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Buying a High-Efficiency Furnace

A high-efficiency furnace can pay for itself through energy savings.

Need help with your furnace NOW? Get a Local Heating Pro Fast!

What is the best forced-air furnace to buy? This expert, unbiased furnace buying guide will help you choose between the major brands to find the right heater for your home and budget.

Is it time for you to buy a new high-efficiency forced-air furnace? Sky-high energy bills, diminishing resources, and environmental concerns have brought a great deal of attention to the topic of home energy efficiency in recent years—especially when it comes to heating. Homeowners are struggling to spend less, use less, and pollute less without giving up the warmth and comfort they’ve come to cherish.

If your old furnace has stopped working entirely, it’s definitely time for a new, high-efficiency furnace. But, even if your old furnace seems to work okay, it might be time to consider replacing it with a more efficient model—to save money over the long run and enjoy more comfort and quiet now.

The efficiency of your furnace can make a major difference in your energy bills. According to the U.S. Department of Energy (DOE), heating and cooling account for approximately 56 percent of the energy used in a typical U.S. home (the portion for heating is about 30 percent). Obviously, if you can squeeze more efficiency out of your heating and cooling equipment, you can make a major dent in your monthly energy bills. If you intend to stay in your home for a few years, upgrading from an old, inefficient furnace to a new, high-efficiency model can pay for itself and improve your comfort.

An obsolete furnace can be very expensive

If your furnace was installed before 1992, it is probably obsolete. In an effort to curb energy waste and pollution, the U.S. Department of Energy (DOE) instituted standards for manufacturers at the beginning of 1992 that required every new furnace to turn at least 78 percent of its fuel into heat. On May 1, 2013, these minimums rose to 80 percent. All new models sold must meet or surpass this; efficiencies climb as high as 98.5 percent with the best models.

So, if your gas or oil-burning furnace was installed before 1992, you’re probably sending 30 percent or more of your energy dollars up the furnace flue, and, by the way, pumping up to 4 tons of carbon dioxide, the “greenhouse gas,” into the atmosphere each year. In fact, if you have an older forced-air furnace operating at very low efficiencies, it probably produces about half the heat it could be providing on the same amount of fuel.

Determining your furnace’s age

Try to get a fix on how old your furnace is. Open the cabinet and look for dates. Write down the model number and try searching it on the Internet. If you can’t find the approximate date of manufacture, you’ve probably answered the question with a resounding “time to replace.”

If your furnace has a standing pilot light instead of electronic ignition, consider this to be another sign that it is an energy waster.

Making a furnace buying decision

Most furnaces sold in the United States are made by a handful of major manufacturers including Lennox, Trane, and Carrier (which also makes Day and Night and Bryant). In the following articles, we’ll help you sort through the brands, models, features, jargon, warranties, costs, and so forth to ease your decision-making.

The biggest differences between the most expensive and least expensive models boil down to energy efficiency, comfort, and warranties. Now we’ll take a closer look at these factors. For information on determining the right size of furnace, see How to Size a Furnace.

How Furnace Efficiency Is Measured

A furnace uses energy to produce and deliver heat. The more heat it can deliver with a given amount of energy, the better: This is the essence of “efficiency.” Furnace manufacturers strive to produce appliances that both burn fuel efficiently and require minimal energy (typically electricity) to run the blowers that circulate the heat to the house.

Newly proposed EnergyGuide labels specify the states where an appliance can legally be installed.

Furnace fuel efficiency ratings

This furnace delivers over 98 percent efficiency.

The measurement for furnace fuel efficiency is called an Annual Fuel Utilization Efficiency (AFUE) rating. All new furnaces are posted with this rating, generally in the form of a yellow “EnergyGuide” label that’s required by the Federal Trade Commission (FTC). Yellow EnergyGuide labels list estimated annual operating costs for furnaces under specific conditions; these are meant for comparison shopping only.

AFUE ratings run from the 80 percent minimum to 98.5 percent. The meaning of this percentage is very simple: This is the ratio of the furnace’s annual fossil fuel that is converted into usable heat. In other words, the highest-performing model converts 98.5 percent of its fuel into heat.

