How Much Can a 95% Efficient Furnace Save Me Over an 80% Efficient Furnace?

Homeowners are very concerned about rising prices for natural gas and the impact it can have on their heating bills this winter. If you are shopping for a furnace and debating the merits of an 80% or 95% efficient furnace, this guide will help you make up your mind.

Energy Savings with a 95% Furnace Vs. an 80% Furnace

You’ll use about 15% less energy with a 95% efficient gas furnace than you will with an 80% gas furnace. That is what the numbers mean, of course. A 95% AFUE (annualized fuel utilization efficiency) furnace will convert 95% of the fuel it burns into heat for your home while 5% of the heat will be lost in the exhaust gases. High-efficiency gas furnaces use a secondary heat exchanger to capture more heat before it is vented.

An 80% efficient furnace converts 80% of the fuel into heat while 20% is wasted. You can see how that will contribute to higher energy bills. Many homeowners find that amount of waste – and that much extra carbon emissions – to be distasteful. It’s not just the desire for lower energy bills that is driving the demand for efficient furnaces. It is the also the desire for more ecofriendly products.

Now, you’ll have to do the math to figure out how much lower your energy bills will be with a 95% efficient furnace. Review your energy use from last year. If you are replacing a 70% gas furnace, you’ll use 10% less with an 80% furnace and about 25% less with a 95% furnace. Multiply your gas savings by the current cost of natural gas or propane and you’ll get a very good idea of what your savings will be.

Deciding if a 95% Gas Furnace is Cost Effective

You will pay 15% to 25% more for a 95% efficient furnace, depending on the model. The more features it has like a 2-stage or modulating gas valve and a variable-speed blower, the more it will cost. Some 80% furnaces have 2-stage and variable-speed performance too. It will help to know prices for the exact models and sizes you are considering.

Divide the extra cost of the 95% furnace by the amount of money you expect to save per year. For example, if you will save $150 per year and the 95% furnace costs $600 more, it will take you approximately 4 years of lower bills to make up the difference. This is called the “payback” period.

In cold climates, the payback period is always shorter than in warm climates.

Now, consider how long you intend to stay in your current home. The longer you intend to live there, the more it makes sense to choose the more efficient gas furnace. Here’s another incentive: Many gas companies are offering credits and rebates for Energy Star gas furnaces. See what you utility company is offering and how that will affect the finances of the deal.

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