Understanding Furnaces – How Efficiency Works

Most furnaces these days are purchased with two factors in mind, in this order:

  1. Price.
  2. Efficiency.

Modern furnace models are always more efficient than those made 20 or more years ago, and there are a range of performance options across budget levels. Budget is mostly closely tied to efficiency, and the efficiency rating of a new furnace is expressed through Annual Fuel Utilization rating (AFUE).

Here’s how you can decode AFUE and find the best balance between efficiency and price.

How AFUE ratings work

Old and dirty gas furnaceThe AFUE rating applies to all furnaces using:

  • Propane.
  • Natural gas.
  • Oil.

The rating is read as a percentage of fuel paid for vs fuel returned as heat. So a furnace with a 98% AFUE rating returns 98% of the fuel you pay for as heat. The remaining 2% is lost in the conversion and burning process.

The AFUE on your old furnace, if it looks like the unit pictured here, is probably around 70%.

Once a new furnace is manufactured, it is evaluated (not by the manufacturer) based on the energy losses that occur due to changing demands, and during the cyclic on and off functions.

This calculation is made based on ideal circumstances, including error-free installation. It’s worth noting that not all furnaces are the same, and specialized installation knowledge for each manufacturer is required for error-free installations. That’s why our team attends regular manufacturer training and stays up on all new industry trends and techniques.

Minimum requirements for new furnaces

Canada is a leader in furnace energy efficiency requirements. The US requires furnaces to achieve a range of efficiencies, like:

  • Oil powered furnaces- 82%
  • Oil-fired boilers and gas furnaces- 83%
  • Non-weather gas furnaces- 80%
  • Mobile home gas furnaces- 80%

The Canadian federal government requires a minimum AFUE of 90% on new furnaces, and the provincial British Columbia government is currently mulling over a step up to 94% AFUE.

How much $$$ can you save?

wallet with moneySwitching to a newer and more efficient furnace will lead to cost savings, but most homeowners don’t know exactly what to expect. Will a new furnace allow you to save for a trip to Argentina? Or a trip to Swiss Chalet?

The American Council for Energy Efficient Economy broke down the savings that could be experienced when a homeowners switches from an old furnace of 50% AFUE, to a new model with a 95% rating.

  • For each $100 a homeowner with the 50% model spent, a homeowner with a 95% AFUE furnace would spend $53. Potentially thousands of $$$ in savings in a year.

For the sake of simplicity, it works out to about $1 per percentage of efficiency. So a 98% AFUE furnace will save about $40 per month on a $200 heating bill over an 80% AFUE furnace. Over the lifetime of the furnace it will pay for itself, a replacement, and a trip for the whole family to Argentina. Not bad!

Get a quick quote today

It doesn’t take much to get an accurate quote on your new furnace and installation. Just call a member of our team for the most accurate, transparent quote around.

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