Furnace Energy Efficiency: What Do Those Ratings Mean?

When the cold season comes, heating your indoors rests entirely on your furnace or boiler. Statistics show that most US households use either a furnace or a boiler to keep their homes warm and comfortable during the cold months.

A furnace heats the indoor air and pushes it throughout the house through the ductwork. Boilers, on the other hand, heat up water which, in turn, heats the indoor air. Boilers can use either hot water or steam to heat the environment through radiators, radiant floors, or coils.

Did you know that not all furnaces are ideal for your home? That’s right! Different furnaces have different energy efficiency levels, so checking the ratings before buying or installing one in your house is crucial. A high-efficiency furnace, as the term suggests, functions without wasting much energy. 

Let us first break down what this means for you and your home. 

What is Furnace Efficiency Rating?

The efficiency of your central furnace is usually determined by a standard measure known as the AFUE (annual fuel utilization efficiency) ratio. This is the standard rating that all heating manufacturers must adhere to, as required by the US Department of Energy.

But what does the ratio mean? Don’t let the complex terms worry you. The AFUE ratio, or rating, simply means the amount of energy a furnace produces compared to every dollar of fuel it consumes.

It is usually a percentage of heat output for each dollar worth of fuel consumed. This helps the homeowners to understand whether their unit is economical and efficient or not. AFUE measures how well your furnace can generate heat energy from the fuel input over the course of a year. 

A higher ratio means higher efficiency. This is because the unit uses less fuel to produce more heat energy, which is what you want as a homeowner.

For example, an 75% AFUE rating is not very efficient. While 75% of the input fuel is converted to heat, 25% is unused. The 25% may have escaped through your chimney or elsewhere.  

There is one thing you should note: the AFUE rating doesn’t consider the energy lost later in the ductwork or piping. This means that while furnace energy efficiency might be high, your house may not get enough heat if you have a leaky duct system.

What is a High-Efficiency Furnace?

When you see the term “High-Efficiency Furnace,” it simply means a furnace with an AFUE rating over 90%. 

Usually, a high gas furnace efficiency rating ranges between 90 and 98.5% AFUE. Having a unit with such a high rating has major advantages for your household and your finances. 

An all-electric furnace will have an AFUE ratio between 95-100%. Why the difference? Electric furnaces are not affected by flue gas loss via the chimney, thus increasing their efficiency level.

However, this doesn’t mean that electric furnaces are favored over gas furnaces. Due to the high cost of electricity, many people still prefer high-efficiency furnace units to high-efficiency electric ones. A heat pump might be a better option if you are interested in buying an electric furnace.

How Do You Determine the AFUE of a Furnace?

When buying a new furnace for your house, you must consider its energy efficiency. This will determine the cost of your monthly energy bills and how comfortable your home will be during the cold season.

The AFUE of any furnace manufactured in the US is measured by comparing the unit’s heat production, in BTU (British Thermal Units), to the amount of fuel used (in dollars) over a certain period. Luckily, you don’t need to do that yourself. The Department of Energy requires each manufacturer to calculate and display these ratings on every unit they sell.

As such, manufacturers will display the AFUE ratings on the unit using a yellow sticker. Most manufacturers, if not all, will also display these ratings on their websites for every furnace model they sell. This makes it easy to differentiate high-efficiency furnace units from low-efficiency ones.

Advantages of a High-Efficiency Furnace

Whether it’s high energy-efficient gas furnaces or electric ones, there are numerous benefits for a homeowner to enjoy. These include:

Reduced Energy Costs

As indicated above, the higher the AFUE rating, the more energy efficient a heating unit is – a high-efficiency furnace converts almost all the fuel into heat energy.

This means that the unit is able to heat the indoors without requiring much fuel. When the unit uses less fuel, energy bills at the end of the month will also be lower as a result.   

Environmental Benefits

As we already know, fossil fuels are one of the main causes of global warming. This is a result of the greenhouse gasses produced when these fuels burn. This is no different when a furnace heats your home. A gas furnace uses natural gas or propane to heat your environment, while an electric one uses electricity that might also have been produced using fossil fuels.

The most efficient gas furnaces use less fuel to produce the same amount of heat. The less fuel being used, the fewer gas emissions into the environment. This is certainly a plus for the health of our planet!

Low Maintenance Costs

High-efficiency furnaces are a direct result of the advancement in technology. And, unlike the old furnaces that used to break down every now and then, these newer models are not only just efficient, but they are also long-lasting.

When the unit is durable and of high quality, it will undoubtedly work longer without breaking down. As a result, you will reduce your calls to the technician for repairs and other frequent maintenance issues. In the long run, the cost of maintaining the furnace will be lower.


Furnaces are essential during the colder season to help keep you and your home warm. However, if your furnace isn’t functioning at its proper efficiency, this can cause issues with your heating and your electric bill. If you’re unsure if your furnace is operating properly, call a qualified technician today.  

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