What is AFUE? High AFUE Not Means Low Operating Heating Cost

An efficient furnace is essential in providing homeowners with comfortable and affordable heating. Learning what AFUE is and how it can help you decide which type of furnace and fuel type to choose for your home is one of the first and most important steps you can take before heating your home. Though it’s commonly thought that AFUE, or Annual Fuel Utilization Efficiency, is the definitive guide to comparing all furnaces, there are some things to know before using this practical rating system that will help you properly choose the furnace that meets all of your heating needs, including cost.

What is AFUE?

AFUE is an acronym that stands for Annual Fuel Utilization Efficiency. In essence, it’s a simple rating system that is used to measure the efficiency of a furnace. Listed in percentages, typically on a scale of 30 to 100, the AFUE shows how much fuel a furnace can convert into usable energy. A furnace with an 80 AFUE rating, for example, means that 80% of the fuel is used, while 20% is lost through the exhaust.

Though AFUE is important in determining which furnace is most efficient, it doesn’t provide much insight into cost when comparing two different types of furnaces. If you’re looking to cut costs and save money, it’s more important to consider which type of fuel you’ll be using rather than the furnaces AFUE rating.

AFUE vs Fuel Type: Which One Is Important?

In order to use AFUE properly, it’s important to remember that the rating system only works on units that use the same fuel source, ie. two natural gas furnaces or two electric furnaces. Because fuel costs are different, comparing furnaces based on AFUE ratings will yield skewed results when determining which unit will be the cheapest to run.

Electric furnaces, for example, have an AFUE rating of 100, meaning that no fuel is lost when converting into energy used for heat. While they are the most efficient furnace in terms of their AFUE rating, electric heating is also one of the most expensive types of fuel. Compared to a natural gas furnace that may have an AFUE rating of 85, gas is still the cheaper furnace to run due to the low cost of fuel, despite the fact that 15% is lost. In this instance, efficiency does not equal a low cost of operation.

If you’re most concerned about cost, fuel type is the most important aspect when choosing the right furnace. If you’ve already decided on your fuel type, that’s when AFUE comes into play and can make a big difference long-term. When deciding between furnaces with the same fuel source, the AFUE rating can help you determine which unit is most efficient and therefore the one that will save you the most money down the line.

How to Choose Fuel Type?


The diagram is based on 2016 average fuel type prices of US: $0.12 per kilowatt-hour for power, $3.00 per MMBtu for gas, $2.02 per gal for propane & $2.13 per gal for heating oil.

Most of the determining factors of choosing the right fuel type are based on where you live. Though standard-efficiency natural gas is one of the most common and cost-effective types of fuel, it’s also not ready to everyone, especially those living in rural areas. As a result, residents without access to gas often turn to propane and oil as a means of energy for their furnaces. It’s also not uncommon for rural residents to employ the use of a wood-burning stove if their house is small enough to be sufficiently heated by that source alone.

When choosing the right fuel type, the best advice is to compare fuel prices. The key, however, is to compare the price per 1 million BTUs, or British Thermal Units, per fuel type. For example, the average price for natural gas in the U.S. is $17.75 per 1 million BTU and falls on the lower-to-middle end of the spectrum of gas prices. In comparison, propane is, on average, $36.40 per 1 million BTU; nearly double the cost for the same amount. The more efficient your furnace, however, the fewer BTUs is used every hour. Choosing an efficient furnace with a cheaper fuel type will ensure your heating is affordable. For most people, this means purchases a high-efficiency gas furnace and using high-efficiency natural gas, costing the average U.S. citizen $14.95 per 1 million BTU.

How to Choose AFUE From the Same Type of Heating Unit

Once you’ve determined your fuel type, you can begin to use AFUE to help you find the furnace that’s just right for your home.

While it may seem obvious at this point to choose a furnace with the highest AFUE rating, that’s not always the case. A high AFUE rating may verify its efficiency, but it also comes at a cost. As the AFUE of a furnace gets higher, so does the price, and depending on your current living situation, you may not want to invest that much money into your furnace.

For those who don’t plan to stay in their home for a long time or foresee an upgrade in the future, a lower AFUE furnace would prove to be more cost-effective in the long run. If you were to purchase a high AFUE furnace only to move two years later, it would be unlikely that you could make up the price different of a costly unit in such a short time. If you are in the home you know you are going to be in for the next few decades, however, or perhaps you are in the midst of designing and building your dream home, a high AFUE furnace is worth the investment. If you fall somewhere between the two, a mid-AFUE furnace may just be the right fit.

Once you have figured out your fuel type of choice and long-term plans for your home, AFUE is the rating system that will help you determine which furnace is the best deal for you. A higher AFUE means greater energy savings over time, so those living in the homes they’ll be in for years to come stand a better chance of reaping the benefits of choosing the most efficient unit. Those with short-term plans, on the other hand, may not yet want to take the plunge in order to save money. In any case, choosing the best fuel source and the right level of efficiency for your furnace will ensure you stay well heated when you need it most.

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