Source: AdobeStockSource: AdobeStockAnnualized fuel utilization efficiency (AFUE) is a measure of energy efficiency for furnaces. Expressed as a percentage, AFUE compares the amount of output energy to the amount of input energy over a typical one-year period. A more efficient furnace converts more of the energy it uses into heat for the home. The Federal Trade Commission requires the AFUE to be clearly labeled on all new furnaces for easy comparison of the heating efficiencies of different models and brands. A higher AFUE indicates greater efficiency.

The Department of Energy (DOE) established a minimum AFUE of 78% for residential furnaces, meaning 78% of the energy consumed during operation heats the home rather than escaping. Today's most energy-efficient furnaces, however, have AFUE ratings in the more than 90% range, which means very little energy is wasted.

All-electric furnaces tend to have higher AFUE (95% to 100%) than gas-powered versions because no heat is lost through a chimney. The higher cost of electricity compared to natural gas in many places, however, can offset the energy-savings and make them less economical.

Efficiency beyond AFUE

Many factors contribute to the overall efficiency of a furnace beyond what is measured by the AFUE and should be addressed throughout the furnace's life to keep it functioning safely and properly.

Condition and location of ductwork

Furnaces heat air and distribute the heated air throughout the house via air ducts. AFUE doesn't account for heat losses that occur from leaks in ductwork or from ductwork located in an attic, garage or crawlspace that is either partially heated or unheated. This type of energy loss can be as much as 35% of the furnace's energy output.


AFUE applies only to new systems. Regular professional maintenance is necessary to preserve efficiency and may also be required to keep the warranty in force. When evaluating an older furnace, consider how well it has been maintained and its age in addition to the AFUE. Maintenance should include:

  • Inspecting all parts of the system, including the venting connection, to check for wear and tear
  • Testing for carbon monoxide leaks and preventing combustion gases from mixing with house air
  • Adjusting the controls to ensure the optimum temperature for comfort and efficiency
  • Cleaning the blower, and removing soot, dirt and corrosion from the furnace
  • Replacing the air filter (this should also be done by the homeowner every one to three months)
  • Sealing the connection between the furnace and the main ducts
  • Checking the fuel input and the flame characteristics, and making adjustments
  • Performing any needed repairs


Properly sizing the furnace greatly affects its efficiency, lifespan and ability to maintain even comfort throughout the home. A system that is too large will not heat the home faster or better. Likewise, a system that is too small will not be less expensive to operate. In both cases, the furnace will have to work harder to maintain the set temperature resulting in hot or cold spots, more wear and tear, and a shorter lifespan.

An HVAC professional can do an accurate load calculation that takes into account multiple characteristics of the home, such as the amount of insulation, the number of windows, the home's orientation, the number of levels, the layout, the square footage and even the family's lifestyle.

Equipment features

A system's features also contribute to its efficiency — or lack of efficiency. The DOE breaks them out as follows:

Old, low-efficiency heating systems

  • Natural draft that creates a flow of combustion gases
  • Continuous pilot light
  • Heavy heat exchanger
  • 56% to 70% AFUE

Mid-efficiency heating systems

  • Exhaust fan controls the flow of combustion air and combustion gases more precisely
  • Electronic ignition (no pilot light)
  • Compact size and lighter weight to reduce cycling losses
  • Small-diameter flue pipe
  • 80% to 83% AFUE

High-efficiency heating systems

  • Condensing flue gases in a second heat exchanger for extra efficiency
  • Sealed combustion
  • 90% to 98.5% AFUE

Heating makes up a substantial portion, about 45%, of the average American family’s energy bills. When choosing a new furnace, consider efficiency as well as the sticker price. The energy savings over the life of the system can greatly offset the higher initial investment. Rebates may also be available for high-efficiency furnaces.

Learn about the energy efficiency rating for air conditioners here.