High Efficiency Furnaces

Proponents of high efficiency furnaces claim that these units use less fuel than conventional furnaces, and that this is good for both your wallet and the environment.

But, there are downsides as well, and it’s easy to lose track of that in the feel-good optimism of high-efficiency marketing:

  • high-efficiency furnaces are more expensive up-front
  • high-efficiency require more complicated machinery and more complicated installations

If these systems aren’t installed properly by an experienced technician, homeowners can potentially face years of frustrating and expensive repairs.

Efficiency Standards

The heating industry in the United States measures the fuel efficiency of a furnace in terms of its annual fuel utilization efficiency or AFUE. According to the U.S. Department of Energy, heating systems meeting minimum DOE efficiency standards earn AFUE ratings of at least 80 percent. High efficiency furnaces, in contrast, have AFUE ratings of 90 to 98.5 percent.

While no organization measures and calculates the AFUE of 20 – 40 year-old furnaces, many organizations and contractors guestimate that such units probably have an AFUE of 60% or less. Replacing such an outdated appliance with even a medium efficiency furnace would save the homeowner a minimum of 20 percent on energy usage.

Which Furnaces are High Efficiency?

Here is a partial list of high-efficiency natural gas furnaces:

The Technology Behind Improved Efficiency

An older furnace typically has a standing pilot igniter that ignites fuel in a combustion chamber and heats air as it travels to the heat exchanger. There, a fan blows it via the home’s ductwork to individual rooms. Meanwhile, the hot exhaust gases generated in the combustion chamber go up the chimney. Typically, the combination of pilot light and exhaust gases wastes 20 to 40 percent of the fuel burned.

Mid-Efficiency Furnaces

A mid-efficiency furnace (those that meet the DOE’s 80 percent AFUE standard) features some upgrades over the older models. Some come with dual heat exchangers that draw more warmth from the air but still waste up to 20 percent of the fuel value. Some have variable-speed blowers that do not count toward the AFUE rating but still conserve electricity.


  • Less expensive to purchase and install than higher-efficiency models
  • Simpler systems typically result in lower maintenance costs


  • Use more fuel and produce more byproducts than higher efficiency models
  • Require roof (chimney) venting

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High Efficiency Furnaces

A higher-tech furnace uses an electronic or a hot surface igniter, eliminating the old-fashioned standing pilot light that burns a small but constant quantity of gas. Also called a condensing furnace, this type of unit ushers condensed exhaust gases into a second heat exchanger designed to extract as much of the remaining heat as possible. A venting system expels the cooled air while the condensation left behind drains away with the help of an integrated pump.

An ultra-efficient furnace has a programmable thermostat that controls the speed of the heat exchanger fan to maximize performance. By running the blower longer at lower speeds, it reduces noise and delivers heat more evenly over time while conserving energy. The most efficient of these high-tech models has a waste factor of only 1.5 percent.


  • Fuel efficient
  • May qualify for Energy Star rebate


  • Greater up-front expense
  • Requires professional maintenance
  • Retrofits can be complex

Tax rebates for High Efficiency Furnaces

The US federal government offered a $150 tax credit for gas furnaces that were at least 97 percent efficient, and which had a blower fan that required less than two percent of the unit’s total energy efficiency. However, this tax credit expired at the end of 2016.

How Quickly Does Fuel Efficiency Pay for Itself?

The US government estimates that Energy Star certified gas furnaces save their owners an average of $94 per year in energy costs in the northern United States, and $36 per year in energy costs in the South.

While estimates and details will vary, you can expect to spend at least $2,000 more to move from an 80% efficient furnace to a 95% efficient unit. (And, you can easily spend much more).

In the northern US, that puts your payback period at more than 20 years.

Of course, your situation may vary a lot from those “average” savings. If you want to figure out how much a high-efficiency furnace would cost you, you should get quotes from several contractors, and read more about calculating the payback period.

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