Saving energy dollars

Another way to think about this is to consider that 98.2 cents out of every dollar spent for energy to heat your home is converted to heat. With a lower performing model, 20 cents or more of every dollar is wasted. Those dollars can add up in a hurry at today’s energy prices. (The AFUE rating does not take into account the loss of heat that occurs in the duct work delivery system; this loss can be as high as 35 percent with attic duct work.)

High efficiency or not?

Though most makers call their furnaces “high efficiency,” the DOE only refers to units with an AFUE higher than 90 percent as “high efficiency” and models with an 80 percent to 83 percent AFUE as “mid efficiency.” As minimums rise, these descriptions become even less meaningful. Just pay attention to the percentage. And be aware that, depending upon where you live, it may not be worth it to spend the big bucks for the highest efficiency unit available. Though these units usually make sense in cold climates, the savings might not pencil out if you live in a mild-winter climate.


Future minimum AFUE requirements for furnaces will be even tighter, and they’ll be tailored to the type of fuel used and whether the unit is “weatherized” (built for outdoor installation) or “non-weatherized” (intended only for installation indoors). Furnaces designed specifically for use in a mobile home will have slightly lower minimums. Where they are installed will also affect the regulations: All non-weatherized furnaces installed in the northern United States must have at least a 90 percent AFUE.

Electric forced-air furnace efficiency

An electric furnace or boiler doesn’t lose heat up its flue because it doesn’t have a flue. For this reason, it typically will have an AFUE in the 95 percent to 100 percent range. That’s great, however, the problem with an electric furnace is that electricity is a much more expensive fuel source than the fossil fuels, so an electric furnace rarely makes economic sense. If you want to rely on electricity as a fuel source for heating, a much better alternative is a heat pump (see the Heat Pumps Buying Guide).

Energy-Saving Furnace Features

The combustion side of furnaces—the mixing of combustion air with fuel—is an area where technological advances have improved energy efficiency. High-efficiency furnaces keep close control over the amount of air mixed with gas and vary the speed of the blower motor depending upon the demands of the home. “Sealed combustion,” which means bringing all combustion air from outdoors and mixing it with the fuel at a controlled rate, maximizes heat from the fuel.

Gas burners blast into the heat exchanger, warming the furnace quickly.


Two-stage furnace gas valves & motors

Gas valves have become more sophisticated, too. A two-stage gas valve warms up the furnace quickly and then drops back to a more economical flow. Many gas-fired, high-efficiency furnaces also save on the electricity required to power the blower motor, though this savings is not factored into the AFUE rating. They do this by coupling a sophisticated, programmable thermostat to a variable-speed motor. Unlike a conventional system—where the furnace goes on, blows hot air into the house at full force for a few minutes, and then shuts off—a variable-speed, or “variable-capacity,” system runs the blower for longer periods at lower speeds. It provides quieter and more even and comfortable heat and doesn’t consume electricity unnecessarily.

Electronic pilot & condensing gas furnaces

During the past few years, manufacturers have used several innovations to boost efficiency. One early advancement was the move from the standing pilot light, which burns gas even when the furnace is dormant, to electronic spark ignition, which fires the furnace on demand. The higher-efficiency models are called “condensing gas furnaces.” They run exhaust gases through a second heat exchanger to extract and use available heat that’s otherwise exhausted. These models pull out nearly all of the heat, sending cool exhaust out and leaving behind condensed water. This condensate, 5 to 6 gallons per day, is drained or pumped away by a condensate pump connected to the appliance. A key feature to look for when buying a condensing gas furnace is a long-term warranty on the heat exchanger; the best types are built to resist the corrosive effects of moisture and chemical buildup for the life of the house.


Because they extract so much heat from a furnace’s exhaust, one bonus of condensing furnaces is that they may be vented out through a wall with inexpensive PVC pipe, an important feature that saves money and the hassle of routing a flue up through the roof.

Combined efficiency features

Furnace models with the highest efficiency ratings, those with an AFUE greater than 90 percent, combine several advancements into one package. For example, the Lennox SLP98V, which has up to 98.2 percent AFUE, automatically adjusts the speed to match the heating requirements, captures maximum heat with a stainless-steel secondary heat exchanger, and can interact intelligently with a thermostat for optimal efficiency.

