Upgrading to a high efficiency furnace or boiler is an effective way to save money on home heating.

Most U.S. homes are heated with either furnaces or boilers. Furnaces heat air and distribute the heated air through the house using ducts. Boilers heat water, and provide either hot water or steam for heating. Steam is distributed via pipes to steam radiators, and hot water can be distributed via baseboard radiators or radiant floor systems, or can heat air via a coil. Steam boilers operate at a higher temperature than hot water boilers, and are inherently less efficient, but high-efficiency versions of all types of furnaces and boilers are currently available. To learn more about furnaces, boilers and other types of home heating systems, explore our Energy Saver 101 infographic on home heating.

A central furnace or boiler’s efficiency is measured by annual fuel utilization efficiency (AFUE). The Federal Trade Commission requires new furnaces or boilers to display their AFUE so consumers can compare heating efficiencies of various models. AFUE is a measure of how efficient the appliance is in converting the energy in its fuel to heat over the course of a typical year.

Specifically, AFUE is the ratio of annual heat output of the furnace or boiler compared to the total annual fossil fuel energy consumed by a furnace or boiler. An AFUE of 90% means that 90% of the energy in the fuel becomes heat for the home and the other 10% escapes up the chimney and elsewhere. AFUE doesn’t include the heat losses of the duct system or piping, which can be as much as 35% of the energy for output of the furnace when ducts are located in the attic, garage, or other partially conditioned or unconditioned space.

An all-electric furnace or boiler has no flue loss through a chimney. The AFUE rating for an all-electric furnace or boiler is between 95% and 100%. The lower values are for units installed outdoors because they have greater jacket heat loss. However, despite their high efficiency, the higher cost of electricity in most parts of the country makes all-electric furnaces or boilers an uneconomic choice. If you are interested in electric heating, consider installing a heat pump system.

The minimum allowed AFUE rating for a non-condensing fossil-fueled, warm-air furnace is currently 78% for all types of furnaces except for those designed and manufactured specifically for use in mobile homes, for which the minimum AFUE is 75%. In  the future, minimum AFUE requirements for furnaces will be based on the type of fuel consumed (i.e., gas, oil, or electricity), whether the unit is non-weatherized (i.e., intended for installation indoors) or weatherized (i.e., intended for installation outdoors), and whether the unit is designed specifically for use in a mobile home.

Beginning on May 1, 2013, for non-weatherized furnaces and January 1, 2015, for weatherized furnaces, the minimum AFUE requirements will be as follows:

*The minimum AFUE requirements for these product classes are unchanged from the current requirements.

For boilers, the minimum AFUE rating requirements vary based on the type of fuel used and the heating medium. The minimum AFUE rating for a gas-fired hot water boiler is 82%; the minimum AFUE rating for a gas-fired steam boiler is 80%; the minimum AFUE rating for an oil-fired hot water boiler is 84%; and the minimum AFUE rating for an oil-fired steam boiler is 82%. In addition, gas-fired boilers are not permitted to have a constant burning pilot, and hot water boilers are required to have an automatic means for adjusting the water temperature to match the heating load.

A condensing furnace or boiler condenses the water vapor produced in the combustion process and uses the heat from this condensation. The AFUE rating for a condensing furnace or boiler can be much higher (by more than 10 percentage points) than a non-condensing furnace or boiler. Although condensing models cost more than non-condensing models, a condensing furnace or boiler can save you money in fuel costs over the approximately 15- to 30-year life of the unit and is a particularly wise investment in cold climates.

You can identify and compare a system’s efficiency by not only its AFUE but also by its equipment features.

Furnaces and boilers can be retrofitted to increase their efficiency. These upgrades improve the safety and efficiency of otherwise sound, older systems. The costs of retrofits should be carefully weighed against the cost of a new boiler or furnace, especially if replacement is likely within a few years or if you wish to switch to a different system for other reasons, such as adding air conditioning. If you choose to replace your heating system, you’ll have the opportunity to install equipment that incorporates the most energy-efficient heating technologies available.

Retrofits are fuel-specific, so see the following sections for retrofit information:

Other retrofitting options that can improve a system’s energy efficiency include installingprogrammable thermostats, upgrading ductwork in forced-air systems, and adding zone control for hot-water systems, an option discussed in Heat Distribution Systems.

Although older furnace and boiler systems had efficiencies in the range of 56% to 70%, modern conventional heating systems can achieve efficiencies as high as 98.5%, converting nearly all the fuel to useful heat for your home. Energy efficiency upgrades and a new high-efficiency heating system can often cut your fuel bills and your furnace’s pollution output in half. Upgrading your furnace or boiler from 56% to 90% efficiency in an average cold-climate house will save 1.5 tons of carbon dioxide emissions each year if you heat with gas, or 2.5 tons if you heat with oil.

