Furnaces come in various designs and can be broadly categorized into two main types: electric and gas. Gas furnaces run on natural gas, while electric ones are powered by electricity. Continue reading High-Efficiency Furnace Guide.

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Maybe you’ve heard about high-efficiency furnaces and wonder if your current furnace deserves the title.
This guide discusses high-efficiency furnaces and why owning one is worthwhile.
What is a High-Efficiency Furnace?
All furnaces perform the same job; however, their efficiency varies. High-efficiency furnaces, also called condensing furnaces, have AFUE ratings of 90%-100%. AFUE represents Annual Fuel Utilization Efficiency and is the standard unit for measuring furnace efficiency.
In other words, high-efficiency furnaces are those that direct at least 90 percent of the heat generated toward warming your home.
Generally, electric furnaces are highly energy-efficient because they convert electrical energy into heat, which is then used to heat the building with no waste. Thus, electric furnaces have a 100% AFUE and are labeled high-efficiency devices.
On the other hand, gas furnaces may be high-efficiency or standard-efficiency. A high-efficiency gas furnace has an AFUE rating of 90% to 98%. Unlike their electric counterparts, gas furnaces are not 100% efficient. Nonetheless, with an AFUE rating of 90% or higher, a gas furnace is considered high-efficiency.
For the purposes of this article, our discussion and analysis of furnace efficiency will focus on gas furnaces, as electric furnaces are 100% efficient by default.
How is Furnace Efficiency Measured?
The efficiency of a furnace is measured by comparing the amount of heat generated to the actual amount of heat that goes into heating your home. This value is measured in AFUE and can range from 0% to 100%.
For instance, if your furnace has an 80 percent AFUE rating, that means only 80 percent of the energy your money pays for actually goes into heating your home. The remaining 20 percent is lost to exhaust during machine operation. As a result, for every dollar spent on a gas furnace to heat your home, you get a service value equivalent to 80 cents.
It’s worth noting that a furnace’s heating efficiency is also measured in BTU (British Thermal Unit). One BTU is the amount of heat required to raise the temperature of 1 pound of water by 1°F.

How Does a High-Efficiency Furnace Work?
Condensing or high-efficiency furnaces feature design features that make them more efficient than conventional furnaces. In addition, high-efficiency furnaces include a secondary heat exchanger that recycles unused heat and returns it to the building rather than releasing it as waste.
After recycling, only a fraction of the initial waste is eventually exhausted, thus boosting the system’s efficiency. Unfortunately, standard furnace models lack a secondary heat exchanger, so they cannot recycle the initial waste and, thus, aren’t as efficient.
The availability of a secondary heat exchanger in high-efficiency gas furnaces helps improve energy efficiency, as most unused energy is redirected toward heating the home rather than being wasted.
Standard Efficiency vs. High-Efficiency Gas Furnaces
Regardless of design, gas furnaces can be categorized as standard or high-efficiency. Standard-efficiency furnaces have AFUE ratings below 90 percent (typically around 80 percent), while high-efficiency models have ratings of 90 percent or higher.
The efficiency of a furnace is its ability to produce warm air that’s used in heating our buildings, versus the quantity that ends up exhausted as waste. In other words, a high-efficiency furnace will convert more chemical energy into heat energy and use at least 90% of the energy to warm your home, thus minimizing energy loss.
As a result, a condensing furnace will consume less fuel to effectively keep your home warm during winter as compared to a standard furnace. The overall impact of the energy-saving ability of a condensing furnace will be seen on your fuel bill, as you will tend to consume less fuel.

