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The TRUTH About Furnace (and AC) Energy Efficiency

How energy efficient does your furnace really need to be? Obviously a more energy efficient furnace is generally better, but the most efficient units tend to cost considerably more. Is it worth it?

Should you buy a high-efficiency furnace? Is it worth the investment? The answer is – it depends. In most cases, the answer is yes, especially if your current system is older than 15 years. But there are a few factors worth considering to determine how efficient of a new furnace or A/C you should purchase.

Here are 7 things to consider when determining what level of energy efficiency you need:

1. Are you upgrading or replacing an older system?

Older systems tended to be much less energy efficient, and their efficiency is likely to have worsened, at least somewhat, over time. A brand new high-efficiency gas furnace is likely to cut your heating bills a least a little, and possibly a lot… up to 35+ % in some cases.

So upgrading to a new furnace or central air conditioner can certainly be a good investment, especially if you need one anyway because your current one requires costly repairs or is giving you frequent problems.

So if you’re in the market for a new furnace or A/C, it’s pretty obvious that the higher the efficiency rating, the less gas or electricity it will consume, saving you money in the long-run and helping you recoup your investment. However the most energy-efficient, higher end models tend to cost a bit more, so the question is whether the extra upfront expense is worth it.

Just how efficient of a system do you really need?

2. How long do you plan on staying in your home?

In general, it’s a good idea to opt for a more energy efficient system (at least 95% AFUE in the case of a furnace, and at least 16 SEER for an A/C). This will help not only while you remain in your home, but it’s also a good investment in the overall value of your home… just like installing high-end appliances in your kitchen after a remodeling, it never hurts to be able to show potential home buyers that you didn’t opt for the lowest quality items and finishes.

That being said, if you plan on moving in the next couple years, springing for the top-of-the-line unit and shelling out an extra $1000 – $2000+ for that extra few percent of energy efficiency is probably not absolutely necessary.

3. The law of diminishing returns

The top of the line units tend to cost quite a bit more, and may only offer relatively modest savings in long-term operating costs.

The difference in price between a 95% or 96% AFUE furnace and a 98% one may be several hundred dollars or more, but it will likely take years to make up that difference in energy savings, if ever.

And this may be even truer in the case of central air conditioners – given the temperate Canadian climate – it’s unlikely that a unit beyond 20 SEER will be a worthwhile investment. Leave those A/Cs models to the Floridians.

However! It’s important to note that the best furnace and A/C models often have many other benefits beyond their energy-efficiency. They may include features that help keep your home’s temperature more consistent, they may be quieter, more durable, and have better warranty coverage.

The point is simply that you shouldn’t make your buying decision based on the efficiency rating alone.

To summarize, we generally advise that you choose a higher-efficiency furnace or A/C (at least 95% AFUE for furnaces and at least 16 SEER for air conditioners), but there tends to be diminishing returns from a purely efficiency & operating cost standpoint.

4. Being more environmentally-friendly

Furthermore, more energy-efficient heating & cooling systems not only can save your pocket book, but they will also pollute less as they consume less natural gas or propane and use less electricity. This is obviously better for the environment, and hey, call me a hippie but that’s something worth considering too!

5. Carbon taxes

Speaking of the environment and your pocketbook, with the provincial and/or federal governments implementing a carbon tax, there is no better time to invest in more energy-efficient heating and air conditioning systems to help further minimize your utility bills.

This is not meant to be an argument for or against the carbon tax (this isn’t the place for political discussions!), but it’s worth taking into account nonetheless.

6. Qualifying for rebates

Another important consideration when it comes to choosing what furnace or A/C energy-efficiency rating suits your needs, is whether your new system will qualify for government and utility company rebates.

In areas where rebates are available, one of the primary requirements is usually that your new system must be high-efficiency, as that’s kind of the whole point of the rebates – to encourage people to opt for less wasteful appliances and home upgrades.

In most cases, you will have to purchase an ENERGY STAR-rated model to qualify. Note there are often other criteria, so make sure you do your research ahead of time (see link above) and opt for an established local contractor that is registered to offer rebates.

7. Is your new furnace or A/C as efficient as advertised?

Believe it or not, in some cases the your brand new heating or cooling system’s efficiency may not be what you think it is.

For example, when most people think of a central air conditioner, they think of the large unit sitting outside their home. However, the air conditioning system is actually comprised of two major components – the condenser coil (the outside part) AND the evaporator coil, which actually sits indoors, above the furnace.

The evaporator coil (indoor part) basically absorbs heat from the air inside your home, which causes the refrigerant in the tubing to expand, at which point they are circulated to the outdoor unit where they release the heat, the gasses condense back into liquid form (hence the name ‘condenser unit’), and the cycle begins anew.

If this indoor coil is not correctly sized and matched to the outdoor unit, this can cause a number of problems over time, including lowering the efficiency rating.

It can also make your new air conditioner less effective, reduce its lifespan and cause technical issues, and potentially void your warranty.

This is why it’s important to be conscious of the fact that like with any contracting job, you often get what you pay for, so it’s not always advisable to go with the absolute lowest price you can find. If a price seems to good to be true, you might make up for it in other ways!

See: The Truth About Furnace & A/C Pricing

It’s also why it’s worth choosing a trusted and dependable heating & cooling contractor, like our Certified Partners (learn more about our certification program).

These are by no means the only good companies out there, but hey, we think they’re pretty good, and other customers seem to think so also!

Other articles by Simon:

The Truth about Furnace & AC Reliability - Read Now
The Truth about Furnace & AC Reviews - Read Now
The Truth about Furnace & AC Pricing - Read Now
The Truth about HVAC Contractor Reviews - Read Now

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