If your furnace or boiler is old, worn out, inefficient, or significantly oversized, the simplest solution is to replace it with a modern high-efficiency model. Old coal burners that were switched over to oil or gas are prime candidates for replacement, as well as gas furnaces with pilot lights rather than electronic ignitions. Newer systems may be more efficient but are still likely to be oversized, and can often be modified to lower their operating capacity.

Before buying a new furnace or boiler or modifying your existing unit, first make every effort to improve the energy efficiency of your home, then have a heating contractor size your furnace. Energy-efficiency improvements will save money on a new furnace or boiler, because you can purchase a smaller unit. A properly sized furnace or boiler will operate most efficiently, and you’ll want to choose a dependable unit and compare the warranties of each furnace or boiler you’re considering.

When shopping for high-efficiency furnaces and boilers, look for the ENERGY STAR® label. If you live in a cold climate, it usually makes sense to invest in the highest-efficiency system. In milder climates with lower annual heating costs, the extra investment required to go from 80% to 90% to 95% efficiency may be hard to justify.

You can estimate the annual savings from heating system replacements by using the table on this page, which assumes that both heating systems have the same heat output. However, most older systems are oversized, and will be particularly oversized if you significantly improve the energy efficiency of your home. Because of this additional benefit, your actual savings in upgrading to a new system could be much higher than indicated in the table.

Specify a sealed combustion furnace or boiler, which will bring outside air directly into the burner and exhaust flue gases (combustion products) directly to the outside, without the need for a draft hood or damper. Furnaces and boilers that are not sealed-combustion units draw heated air into the unit for combustion and then send that air up the chimney, wasting the energy that was used to heat the air. Sealed-combustion units avoid that problem and also pose no risk of introducing dangerous combustion gases into your house. In furnaces that are not sealed-combustion units, backdrafting of combustion gases can be a big problem.

High-efficiency sealed-combustion units generally produce an acidic exhaust gas that is not suitable for old, unlined chimneys, so the exhaust gas should either be vented through a new duct or the chimney should be lined to accommodate the acidic gas (see the section on maintaining proper ventilation below).

Annual Estimated Savings for Every $100 of Fuel Costs by Increasing Your Heating Equipment Efficiency*

*Assuming the same heat output

The following maintenance should be provided by a heating system professional.

Anytime you maintain, retrofit, or replace a gas or oil heating system you need to be concerned with air quality. Combustion air is needed by all oil and gas heating systems to support the combustion process. This air is provided in some homes by unintentional air leaks, or by air ducts that connect to the outdoors. The combustion process creates several byproducts that are potentially hazardous to human health and can cause deterioration in your home. You can protect yourself from these hazards, as well as maintain energy efficiency, by ensuring that your chimney system functions properly and that your heating system is properly ventilated. In some cases, installing a sealed-combustion furnace or boiler can also help.

Properly functioning chimney systems will carry combustion byproducts out of the home. Therefore, chimney problems put you at risk of having these byproducts, such as carbon monoxide, spill into your home.

Most older furnaces and boilers have naturally drafting chimneys. The combustion gases exit the home through the chimney using only their buoyancy combined with the chimney’s height. Naturally drafting chimneys often have problems exhausting the combustion gases because of chimney blockage, wind or pressures inside the home that overcome the buoyancy of the gases.

Atmospheric, open-combustion furnaces and boilers, as well as fan-assisted furnaces and boilers, should be vented into masonry chimneys, metal double-wall chimneys, or another type of manufactured chimney. Masonry chimneys should have a fireclay, masonry liner or a retrofitted metal flue liner.

Many older chimneys have deteriorated liners or no liners at all and must be relined during furnace or boiler replacement. A chimney should be relined when any of the following changes are made to the combustion heating system:

Some fan-assisted, non-condensing furnaces and boilers, installed between 1987 and 1993, may be vented horizontally through high-temperature plastic vent pipe (not PVC pipe, which is safely used in condensing furnaces). This type of venting has been recalled and should be replaced by stainless steel vent pipe. If horizontal venting was used, an additional draft-inducing fan may be needed near the vent outlet to create adequate draft. Floor furnaces may have special venting problems because their vent connector exits the furnace close to the floor and may travel 10 to 30 feet before reaching a chimney. Check to see if this type of venting or the floor furnace itself needs replacement. If you smell gases, you have a venting problem that could affect your health. Contact your local utility or heating contractor to have this venting problem repaired immediately.

Topics: @DOE Featured, AFUE, All-Electric Furnace, Electricity Costs, Federal Trade Commission, Fossil Fuel Energy, Heat Output, U.S. Department of Energy, Utility Industry

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