Most U.S. homes are heated with either furnaces or boilers. Furnaces heat air and distribute the heated air through the house using ducts; boilers heat water, providing either hot water or steam for heating. Steam is distributed via pipes to steam radiators, and hot water can be distributed via baseboard radiators or radiant floor systems, or can heat air via a coil. Steam boilers operate at a higher temperature than hot water boilers, and are inherently less efficient, but high-efficiency versions of all types of furnaces and boilers are currently available.
A central furnace or boiler's efficiency is measured by annual fuel utilization efficiency (AFUE). The Federal Trade Commission requires new furnaces or boilers to display their AFUE so consumers can compare heating efficiencies of various models. AFUE is a measure of how efficient the appliance is in the energy in its fuel over the course of a typical year.
Specifically, AFUE is the ratio of heat output of the furnace or boiler compared to the total energy consumed by a furnace or boiler. An AFUE of 90% means that 90% of the energy in the fuel becomes heat for the home and the other 10% escapes up the chimney and elsewhere. AFUE doesn't include the heat losses of the duct system or piping, which can be as much as 35% of the energy for output of the furnace when ducts are located in the attic.
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, consider installing a heat pump system.
The minimum allowed AFUE rating for a non-condensing 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 non-condensing furnace. Although condensing units cost more than non-condensing units, the condensing unit can save you money in fuel costs over the 15- to 20-year life of the unit, and is a particularly wise investment in cold climates.
You can identify and compare a system's efficiency by not only its AFUE but also by its equipment features, listed below.