“Have you seen last winter’s utility bills?! There must be something we can do to bring down these costs.”

If you’re frustrated with your energy bills from last winter, you might consider replacing your old furnace with an energy-efficient one. Furnaces with ENERGY STAR certifications, rated by the Department of Energy’s unbiased testing, “are designed to provide the best comfort for the least energy.” 

The efficiency of a heating system is measured as a percentage AFUE, Annual Fuel Utilization Efficiency. It’s a ratio of annual heat output to annual fuel energy consumption. A furnace with a 70% AFUE, for example, converts 70% of the fuel to heat and uses 30% of the fuel in the heating process. The higher the AFUE, the greater the efficiency of the heating system. A high-efficiency furnace increases that AFUE to 96% or higher.

Armed with last year’s heating bills, the age and AFUE of your current furnace, the AFUE of a high-efficiency model, and the energy efficiency calculators available online, you can calculate the anticipated savings achieved by converting to a new heating system. The ENERGY STAR website lists a number of high-efficiency furnaces for 2020, noting lifetime operating costs and the percent savings over standard furnaces. The energy cost savings for the various furnaces range between 20% and 22%.

The purchase price of a moderately efficient furnace may be on average $1,000 more than the cost of a standard furnace. A high-efficiency unit (96%+ AFUE) could add, on average, $2,000 or more to the cost of a standard furnace. Remember, these heating systems have a life of 15 to 20 years. As an added savings, you may benefit from the tax credits under the Non-business Energy Property Credit, extended through 2020. ENERGY STAR lists the maximum tax credit of $150 for a new furnace and $50 for a new, more efficient, main air circulating fan. (These fans use 2% or less of total furnace energy.)

Can you reduce your monthly fuel bills by installing a high-efficiency furnace? Yes, you can. Consult a reputable dealer to determine which heating system is right for you, how you can take advantage of tax credits, and how soon the upgrade to a high efficiency furnace will pay for itself.