Does a Gas Furnace Produce Waste?
Gas furnaces emit liquid vapor containing carbon dioxide and carbon monoxide as the main byproducts of heat exchange. However, other substances, such as nitrogen gas and slag, are also produced in microquantities.
It’s important to ensure the furnace is properly vented so waste gases can exit the building. Poor furnace venting allows combustion byproducts to enter your home and contaminate the air, leading to health issues such as headaches, nausea, dizziness, and fatigue.
Generally, there are two ways your gas furnace can be vented:
- Through a metal that extends vertically upward and beyond the roof.
- Through PVC piping that’s extended horizontally outside the house.
Nonetheless, whether vertical or horizontal design, it’s best to use direct venting for greater efficiency and safety. Direct venting involves having two sealed pipes: one that brings fresh air from the outside and another that conveys waste gases from the furnace to the outside air.
Which Furnace Heats Better: Gas or Electric?
In terms of operational value, a gas furnace beats an electric one in many ways. First, gas furnaces can heat your home in a fraction of the time it takes an electric furnace. Second, the heat produced by gas models is generally hotter than that of their electric counterparts. As a result, you can warm your home more quickly and efficiently with gas systems, especially if you live in very cold climates. When evaluating electric furnace efficiency versus gas options, it’s essential to consider not only heating speed but also the long-term energy costs of each system. Homeowners in regions with fluctuating energy prices may find that gas models are more cost-effective over time. Moreover, technological advancements are continuously improving electric options, making the decision process even more complex, as both types offer unique benefits and considerations.
Electric furnaces can direct all the energy generated toward heating your home, so they’re technically more efficient than gas systems. However, because they require more energy to operate, they tend to be more expensive to run.
Electric furnaces typically work like a hair dryer. They feature a heat exchanger that primarily pulls air into the system. The air in the system is heated by high-resistivity electric heating elements, and the resulting warm air is circulated into the home by a heat pump.
One of the core advantages of electric furnaces over gas systems is that they provide both heating and cooling in a single unit, making them useful in both cold and hot months. Gas systems can only heat your home and will be practically non-functional during the summer.

What Is the Environmental Impact of Gas Furnaces?
When natural gas burns, it produces fewer air pollutants than coal or petroleum, which is why it’s considered a relatively clean-burning fossil fuel.
Gas furnaces usually run on natural gas, so they tend to be environmentally friendly, especially when you operate high-efficiency models.
Although it’s easy to think electric heating systems are the most environmentally friendly models since they do not require combustion. However, when you factor in the source of electricity, which is primarily dirty and environmentally unfriendly, you’d realize that gas furnaces have the least environmental impact.
It’s important to note that the upfront cost of a high-efficiency furnace is typically higher, as it is with most green appliances. You can also install an outdoor high-efficiency heat pump to complement your gas system and deliver a greener heating solution. (ASHP) An air-source heat pump transfers heat from the outside air to the indoor space.
How Does a High-Efficiency Furnace Save Me Money?

A high-efficiency furnace can help you save money. When discussing long-term cost savings, a high-efficiency furnace is the ideal upgrade.
The time it takes to recoup your investment depends mainly on usage frequency, your system’s high AFUE rating, and the environment in which you will use the furnace.
Generally speaking, the more you use your high-efficiency heating system, the more it saves on running costs. Operating a 95% efficient system can save up to $47.36 per $100, according to the Department of Energy (DOE). Also, if you’re in very cold regions, you’ll need to set your thermostat to a higher temperature (e.g., 80 degrees). Thus, it will take less time to break even on your investment if your AFUE rating is high than if you set the thermostat at 65 degrees in moderately cold climates.
Areas with very cold climates will find that high-efficiency furnaces make more financial sense, as they can break even in under 6 years. If long-term cost savings are your priority, switching to a condensing furnace is a perfect fit.
How Much Does a Furnace Replacement Cost?
The price of a furnace replacement depends on the brand, efficiency rating, and whether it includes additional services. Such as installation fees, ductwork or ventilation modification, etc.
The prices below include the furnace installation fee but not the ductwork or ventilation modification fee.
Standard Efficiency Furnace (~80%) Pricing:
- Single-stage: $3,000 – $4,000
- Two-stage: $3,700 – $5,500
- Modulating (variable-speed): $4,000 – $5,500
High-efficiency Furnace (90%+):
- Single-stage: $3,400 – $4,950
- Two-stage: $4,000 – $6,500
- Modulating (variable-speed): $6,000 – $7,500
What Next?
Not quite sure whether you should make the switch? Have questions or concerns about high-efficiency furnaces? We’re here to help! Determining furnace size for homes is crucial for optimal heating efficiency and comfort. A properly sized furnace ensures that your home stays warm without wasting energy or incurring unnecessary costs. If you’re unsure about the best size for your space, consulting with a professional can provide clarity and peace of mind.
As a top-rated heating company in Denver, we understand that switching to a condensing furnace can be quite an investment, so we want to ensure you’re absolutely confident that it’s the right decision whether you need a furnace repair or replacement. Reach out to JD’s Plumbing Heating and Air Conditioning today for knowledge and experience-driven advice.