The Carrier Infinity ICS has up to a 95 percent AFUE; it has a condensing gas furnace with a microprocessor control board that automatically adjusts the furnace output and blower speed for optimum efficiency based on information from the thermostat. Both are high-quality products worthy of consideration.

How Much Does a Furnace Cost?

Buying a furnace isn’t like buying a new dishwasher. It is difficult to price competing brands online or in stores because 1) many furnaces are not sold online or through retailers (they are sold through HVAC dealers or wholesalers), and 2) prices normally don’t include installation. New furnaces are almost always installed by HVAC contractors, so the best way to figure out what a system is going to cost is to ask for free bids. You can get free estimates from this free online service: Find a Pre-Screened Local Furnace & Heating Pro.

Circumstances will dictate the actual cost of replacing an old furnace with a new, high-efficiency model. If the new unit can be connected to the existing duct work and exhaust flue, it may run from about $3,000 to $4,500, installed, depending on the equipment you choose.

Of course, the higher the efficiency, the higher the cost of the unit. If you live in a mild climate, it may be overkill to get the most efficient model—the extra cost probably won’t be offset by energy bill savings (but the environment will love you). If you live in a cold-winter climate, it’s often wisest to buy the highest efficiency you can afford. When buying a system, you should ask your dealer to help you figure the payback in terms of energy savings.

NEXT SEE: How to Buy a Furnace

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About Don Vandervort
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Don Vandervort developed his expertise more than 30 years ago as Building Editor for both Sunset Books and Home Magazine. He has written more than 30 home improvement books and countless magazine articles. He appeared regularly on HGTV’s “The Fix,” and served as MSN’s home expert. Don founded HomeTips in 1996.

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  1. I had a furnace installed and the company I bought it from wrote it up As a 97% efficient. After the install I see the yellow sticker says it is a 96.3% is this normal or did I pay for something that I didn’t get?

    Also I asked another HVAC company that was at my house how to tell if my furnace was a single stage or a two stage? I was told it is a two stage but only wired for one of the stages. Is there a reason they would do this? And what is the best route to get it fixed or my $ back.

    • The second stage kicks on using a formula based on how long the second stage was on the last cycle. So you only need one stage wiring to make it work. You really need to buy the manufacturers thermostat to take full advantage of a variable speed furnace which will cost hundreds of dollars. This is why most dealers don’t do it. Or you can just use the furnace logic which is really pretty decent as when it is super cold out it remembers that it used the second stage. And normally it will just stay in the first stage for 15-20 mins before kicking into the second stage.

      • Scott,
        I can’t speak for all manufacturers but there are thermostats available that will monitor if the house is being brought up to temperature in 1/10 of 1 degree increments while also keeping watch of how long it’s taking to heat the house. These thermostats are using a technology called proportional integral. This is how you achieve full functionality of your new furnaces capability and are selling yourself short if you don’t have this. This may require new thermostat wire or a thermostat that has 2 parts to be able to use the existing thermostat wire. We use and recommend American Standards gold 824 thermostat if the thermostat wire can be replaced and the gold 850 if it cannot. Honeywell’s higher end thermostats also use this technology. The variable speed part of the furnace is primarily controlled by the logic of the furnace. The only exception is some furnaces, American Standard and Trane, you can control the fan speed when the system isn’t heating or cooling (when your running the fan on or humidifying).If you have a modulating furnace, as opposed to 1 or 2 stage, then you will need the manufacturers thermostat to properly control the heating output. Modulating is like an accelerator in your car. We install American Standard because they’re the best for furnaces, heat pumps, and air conditioning. Check out consumer reports if you need verification.

    • See below. The efficiency discrepancy is likely a simple mistake. The bigger the furnace, the less efficient they typically are. The salesman may have made a simple mistake on efficiency and 0.7% isn’t going to make as big of a difference as having it installed correctly.

      The easiest way to know the specs is to look up the model number online. If it’s an american standard or trane unit, post here and I’ll let you know for sure but I don’t believe they have a 96.3% unit. They jump right from 96 to 97 but that’s always changing.

      If it’s 2 stage, it’ll have 2 pressure switches and 3 wires going to the gas valve. If you have 2 wires going to the gas valve its a single stage. Variable speed blower motors have more than 4-5 wires going to them. They usually have 10-20 wires going from the circuit board to the blower motor. These are pretty safe descriptions but there are a few rare exceptions, particularly with communicating equipment that is becoming more popular but typically reserved for the top of the line modulating furnaces.

