Furnaces are rated by their Annual Fuel Utilization Efficiency (AFUE). The AFUE is a calculation of the percent of heat produced for every dollar of fuel consumed. The higher the AFUE rating, the lower your fuel costs. All furnaces manufactured now must have at least a 78% AFUE.
If your furnace is 20 years old or more, it probably has an AFUE of just 50 to 60%. By 1990, the typical efficiency had risen to 80%. Some models today have an efficiencies of 95% or higher!
If your furnace is old and you are thinking of replacing it, going for the highest efficiency can be a good financial decision. The ENERGY STAR logo will help you quickly find furnaces with an AFUE of at least 90%. The highest efficiency models can cost a little more up front, but you'll save on fuel bills.
Example: Let's say you are currently spending $500 per year on gas, heating with a 65% furnace. Replacing it with a 95% efficient model instead of a less efficient 78% efficient model will save you around $75 / year in gas costs. The higher installation cost can often be paid off in just a few years as a result of the fuel savings. Furthermore, over the next 20 years, the high-efficiency model will result in 30,000 pounds less carbon dioxide (CO 2) getting dumped in our atmosphere.
