Did you know upgrading to a high-efficiency gas furnace could save you up to 25% on your heating bills? With energy prices climbing, a new furnace can save you money and do a better job at heating your home. At Watkins, we’re all about helping homeowners understand their options. So, let’s dive into what AFUE ratings mean, how they help with your home’s energy costs, and how to pick the perfect gas furnace for your home.

Quick note: Here we’re focusing on furnaces that use propane or natural gas as their fuel source. Curious about oil furnaces? Check out our oil furnace page for more on that fuel source.

What Is an AFUE Rating?

Ever wondered how efficiently your gas furnace turns natural gas into cozy warmth for your home? That’s where the Annual Fuel Utilization Efficiency (AFUE) rating comes in. AFUE is a percentage that tells us how well your furnace converts fuel into usable heat for your home. For example, a 95 AFUE furnace transforms 95% of the energy in natural gas into heat for your home, with just 5% waste as exhaust gases escaping through the vent pipe.

Imagine handing your furnace $100 worth of gas or propane. A low-efficiency 70% AFUE furnace gives you $70 worth of heat, while $30 sneaks up the chimney and is lost forever. A standard-efficiency 80% AFUE gas furnace delivers $80 of heat with $20 of waste, etc. The metal vent pipe is too hot to touch because so much heat energy is escaping up the chimney. It’s like you’re burning 20 dollar bills.

Choosing high-efficiency ratings, like 95% AFUE, gives you much less wasted fuel, lower utility bills, and a smaller environmental footprint. If you live in a cold climate like Ohio, upgrading from an 80 AFUE to a 95 AFUE gas furnace can save you hundreds of dollars in energy costs each year.

Can A High Efficiency Gas Furnace Lower My Utility Bill?

The amount you can save with a high-efficiency furnace depends on how bad your current system is. Switching from a low-efficiency gas furnace to an energy-efficient gas furnace will put some serious money back in your pocket. However, the difference between a 95% and a 97% is so small, you won’t even notice the change. Savings depend on your home’s size, local gas prices (either natural gas or propane), and the AFUE jump from your current setup to the new rating. In Ohio’s climate, a 95 AFUE gas furnace could save around $500 per year on heating costs compared to an 80 AFUE model. We built this calculator to estimate how much money a high-efficiency furnace can save you based on your house size, gas prices, and old vs. new efficiency rating:

This calculator estimates savings for natural gas furnaces based on ten-year average climate data in Dayton, OH. Depending on your current contract, typical natural gas prices range between $0.70 – $1.30 per CCF, including variable delivery charges. To shop for better gas rates, check out the State of Ohio’s site. Savings vary based on factors like insulation, duct efficiency, and home design. For precise furnace savings, consult an HVAC professional.

How to Tell if You Already Have a High Efficiency Furnace

Trying to figure out if the gas furnace in your home is a high-efficiency model? Let’s figure it out with some easy checks. If you’re a handy homeowner, grab a flashlight and take a peek at your gas furnace.

Here’s what to look for:

• Low-Efficiency Furnaces (60-70% AFUE): Anything less than 80% AFUE is considered low-efficiency. These older furnaces, unlike modern gas furnaces, often have a draft diverter (a metal piece where exhaust exits as pictured below) and no inducer motor. You might spot a ribbon burner (a long tube with blue flames along the full length as pictured below) and a pilot light that’s always on, burning a bit of gas year round. In addition, these units draft conditioned air from your home through the heat exchanger and into the chimney, further wasting energy. If this sounds like your setup, your furnace efficiency is likely in the 60-70% range.

• Standard-Efficiency Furnaces (80% AFUE): 80% AFUE is considered standard-efficiency. Compared to low-efficiency furnaces, these have a more restrictive heat exchanger (that’s a good thing). This keeps the hot gases from immediately escaping up the chimney, giving us time to extract more heat into the home. Tighter heat exchangers don’t draft naturally, so we use a draft inducer motor (a small fan that starts before the furnace fires up) to pull the flue gases through the heat exchanger. 80% AFUE furnaces still have a metal flue pipe, but the flue temperatures are much lower. Spark ignition systems or hot surface ignitors light the main burner rather than a standing pilot. Check for inshot burners (small, focused flames like a blow torch) as pictured below. If you’ve got a metal flue and an inducer motor, your gas furnace likely has an 80% efficiency rating.