      • Tim, thanks so much for weighing in on these questions…you are clearly an HVAC expert! It’s really great to have you helping our community here at HomeTips. Please come back often!

  2. OMGosh !!!!!! My home is a beautiful 70 yr old brick Cape Cod. Beautiful curb appeal and great house. Husband decides to replace our furnace (working fine mind you).
    New HE furnace. OMGosh!!!! Huge PVC pipes now sticking out of front of my house. Not side,,,,front. Not only detestable ugly, but even worse, when it kicks on, huge billows of white smoke flow out and block my lovely view from my favorite reading chair. Combined with the noise makes me think my home is now the Queen Mary and we are setting sail. I can’t even imagine how it looks to the neighbors across the street. Concentric vent cover not an option. HE system is not ready for prime time. Help!!!! Is going back to forced air a possibility.

    • Nancy,

      While I’m not sure where you’re located, odds are you’re out of our service territory. Have an American Standard dealer come out and take a look and find out what can be done to fix it. Your homes a huge investment and being comfortable in your investment is a priority in my book. Ask for a sidewall termination kit, preferably installed in the back or side yard. Pictures are available here: http://s3-media1.fl.yelpcdn.com/bphoto/AriaAociSid1m_X0SXiH2Q/o.jpg They’ll be able to properly size the furnace and make sure the duct work and all the associated components are working properly. A new furnace, installed properly, will make your home more comfortable and will operate more quietly than your older furnace. Best of luck

  3. Aside from upfront cost, you open the door up to have the whole house considerably more comfortable, with better air quality, and lower your utility bills. Yes, I’m a contractor (it doesn’t have to be a dirty word) but I’m still in awe how much more comfortable my house is. I went high end and if you’re going to be in your house for 10 years or more do it. 5 years go middle of the road but still high efficiency if you’re in the northern half of the country with an ecm, variable speed blower motor regardless of where you are. If you’re moving in 2 years or less talk to your realtor to see if you should just keep the existing equipment going or its worth replacing for resale purposes. FYI, my customers that go high end have all said they love it and will be happy to speak to anyone on the fence. Just happened again this most recent week. Find a good contractor preferably by work of mouth but online reviews are helpful as well.

    • Great advice, Tim!!

  4. I’m putting a second floor on my rancher. My existing system is central air and gas heater forced air. The AC is a carrier from 05. The furnace is a Kenmore electronic ignition not sure how old but it’s not that old. I want HE furnace so I can eliminate my chimney. I already replaced my hot water heater to forced exhaust. I just want to replace the furnace and keep my AC equipment. Is this possible?

  5. I’m looking to replace my furnace but don’t want to replace my AC components. Is this possible?

    • Yes, the furnace is just the “air handler” that delivers the AC, so you don’t need to replace the AC condenser, etc. Just be sure the furnace you buy will adapt to the plenum, evaportor coils, etc., that connect to it. For more, see http://www.hometips.com/how-it-works/central-air-conditioners.html

      • The contractor is trying to sell me new AC equipment plus a new HE furnace which he would replace at cost. The irony is I need just the opposite. If an HE furnace is compatible with my ac then that’s the route I’ll take. He was telling me that I might not be able to match the “old ac” with a High Efficiency furnace. Thank you for your help.

  6. Great discussion page, thank you. We are just beginning our search for replacements. We have 2 furnaces in our house and 2 airconditioning units. Upstairs and west basement zone, Downstairs and east basement zone. the upstairs/west AC went dead… circa ’98, the furnace is still good but also circa ’98. The second furnace and AC are still working…. My question is: Is there a high efficiency option that vents via the current stack system. you see our Hot water tank is associated to the heating vent stack and if one or eventually two of the furnaces are changed to direct venting, it may become to cold in the winter to handle the exchange for just the tank. we have already been warned that we may need to reline or install a narrower chimney liner to accommodate just the hotwater tank exhaust if the furnaces do not vent using the same chimney.

  7. Looking for mobile home furnace with standing pilot.
    Off grid, so they tell me electric pilot is to sensitive to voltage fluctuations, already replaced circuit boards .


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