The most efficient heating system for your home is the system that reduces your energy use in the most cost-effective and realistic way.
3 Impractical Options
Wood heat can be very efficient and cost effective, if you have a supply or free or cheap wood. Radiant wood stoves are 100% efficient. So are pure-burning radiant gas heaters designed for indoor use.
However, these systems are not commonly used and can be dangerous, so we don’t discuss them further here.
In sunny climates when little heat is needed, simply allowing the sun to heat your home, known as passive solar heating, is free. But it is not practical for other climates.
Most Energy Efficient Systems
Here are top options for heating your home in an energy efficient manner. We explain each, give efficiency ratings, list pros and cons and provide system costs.
Geothermal Heat Pumps
Geothermal heat pumps make use of the renewable heat within the earth to produce effective, efficient heating.
The demand for geothermal systems grows by double digits in most years. And geothermal heat pump cost has dropped and stabilized, making them a better value for consumers.
How geothermal heat pumps work: A geothermal system is also called a ground source heat pump. The system collects heat from the sun that is stored in earth or water that maintains a fairly constant temperature all year. The refrigerant in the heat pump condenses that heat, providing enough to heat homes in the coldest climates.
In summer, it dumps heat from your home into the ground by reversing the process.
This exchange of heat takes place using a heat pump, water/glycol mix and loop system. A fuller explanation is available in our Geothermal Heat Pump Buyer’s Guide. Costs, brands and links to individual heat pump brand guides are included.
Why geothermal is so efficient: Like all heat pumps, a ground source system collects heat that is already present. It doesn’t burn fossil fuel or use electric resistance heat like a space heater.
Secondly, because temperatures remain much higher below the earth’s surface than in winter-time air, it is far easier to collect heat.
In summer, the cool earth or water receives heat much more readily than hot summer air. These temperature differences make geothermal much more efficient.
Most efficient: Today’s most efficient geothermal heat pumps have efficiency ratings of more than 35 EER for closed-loop systems and more than 45 EER for open-loop systems.
These ratings are from the Energy Star Most Efficient Heat Pump list.
Pros and cons: Tremendous efficiency is the primary benefit of geothermal heat pump systems. Loop systems are long-lasting. The high costs for equipment and repair are the drawbacks.
Geothermal heat pump cost: $11,000 to $25,500. Closed loop systems are less efficient than open loop systems, but cost less too.
Geothermal heat pumps pay for themselves most quickly through lower energy bills in very warm, humid climates. The second-best climates are cold climates. In moderate climates without high demand for either heating or cooling, geothermal is not a cost-effective choice.
Note: In this guide, we use EER (Energy Efficiency Rating) rather than SEER (Seasonal Energy Efficiency Rating). We do this for consistency.
Mini Split Heat Pumps
Mini split, aka ductless, heat pumps are an air-source system. This means that they draw heat from the air and dump heat into the air, as opposed to a geothermal system.
This is another HVAC niche that has experienced double-digit annual growth recently, taking market share from the standard split systems reviewed next. They are called “mini split” because both outdoor and indoor units are smaller.
How mini split systems work: Systems are comprised of an outdoor unit that serves up to 8 indoor units. When heating, refrigerant in the outdoor unit collects heat from outside air. Hot refrigerant then is circulated to the indoor unit where it enters a coil where the heat is released. A blower in the indoor unit disperses the heat.
Our Mini Split AC and Heat Pump Guide is comprehensive. It contains pros, cons, costs and cost factors, top brands and links to the many brands we have individually reviewed.
Why mini split heat pumps are so efficient: These systems don’t create heat but rather collect and move it with refrigerant. Secondly, they use inverter technology that adjusts heating and cooling capacity very precisely, so there is no over-heating or over-cooling.
No treated air is wasted by leaking from ducts, since they are part of most systems. Finally, mini split heat pumps require a very small amount of electricity to run
Most efficient: Today’s most efficient mini split heat pumps have EER ratings close to 20 or slightly above. The most recent list of Most Efficient Heat Pumps certified by Energy Star shows brands and models.
Pros and cons: Mini splits offer impressive efficiency at much lower costs than geothermal heat. Cons include the higher cost of installation for multi-zone systems. Each indoor unit is a separate and costly installation. That makes total costs higher than for ducted split systems with a single indoor unit that moves air to all rooms.
Ductless heat pump cost: $3,000 to $12,000 based on the size of the heat pump and how many indoor units are included.
Mini split heat pumps are most cost-effective in hot and warm climates. Newer units are effectively in very cold weather too, not requiring electric backup heat. But cold-climate heat pumps remain quite expensive.
Standard Split Heat Pump System
These air-source heat pumps remain the most affordable and most popular, though the market isn’t growing as fast for them as for the other types. They are taking market share from AC and gas furnace combinations because they can be used in colder climates than previous generations.
Our Heat Pump Buying Guide has pros and cons, feature options, heat pump costs and cost factors and information on how to select the right heat pump efficiency for your climate. There are links to our brand reviews of Mitsubishi, Fujitsu, Gree, Daikin, Pioneer and more plus our Best Mini Split Systems 2018 Guide.
