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A central furnace or boiler's efficiency is measured by annual fuel utilization efficiency (AFUE). AFUE is a measure of how efficient the appliance is in using electricity or fossil fuels (oil or gas) over the course of a typical year. 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, you might consider installing a heat-pump system.

The minimum allowed AFUE rating for a noncondensing fossil-fueled, warm-air furnace is 78%; the minimum rating for a fossil-fueled boiler is 80%; and the minimum rating for a gas-fueled steam boiler is 75%. 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 unit can be much higher (by more than 10 percentage points) than a noncondensing furnace. Although a condensing unit costs more than a noncondensing unit, the condensing unit can save you money in fuel costs over the 15 to 20-year life of the unit.

  • Annual Fuel Utilization Efficiency:

  • The Federal Trade Commission requires new furnaces or boilers to display their Annual Fuel Utilization Efficiency (AFUE) so consumers can compare heating efficiencies of various models.

  • AFUE is the ratio of heat output of the furnace or boiler compared to the total energy consumed by a furnace or boiler. An AFUE of 90 percent means that 90 percent of the energy in the fuel becomes heat for the home and the other 10 percent 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 percent of the energy for output of the furnace when ducts are located in the attic.

  • Existing, older furnaces fall between 68 and 72 percent AFUE. Existing, older boilers test a little higher at 72 to 76 percent AFUE. Since 1992 furnaces are required to have greater than 78 percent AFUE, and boilers must have greater than 80 percent AFUE.

 

System equipment efficiency: You can identify and compare a system's efficiency by not only its AFUE but also by its equipment features. You'll also want to compare the warranties of each furnace or boiler under consideration.

  • Conventional, older heating systems:

  • Natural draft that creates a flow of combustion gases

  • Continuous pilot light

  • Heavy heat exchanger

  • 68-to-72 percent AFUE

  • Mid-efficiency heating systems:

  • Exhaust fan controls the flow of combustion air and combustion gases more precisely

  • Electronic ignition (no pilot light)

  • Compact size and lighter weight to reduce cycling losses

  • Small-diameter flue pipe

  • 80-to-83 percent AFUE

  • High-efficiency heating systems:

  • Condensing flue gases in a second heat exchanger for extra efficiency

  • Sealed combustion to protect the heat exchangers from indoor chemicals and to isolate the combustion process from indoor air (Condensing furnaces may also be equipped with a plastic pipe that brings air directly to the burner from the outdoors. Combustion gases are generally exhausted outside laterally via a pipe installed through a wall.)

  • 90-to-97 percent AFUE

  • Estimating fuel-cost savings and payback:

  • If you know the AFUEs of the systems you want to compare, you can estimate the annual savings from heating system replacements by using Figure 17. For instance, if you have a conventional, older system with a pilot light and no vent damper installed, it will probably have an AFUE of about 60 percent.

Figure 17: Annual Estimated Savings for Every $100 of Fuel Costs
by Increasing Your Heating Equipment Efficiency (assuming the same heat output)

Existing System AFUE

New/
Upgraded
System
AFUE

55%

60%

65%

70%

75%

80%

85%

90%

95%

50%

$9.09

$16.76

$23.07

$28.57

$33.33

$37.50

$41.24

$44.24

$47.36

55%

----

$8.33

$15.38

$21.42

$26.66

$31.20

$35.29

$38.88

$42.10

60%

----

----

$7.69

$14.28

$20.00

$25.00

$29.41

$33.33

$37.80

65%

----

----

----

$7.14

$13.33

$19.75

$23.52

$27.77

$31.57

70%

----

----

----

----

$6.66

$12.50

$17.64

$22.22

$26.32

75%

----

----

----

----

----

$6.50

$11.76

$16.66

$21.10

80%

----

----

----

----

----

----

$5.88

$11.11

$15.80

85%

----

----

----

----

----

----

----

$5.55

$10.50

90%

----

----

----

----

----

----

----

----

$5.30

  • To estimate the amount you're spending on gas for heating, you can take your gas bills from the last three years, add them up, and then divide by three to get an average yearly cost. If you use gas for purposes other than space heating, like cooking or water heating, you have to account for this by subtracting the cost of the gas billed for these uses as follows:

  • Add up your gas bills for the four warmest months when heating is not needed.

  • Multiply the result by three to get an estimate of annual non-heating gas costs.

  • Subtract the result from your average yearly cost to get the space-heating cost.

If you want to estimate the annual return on investment (AROI) and the number of years required to repay your investment, you can use the following simplified formulas. To be cost-effective, the payback period should be less than 10 years or so.

Annual savings / initial investment = Annual return

Example: $250 / $1500 = 0.17 or 17% AROI

Initial investment / annual savings = Years to Pay Back

Example: $1500 / $250 = 6 years

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