Furnaces are rated by the Annual Fuel Utilization Efficiency (AFUE) ratio, which is the percent of heat produced for every dollar of fuel consumed, or how efficiently a furnace converts gas into heating energy. Its AFUE rating is measured as a percentage.
Like the miles-per-gallon rating on your automobile, the higher the AFUE rating, the lower your fuel costs. An AFUE of 90% means that 90% of the energy in the fuel becomes heat for the home and the other 10% escapes up the chimney and elsewhere. According to the EPA- AFUE doesn't include the heat losses of the duct system or piping, which can be as much as 35% of the energy for output of the furnace when ducts are located in the attic, garage, or other partially conditioned or unconditioned space. All furnaces manufactured today must meet at least 80% AFUE in the south and 90% AFUE in the North. If your furnace is 10 – 15 years old, it very well may fall below the current furnace minimum and waste energy- costing you money.
When shopping for high-efficiency furnaces and boilers, look for the ENERGY STAR label. If you live in a cold climate, it usually makes sense to invest in the highest-efficiency system. In milder climates with lower annual heating costs, the extra investment required to go from 80% to 90% to 95% efficiency may be hard to justify.
This doesn’t mean that you should only select a furnace based on its AFUE rating. The efficiency rating is just one factor to consider when looking for a new furnace.