledo area, a high-efficiency furnace will pay for itself over time.

Environmental impact of furnace efficiency

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% efficient with a new system that is 90% 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 choice even if it is not the most cost-effective.

Comparing high-efficiency and standard-efficiency furnaces

If you're replacing a standard-efficiency furnace, the idea of installing a high-efficiency unit might be tempting. In some cases, opting for a high-efficiency furnace is a good idea. But not always.

As with most things in HVAC, it all depends.

Let’s look at an example: Today’s standard-efficiency gas furnace provides 80% Annual Fuel Utilization Efficiency (AFUE), meaning 20% of the energy produced by natural gas is expelled as exhaust. High-efficiency furnaces offer 90% or more AFUE. In fact, a rating of 95% AFUE is common among new gas-powered furnaces.

So, a 95% furnace is more efficient than an 80% furnace. It should be a simple choice, right?

Well, not really. These furnaces operate differently, too. An 80% furnace uses open combustion to generate energy from natural gas. In other words, it sucks air from the surrounding area. A 95% furnace doesn't do that - it uses sealed combustion, a process by which the furnace sucks in air from the outdoors. If your HVAC contractor installs the 95% furnace correctly, it will pull in outdoor air via a dedicated PVC pipe.

Here's why this matters for homeowners replacing a furnace:

  • Cost: If you're replacing an 80% furnace that's in a vented attic or crawl space, you probably won't make up the difference in cost when you install a 95% unit. The 80% furnace needs combustion air. In a vented space, that combustion air is already there. If you opt for the 95% furnace, you'll need to create a pathway for combustion air to enter the unit. Installation is trickier, so it's more expensive.
  • Safety: If your furnace is in a vented area, gases produced by the combustion process generally don't pose a safety risk. But if your furnace is in a sealed attic or encapsulated crawl space, open combustion does have the potential to cause problems. You're better off installing a 95% furnace with a concentric vent that both sucks in air and expels exhaust. In an unvented environment, the 95% furnace is a safer choice.

Beyond the furnace’s efficiency rating

AFUE isn't the only specification you should look at when choosing a new furnace. If energy efficiency matters to you, it's also important to understand the difference between single-stage, two-stage or modulating furnaces.

Single-stage furnaces only have one setting: full blast. When a single-stage furnace is running, it's blowing hot air into your home using the maximum capacity possible. A two-stage furnace, on the other hand, has two different speeds: full blast and "slow," a speed that usually works out to around 65% of the furnace's capacity.

Most of the time, the slower speed is enough for heating your home and doesn't require as much energy as a single-stage furnace. It's also quieter. You won't get that "whoosh" of warm air every time the heat turns on. When the temperature drops significantly and the slower speed won't keep your home warm, the second stage kicks in and the furnace operates at full blast.

This is important because both 80% and 95% furnaces are available as single-stage or two-stage units. An 80% furnace with two stages of heat will usually be better for your energy bills than a 95% furnace with just one stage.

Some furnaces even come with a fully modulating gas valve, which enables the furnace to operate at a variety of speeds and control the amount of hot air that enters your home at any given time.

So AFUE isn't the end-all, be-all metric for furnace efficiency. Depending on your situation, other factors might matter even more!

What’s the right furnace for you?

Factors like furnace location, goals for energy efficiency and various home attributes make everyone's situation unique. With that caveat, here's the best furnace choice for your home if:

  • You're replacing an 80% furnace in a vented space: Go with a new 80% furnace. If you want a more energy efficient model, consider a two-stage unit with variable airflow before committing to a 95% furnace and the extra construction that it will require.
  • Your new furnace will live in an enclosed or encapsulated space: A 95% furnace makes sense here. For even greater efficiency gains, consider a two-stage or fully modulating unit with variable airflow
  • Your furnace exhausts into a chimney: A 95% furnace with a new exhaust vent is a good idea in case the chimney liner has been compromised. You don't want to create a situation where exhaust gases creep into your home! If you go with another 80% model, consider installing a new chimney liner for safety.
  • Energy efficiency is your top concern: A fully modulating 95% furnace with variable airflow is your best choice. Just keep in mind that you might not enjoy good ROI if you're replacing an 80% furnace in a vented environment.

The good news is that you'll probably improve efficiency no matter what. Unless you replace a single-stage 80% furnace with a virtually identical unit, there are efficiency gains to enjoy. Even upgrading to a two-stage unit is a major change if you're used to a standard 80% furnace!

So, should you go for the higher AFUE percentage with your next furnace? Now you know how to make the right decision!

We would love to hear from you. Great companies want honest, compassionate feedback that helps them serve you better. Please tell us how we are doing and ask any question that you might want answered, reach out at

Your question may be the highlight of our next post!

Fry services and installs: Furnaces, Air Conditioners, Humidifiers, Dehumidifiers, Tank and Tankless hot water heaters and backup generators. We service Residential and Commercial customers.

At Fry, we are A Breath of Fresh Care.