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Understanding Furnace AFUE Ratings

High energy and utility bills can be tough to stomach. Energy bills typically soar in summer, but homeowners in cold climates can attest that energy bills are not much cheaper in wintertime, either. Costly monthly utility bills are just one reason you should consider replacing your old furnace with a high-efficiency furnace to help cut down on power consumption. A new furnace is much more reliable and quiet. But above all, it can help shave as much as 45 percent of costs from your monthly energy bills. Modernize created this guide to help homeowners understand which furnaces are the most energy-efficient, based on their Department of Energy efficiency rating, or AFUE rating. By understanding furnace AFUE ratings, you can purchase the system that best meets the needs of your home.

Table of Contents

What is an AFUE Rating?

All new furnaces have a rating that helps consumers understand their energy efficiency versus fuel consumption. Think of it as the “miles-per-gallon” rating for automobiles.

Furnaces manufactured after 1992 come with an Annual Fuel Utilization Efficiency (AFUE) rating. This rating is equal to the amount of heat they produce for every dollar in fuel they consume. Furnaces with higher AFUE ratings provide greater heat output for the amount of money it takes to power them.

The federal minimum AFUE rating for residential furnaces is 80 percent, which means the furnace produces 80 percent of heat for the fuel it consumes. The remaining 20 percent is typically lost through leakage, inefficiencies within the furnace itself, and other detrimental factors. Conversely, a forced-air furnace with a 95 percent AFUE rating loses just 5 percent of heat for the amount of natural gas or fuel oil required to power it.

The difference in AFUE ratings can add up to hundreds of dollars lost or saved on annual energy consumption. Mid-efficiency furnaces typically offer an AFUE rating between 80 and 85 percent, while high-efficiency furnaces have an AFUE rating between 90 and 97 percent.

Furnaces made prior to the 1992 Energy Policy Act, which required energy-efficient standards for appliances, warm-air furnaces and air conditioning units, do not have AFUE ratings and are prime candidates for replacement with a high-efficiency unit.

You can find your furnace’s AFUE rating on the bright yellow EnergyGuide label that was placed on the device by its manufacturer. The guide is required by the Department of Energy and helps consumers understand the energy efficiency of their appliances.

Note that the annual operating cost numbers provided are averages. Actual costs can vary depending on how heavily the appliance is used.

Choosing the Best HVAC System for Your Home

Now that you know what Annual Fuel Utilization Efficiency (AFUE) rating means, you might be considering hiring a licensed HVAC contractor to upgrade your outdated unit. But there is a bit more you need to know beforehand.

Below we briefly cover the different types of HVAC systems, as well as additional factors to consider when shopping for the best HVAC system for your home.

Types of HVAC Systems

There are four primary options for HVAC systems.

  • Split system. Most new residential construction utilizes a split HVAC system. There is an outside air conditioning unit to provide cooling in the summer and a furnace (usually placed in the attic, rafters or basement) to provide heat in the winter.
  • Hybrid or dual-fan system. This a slightly more advanced split system that utilizes an electric air heating system along with a standard combustion furnace when internal temperatures dip to a predetermined level.
  • Ductless system. This system, used when standard ductwork cannot be deployed, features an outdoor AC unit and a heat pump for circulating heat.
  • Packaged furnace/AC system. Packaged heating and cooling systems can be a mix of all three of the above technologies depending on a homeowner’s needs.

A licensed HVAC contractor can help you determine which type of system best meets your needs and fits within your budget.

Other Factors to Consider When Choosing a Furnace

A furnace’s AFUE rating is not the only measure of its efficiency. Here are a few additional details homeowners should take into consideration when shopping for a new HVAC system or furnace.


Make sure you get a furnace that produces enough BTUs, or British Thermal Units, to adequately heat your home. The capacity for a 2,000 square-foot home is different from the needs of a 4,500 square-foot home. Your HVAC contractor can help determine the appropriate-sized unit for your residence.


Your overarching goal is to purchase an HVAC system that properly heats and cools your home. It is not like buying a car, where you can opt for an affordable compact over a luxury sedan, since both will take you to your destination.

Generally speaking, less-expensive HVAC systems will not perform as well as more expensive and efficient models. You will end up paying more over the long-term in higher utility bills.


Some homeowners are handy and can self-service just about any appliance in their homes. For the rest, you will want to include routine maintenance on your HVAC system to ensure peak performance. Ideally, you will form a long-term relationship with your HVAC contractor to ensure your system is routinely inspected and maintained.


Even if you purchase a new HVAC system, you will still face repairs at some point in time. Comparing manufacturer warranties prior to buying can help save some money when something breaks.

This guide is intended to help clear up AFUE ratings and other key concerns about furnaces and HVAC systems. But there is no substitute for professional insight. Discussing your needs and budget with a licensed HVAC contractor is a good next step in your quest to increase the energy efficiency of your home.

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