• High-Efficiency Furnaces (90%+ AFUE): 90% AFUE or higher is considered high-efficiency. These energy efficient gas furnaces use a secondary heat exchanger to recycle the hot flue gas to grab all the extra heat it can. This secondary heat exchanger lowers the flue gas temperature below the boiling point of water (burning any carbon fuel releases water vapor). As the gases cool, moisture begins to condense—hence the name “condensing furnace.” The condensing water vapor would rust out a metal flue pipe, so we use a plastic PVC flue pipe, as the flue gas typically stays below 100°F. You’ll also see a plastic draft inducer and drainage system to deal with the condensate water produced. If your unit has a plastic flue pipe, it is 90% AFUE or higher. 95-97% AFUE furnaces have these same parts, but come with even more advanced technology to extract every last little bit of heat. Those are what we consider “ultra efficient” systems.

Will a High Efficiency Gas Furnace Heat My Home Better?

AFUE ratings tell us a furnace’s input (how much gas it burns), not output (how much it heats your home). The furnace size in BTUs tell us output. This may seem backwards, but it means that a 100,000 BTU gas furnace with an 80% AFUE rating outputs around 80,000 BTU while an 80,000 BTU furnace with a 95% rating produces around 76,000 BTUs. Therefore, an increase in furnace efficiency doesn’t automatically heat your home better.

However, new high-efficiency furnaces come with other upgrades in technology. And upgrading from a low to high-efficiency furnace usually requires upgrades to your home’s duct system to handle the extra heat output or your new system will overheat. So, upgrading to a high-efficiency furnace often leads to a more comfortable, better-heated home because of the advanced features and home updates these furnaces require.

It’s important to remember that bigger is not always better when upgrading your furnace. In addition to a heat-load calculation to determine the best furnace size for your home, a professional HVAC contractor will also assess the ductwork to find the CFM capacity. Also, consider a two-stage unit since you only need max heat a couple weeks out of the year.

What’s Required to Upgrade to a High Efficiency Gas Furnace?

Upgrading from a standard-efficiency (80% AFUE) gas furnace to a high-efficiency (90% AFUE) model requires a few changes. You’ll need a PVC vent pipe instead of the old metal flue because these furnaces produce cooler exhaust gases that condense water. In an open basement or a single-story patio home, running a new PVC vent shouldn’t be a big deal. With a finished basement, it’s often difficult to find room for the new vent without significant drywall work.

In addition to a new PVC vent, a 90+ gas furnace will need a place to drain condensate water. If you have a nearby floor drain, you’re all set. If your gas furnace is in an unconditioned space like an attic, it’s likely not possible to upgrade to high-efficiency. In the winter, the drain would freeze and burst, shutting down the furnace and causing water damage. As always, it’s best get a professional to look at your specific situation.

Condensing vs. Non-Condensing Furnaces

For HVAC guys, “condensing” is another way of saying High Efficiency. Condensing furnaces capture so much energy that the flue gas temperature drops to 80-100°F, causing water vapor to condense. This is why they require a plastic PVC vent pipe and drainage system. Condensing furnaces shine because they save fuel and cut emissions, making them a top pick for homeowners.

Non-condensing furnaces (80 AFUE) may waste a lot of energy, but they are simple, cheap, and work with existing metal chimneys. We design their vent systems to keep the flue gases above the boiling point of water so the vent pipe doesn’t drip or rust. A little trivia – you won’t find 85%AFUE because the flue gas would be too hot for PVC venting but too moist for a metal vent.

There’s More to Gas Furnace Efficiency Than AFUE

You’ve probably noticed that two furnaces with the same 95% AFUE rating can have dramatically different price tags—and for good reason. A basic 96% AFUE single stage furnace might cost $3,800 while a premium model runs $6,000+. While they may have the same AFUE, the total utility bill will be very different.

AFUE (Annual Fuel Utilization Efficiency) only tells you how much of the fuel’s energy is turned into heat versus lost up the flue. It doesn’t account for features that affect your real-world energy use, like:

• Two-Stage or Modulating Burners: These let the heating system ramp down when your house needs less heat, reducing on/off cycling and saving fuel (especially in milder weather). Think more warm air when you need it most.
• Variable-Speed Technology: Variable speed blowers keep airflow steady and improve comfort—but they also draw less electricity than a simple single-speed motor. In addition, you’ll notice much better humidity control in the summer (your cooling equipment uses the furnace fan to move air across the A/C coil and through the ducts).

When you compare “95% AFUE” models, look beyond the percentage and consider how staging, variable-speed motors, smart thermostats, and air quality accessories will affect both your gas and electric usage, in addition to your comfort level. That’s the key to choosing the right furnace for your home and family.

What’s the next step in choosing an energy efficient heating and cooling system for your home?

Click here to check out our replacement cost calculator and get some budget ideas without a sales call.

Or click here to explore different Trane furnace models.

When you’re ready, reach out below or give us a call at (937) 748-0220 to setup a free no-pressure home assessment with one of our experienced professionals. You’ll be glad you did!

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