How split heat pump systems work: Standard heat pumps circulate refrigerant between an outdoor unit and an indoor unit. The indoor unit is usually an air handler, but a gas furnace can be used too.
In winter, heat is gathered outdoors and released indoors. The opposite occurs in summer. Heated and air conditioned air is circulated via ductwork by a blower in the air handler or furnace.
Why split system heat pumps are so efficient: Like other heat pump types, heat is gathered and moved from one place to another. Just a small amount of power is needed to circulate the refrigerant that carries the heat. Inverter compressors in variable-capacity units are making heat pumps even more efficient, and some new units are able to provide sufficient heat in temperatures well below freezing.
Most efficient: The top current efficiency is about 15 EER, so less than both mini split and geothermal.
Pros and cons: While most systems are less efficient than geothermal and mini splits, standard heat pumps cost less too. They’re a very good value, especially when compared with gas furnaces and boiler systems. Top efficiency ratings go up every year.
Split heat pump system cost: $2,300 to $6,300. Unit size, efficiency, performance and installation factors affect cost.
These efficient home heating systems offer good value in the hottest climates to climates with cool winters.
More than 50% of homes still heat with a gas furnace, an impressive number when considering the more efficient heating systems available.
Our Gas Furnace Prices List and Buyer’s Guide has a wealth of information about furnace prices, pros and cons and choosing one that meets your home’s need for efficient heating. There are links to the many brand reviews (Lennox, Trane, Carrier, Goodman, Daikin, etc.) we’ve completed.
How gas furnace systems work: Natural gas or propane is burned to create heat. As the hot combustion gases exit the furnace through the sealed exhaust, they pass through one or two heat exchangers. Heat, but not combustion gas, is transferred to air circulated by the blower fan over the heat exchangers and through the ducts.
Dual fuel heat pump systems contain a gas furnace and heat pump. They are designed for very cold climates. The furnace is only used in freezing temperatures too cold for the heat pump to be effective.
Why gas furnaces are so efficient: Variable-capacity gas valves, explained in our Furnace Guide, secondary heat exchangers and variable-speed blowers combine to produce very efficient heating.
Most efficient: The best gas furnaces have AFUE heating efficiency ratings of 95% to more than 98%.
Pros and cons: The advantages of efficient gas furnaces are a lower cost than heat pumps and the very good indoor comfort they provide.
The disadvantage is that operating costs for the most efficient furnaces can be two to three times higher than for the most efficient gas furnaces. While efficiency is the same as gas boilers, some heat is leaked out of the ductwork. This means operating cost for gas furnaces is higher
Gas furnace cost: Energy Star certified gas furnaces have an installed cost of $2,800 to $4,500.
A gas furnace is a good choice if you want an affordable heating solution that will cut heating costs when replacing an old furnace.
Gas Fired Boiler
Boilers aren’t as popular in the US as they once were, but they can provide comfortable, fairly efficient heating.
As with the other systems, we have created a Gas & Oil Boiler Guide. It describes boiler system types, top brands and reviews, prices and how to select the right size boiler for your home. There are links to our reviews of top brands like Buderus, Carrier, Bosch, LAARs, Weil-McClain, Peerless and others.
How a boiler system works: Natural gas or propane is burned to heat water. Two primary distribution systems are used. The first circulates water to radiators that can be opened or closed for zoned heating. The second is to circulate the hot water radiant floor piping, allowing heat to radiate up and into living space.
Combination boilers, called combi boilers, create enough hot water to heat your home and provide domestic hot water.
Why boilers are so efficient: Condensing boilers use a secondary heat exchanger to take better advantage of the heat created.
Most efficient: Condensing boilers have AFUE ratings of 90% to 98%, about equal to gas furnaces. This list of Energy Star Most Efficient boilers includes brands and models.
Pros and cons: Radiant heat is comfortable heat and easy to zone. Boilers are quiet. Since they don’t use ductwork and forced air, allergens aren’t blown around the house.
Boiler systems cost more than gas furnace systems for the equipment and repairs. They have higher operating costs than heat pump systems.
Gas boiler cost: $3,000 to $9,700
If your home has a boiler, replacing it with a boiler is most cost-effective. They are a good choice for additions when a radiant floor system is installed.
The table below is based on heating a 2,000 square foot home in Zone 5.
If you live in Zone 1, 2, 3 or 4, annual heating cost will be lower. In Zones 6 and 7, cost will be higher.
There are many factors that determine what is the most cost efficient way to heat a home. For pure efficiency, geothermal is tops, but installation is very expensive. If you plan to live in your home long-term, then geothermal is worth considering.
For shorter use – 5 to 15 years, then a mini split or standard heat pump is a great choice.
For low-cost, efficient heating, an Energy Star gas furnace is the best choice. And if you already have a boiler or are building a small addition and like the idea of in-floor heating, a boiler makes the space very cozy. Boiler systems are also recommended for those with allergies or asthma bothered by forced air systems.
If you’re ready to get estimates on one or two system types, our Free Local Quote system makes it fast and convenient. There is no cost or obligation. The contractors are pre-screened to be licensed, insured and experienced.
If you prefer to research your options more, our guides to the systems you want to explore is a great next step.
Also interested in the most efficient cooling system, read our guide for most efficient air conditioner here.