High-Efficiency Furnaces: Are High Efficiency Furnaces Worth It?

On paper, high-efficiency furnaces seem like a good investment in energy bills and the environment. There are levels of efficiency among the high-efficiency furnaces, and their prices reflect it. Your geographical location will help determine what level is adequate for you. To evaluate the upfront cost of a high-efficiency furnace, you should take a holistic view of your current furnace’s ongoing costs. Fuel cost, ongoing maintenance, frequency of repairs, and age help determine if high-efficiency furnaces are worth the initial high cost.

Even if a high-efficiency furnace makes long-term financial sense, the high cost could be a barrier to entry for many homeowners. Some options assist with this challenge, and Ygrene offers a PACE program that requires no upfront cost, and you repay through your property taxes.

Replacing a furnace is never an easy decision with so many options. We invite you to read through a few points of consideration we’ve put together before buying and installing a high-efficiency furnace.

What are the Current Options?

Choosing a high-efficiency furnace is more difficult now than it was just five years ago. Furnaces have gotten more efficient, and the defined efficiency line has been blurred. One way to assess high-efficiency furnaces is to look at their AFUE (annual fuel utilization efficiency), which determines how efficient the furnace is in converting fuel to heat.

When looking at the cost savings of purchasing and installing a new high-efficiency furnace, remember that your current furnace is most likely a couple of decades old. Furnaces that are a decade old or more have an AFUE rating of around 60 percent – meaning that 60 percent of the fuel becomes heat, and 40 is lost. To put it another way, you are throwing away 40% of your fuel. That’s money being underutilized.

The new generation of furnaces is required by the U.S. Department of Energy (DOE) to have a minimum AFUE of 80 percent. High-efficiency furnaces have an AFUE ranging from 90 to 98.5%. The higher the efficiency, the higher the costs because of their complex manufacturing and components to meet the DOE’s standards. These include the addition of new electronic or hot surface igniters, state-of-the-art heat exchangers that draw warmth from the exhaust, and variable-speed blowers.

Which AFUE efficiency is suitable for your home will be determined by your geographical location, fuel costs, local building codes, and budget. Homes located in areas where winters can dip below freezing will rely heavily on their furnace to keep temperatures steady and comfortable for long periods of time. These locations would benefit highly from a 90% AFUE and above high-efficiency furnace. Other areas with mild winters would do well with an 80% AFUE. If your home is located where fuel is more expensive, a higher efficiency furnace will save you money in the long run. Let’s not forget about local building codes because they could require a specific minimum AFUE for furnaces.

Your options for high-efficiency furnaces are plentiful, but it is up to you and your situation to determine what AFUE efficiency rating is the best for your home. 

What About Energy Star Furnaces?

Energy Star certification for gas-powered furnaces varies from region to region. In the southern half of the U.S., Energy Star models can be 10 to 12 percent more efficient than baseline models. However, to receive the Energy Star label in the northern half of the country, furnaces must be a minimum of 15 percent more efficient than the 80 percent AFUE baseline.

This highlights a crucial point for anyone considering a new furnace: the more you have to rely on your furnace, the more important efficiency is. If the furnace is operating heavily for four months of the year and occasionally for seven or eight months, then homeowners have more time to benefit from the energy efficiency. This also means that the time to recuperate the costs is shorter for a high-efficiency furnace in a cold climate than for a similar furnace in warmer weather.

All Energy Star certified furnaces in the U.S. have more than 90 percent AFUE, so they are all considered high efficiency. The minimum qualifying AFUE to receive Energy Star certification is 90 percent in the South. In the North, it is 95 percent. These furnaces must minimize air leakage and have a state-of-the-art adjustable speed fan with a magnet motor to be certified.

As you evaluate furnaces for your home, consider that Energy Star certified models will be highly efficient and are a great baseline if you don’t want to spend too much time researching your options.

How Much Can a New Furnace Save?

Since the AFUE is in percentage form, it is easy to estimate savings. The cost of natural gas will fluctuate from year to year, the weather will change, and different variables within the home can affect overall furnace performance.

Heating costs will differ depending on the season, so the best strategy is to review monthly bills for the most recent 12 months. Begin by adding the cost of heating for all 12 months together. Next, subtract the average AFUE for your current furnace from the high-efficiency furnace you would like to buy. (Use the standard 90 to 95 percent Energy Star minimums as a default if needed.) Next, multiply the resulting percentage by the total cost over the 12 months. The answer will be the expected annual savings brought on by the upgrade. 

If you’d like a quicker answer, take a look at Energy Star’s Savings calculator to get a rough estimate of your savings when you buy and install a high-efficiency furnace.

How Do I Pay for my New Furnace?

The biggest drawback to high-efficiency furnaces is their upfront cost. There are options to finance a furnace, but a unique one to look at is PACE. PACE, which stands for property assessed clean energy financing, helps cover the upfront costs of efficiency improvements for your home. Since the best furnaces offer an efficiency improvement of 30 to 38.5 percent compared to older furnaces, there is a good chance that a furnace upgrade qualifies for PACE financing.

PACE programs help homeowners make energy-saving improvements to their homes for no upfront costs. Instead, the amount financed is paid back over time through an addition to your annual property tax bill.

Ygrene is a sound choice for homeowners looking to utilize the PACE program. Ygrene’s goal is to make home energy improvements easier to finance and remove that barrier for all homeowners. You can find out if you qualify in under 30 minutes, and there are always friendly specialists willing to help and answer any questions.

Get Ygrene Financing Approval Today

Are High-Efficiency Furnaces Worth it?

The short answer is yes; they are worth it. However, you must evaluate your unique situation to determine what kind of high-efficiency furnace is the right fit for you. We hope we have given you enough information to feel confident as you browse the internet and hardware stores for your next furnace.