Understanding the Efficiency Rating of Furnaces & Boilers

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.