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Does Furnace Efficiency Really Matter on My Energy Bill?

Does Furnace Efficiency Really Matter on My Energy Bill?

The average household in the United States spends a little over $2,000 a year on energy bills alone. By far, the largest share of this expense is generated by heating and cooling costs. The appliances you use can directly affect your monthly expenses.

The more you know about how furnace efficiency translates into cost, the better you’ll be able to decide if and when it’s time to upgrade your home heating appliances. Ultimately, it’s possible to reduce your annual energy bill by 10 to 30 percent just by focusing on the efficiency of one item in your home—your furnace.

How Does Furnace Efficiency Affect Cost?

There are two main ways that the efficiency of your heating system affects your utility bills. The first is the lifespan of your furnace. Even relatively new furnaces can cost you more than you think. The second is new technology. Whether you want to retrofit your furnace with an updated thermostat or go all-in on efficiency and comfort, the number of options is extraordinary.

Aging Furnaces

Your furnace wasn’t designed to last forever. Over time, as the parts of your furnace age, your home will become more expensive to heat. This is due, mainly, to heat loss. Your furnace has to work harder to keep your home at the same temperature.


A furnace’s efficiency is measured using an annual fuel utilization efficiency (AFUE) rating. Inside your furnace, there’s a combustion chamber where gas is ignited and heat is generated. That heat is circulated with the cold air in your home before being redistributed through your vents. If you have an electric furnace, this process is the same except a heated coil, rather than gas, is used to produce warmth. Any air leftover from that exchange is pushed out through a metal duct and outdoors. Unfortunately, the air mixture expelled through the duct is still very hot. That heat is lost instead of being put to good use.

Your AFUE is a measure of the amount of heat lost during this process. Consequently, you can think of your furnace’s AFUE as the percentage of your utility costs that go to heating the outdoors. An AFUE of 90 means that 90 percent of the energy in the fuel becomes heat for the home and the other 10 percent escapes up the chimney or elsewhere. In that case, 10 percent of what you pay each month for heat is wasted.

Other Heat Loss

Note that the AFUE doesn’t include the heat loss of the duct system or piping, which can account for as much as 35 percent of the energy output of your furnace. When ducts are located in the attic, garage, or other cool space, heat loss is exacerbated. That’s why, even if you’re not ready to upgrade or replace your heating system, it’s important to know how furnace efficiency contributes to your monthly energy costs. You may find that insulating the space where your furnace ducts reside is an effective and low-effort way to decrease your heating costs.

A 10-year-old furnace is only halfway through its life span. But according to the Department of Energy, replacing it with a newer system could save you 20 to 40 percent on your utilities. This is due, not only to the degradation of your furnace and its parts over time, but also to the vast leaps in technology that have occurred in the last 5 to 7 years.

New Technology & Options

Since 2013, the government has required that furnaces in the northern region of the US have an AFUE of at least 90. Consequently, even if your furnace is only slightly over a decade old, you’re relying on significantly less efficient technology. A bare-bones but new furnace is likely to have an AFUE of at least 90 and up to 95.

Newer furnaces also have a number of features to increase furnace efficiency—options that weren’t commonly available 10 years ago. Programmable thermostats, for example, allow you to automatically adjust your heating when you’re away from the home or in areas of the home that you’re not using. These thermostats are Wi-Fi enabled so you can manage your heat settings from anywhere.

Heat pumps are another money- and energy-saving option that has become more popular in the last decade. These efficiency enhancers use electricity to move heat from warm spaces to cool spaces. Since heat pumps move rather than generate heat, they work well at nearly any temperature. Not only can an electric heat pump reduce the amount of electricity used for heating by up to 40 percent, but it also cools the home, conditions the air, and works as a dehumidifier.

Lastly, if you really want to get serious about saving on your energy bills, you could install a high-efficiency furnace. These appliances have a secondary heat exchanger. Where the average furnace creates warm air in a chamber and expresses it through the ducts, high-efficiency furnaces have a second chamber. In that area, the heat from the exhaust is collected. In essence, the high-efficiency furnace collects heat twice. The upshot? These furnaces waste almost no fuel as they heat your home. They have some of the highest AFUEs on record, some nearing 98.

Furnace Efficiency Makes a Big Impact

Without a doubt, it is possible to save a noticeable amount of money on your utility bills each month by assessing your furnace. There are also a lot of options—from simply insulating and cleaning your ductwork to replacing your whole heating system with something much more efficient. Tax credits are even available for certain furnace improvements, which will make your savings even larger.

If you would like information about your specific heating system and what you could do to achieve energy savings, you can contact an expert like the folks at Entek. An HVAC expert can make a whole house assessment just for you. These assessments focus on furnace efficiency but also comfort and safety. They can help you decide how to maximize the efficiency of your home while keeping your air clean and your family comfortable.

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