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Will a High-Efficiency Gas Furnace Save You Money?

Can high-efficiency gas furnaces save money on your fuel bills over standard-efficiency ones? We examine the pros and cons.

Will a High-Efficiency Gas Furnace Save You Money?

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Matt Reed


Matt Reed


October 13th, 2021

“Will a high-efficiency furnace save me money?”

Here at Fire & Ice, we hear that question a lot when we visit homes. Homeowners in the market for a new furnace might be looking at their gas bill and wondering if an investment in a high-efficiency gas furnace might make a huge difference.

It’s a good question that doesn’t have a straightforward answer. There’s no question that a high-efficiency furnace will perform better than a standard-efficiency one. But we don’t always recommend ditching your old furnace for a high-efficiency one.

This article will look at high-efficiency gas furnaces and compare them to standard-efficiency ones. We’ll also take a look at factors that affect your gas bill, and help you decide whether switching to a high-efficiency model is worth the price.


Your Gas Furnace Is Only One Part of Your Bill

Gas in HVAC is misunderstood because most people think that their furnace’s use of gas is the majority of the bill. Why is your gas bill so high? Maybe you have three kids who think that hot water is free.

When we talk to homeowners about that, it’s an epiphany because what folks believe is that we’re going to come in and change their entire gas bill. They think, “If I get a high-efficiency furnace, will my gas bill go way down?” Our answer is, “Probably not.”

The easiest way to figure out how much gas your furnace uses is to compare your gas bill in the summer vs. what it is in the winter. Whatever it is in the summer, that portion of the bill continues into the winter. That’s water usage, cooking, that sort of thing. (If you have a gas fireplace, you’ll need to account for that in your winter bill as well.)

Let’s say your gas bill is $100. What is it during the summer? If it’s $50, then we’re talking only $50 in the winter. And part of that is going to be fees and taxes.

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Why Is Your Gas Bill So High?

Can you blame it on your furnace? Maybe. But it may not be due to the efficiency of the furnace. It may be the way it’s being used. If in the winter you like it at 75 degrees indoors, it doesn’t matter how efficient your furnace is. You’re going to be using a lot of gas.

Other Gas Bill Factors Include:

  • How much do you cook?
  • How much hot water do you use?
  • Do you have a gas fireplace, and how often do you use it?
  • Do you like the house warm in the winter?
  • How good is your insulation?
  • How good are your windows?
  • Does your house have vaulted ceilings? (Remember, hot air rises)
  • Do you use weatherstripping?
  • What’s the weather like? Some winters are cold, and some are like spring. If you bought a high-efficiency furnace and get a harsh winter, your gas bill will probably go up.
  • Are you home more and thus setting the thermostat higher than normal? COVID-19 has forced a lot more of the working force to spend their days at home rather than at the office.
  • Are you on a budget system with the gas company? If so, there’s no way to figure out how much you’ll save.


The Two Types of Gas Furnaces Are:

1) Standard efficiency

2) High efficiency

High-efficiency furnaces have a secondary heat exchanger. The furnace creates heat, recycles what it doesn’t use, and uses the waste in a secondary heat exchanger, then finally exhausts what is left.

Standard-efficiency models use the heat and exhaust the rest because they lack the second heat exchanger.

Functionally they will do the same thing; each can come equipped with a variable-speed blower, a two-speed, or a fixed speed. The difference is how many BTUs you need to do the job.

The best high-efficiency furnaces are up to 97% efficient, whereas a standard efficiency is 80%. In an 80% furnace, 80% of the heat is being used, while 20% is being exhausted as waste.

Read more: A Guide to High-Efficiency Furnaces

How Is Efficiency Measured in Gas Furnaces?

Efficiency is measured by the ability of the furnace to produce warm air that is being used to heat your home, versus how much is being exhausted as waste. AFUE stands for Annual Fuel Utilization Efficiency. It is a measure of furnace efficiency. AFUE uses percentages (up to 100%) that signify how much usable heat is produced by a furnace.

An 80% AFUE for a gas furnace, for example, means the furnace puts out 80 BTUs of useful heat for every 100 BTUs of natural gas it burns.

(BTU stands for British Thermal Unit; one BTU refers to the amount of energy that’s required to increase the temperature of a pound of water by 1° F.)

No gas furnace is 100% efficient. The higher the number, the more efficient it is. To be considered high-efficiency, the rating needs to be between 90 and 97%.

The Trane XC95M, for instance, can get up to 97.3% efficiency. Those Trane models are going to be the most efficient to heat your house, not only by definition but also in actual savings. You will see a difference in your fuel bill when comparing an 80% furnace with a 97%.

Will you see a big difference in your bills between a 96% unit and a 97% one? No. But the lower-efficiency furnace will be cheaper to purchase.


Natural Gas Is Cheap, For Now

Natural gas is cheap in Worthington, Dublin, and other areas of Central Ohio. If you have a high gas bill, you’re either using gas a lot, which is your choice, or your house is not really tight. The windows may be single-paned and leaky. The insulation could be insufficient. You might have an uninsulated garage or crawl space. Maybe there’s an addition that isn’t being served by your ducts. No matter how much you heat that house, you’re losing that heat constantly.

The efficiency of the house might be improved more by new windows and new insulation rather than investing in a high-efficiency furnace.

The Initial Cost of High-Efficiency Furnaces

Here’s what a new high-efficiency furnace will cost:

  • Single-stage: $3,400 - $4,950
  • Two-stage: $4,300 - $6,550
  • Modulating (variable-speed): $6,250 - $7,600

This includes installation and related fees. It does not include ductwork or ventilation modification or indoor air quality add-ons, which won’t be a part of every installation.

And here’s what a standard-efficiency unit runs:

  • Single-stage: $3,000 - $4,100
  • Two-stage: $3,750 - $5,300
  • Modulating (variable-speed): $4,300 - $5,400


How Much Will a High-Efficiency Furnace Save You Monthly?

If everything stays exactly the same except for your furnace’s efficiency, we can do some math.

Let’s say you spend $150 a month on heating and cooling, and your current furnace is 80% efficient. If you upgrade to a high-efficiency furnace that’s 95% efficient, that translates to about $22.50 a month in savings (15% of $150) when your furnace is in use.

Let’s not forget, however, that your furnace will be in use about half of the year, with heavy use during winter, moderate use in spring and fall, and just the blower in summer. (Your heat pump/AC depends on the blower to move cool air around the house. Your furnace will be using only electricity to run.)

So that $22.50 a month will drop according to the seasons when you’re using less gas. Other factors include:

  • Is the furnace getting proper maintenance? We recommend two tune-ups a year: once in the fall, and once in the spring. If you skip some, the furnace will lose some efficiency. And the older it gets, even with great maintenance, the poorer it will perform.
  • Is the filter being changed regularly?
  • Modifications to the house will play a part. You might want an addition, or you could have rooms that are converted from one use to another, etc.
  • Is the price of gas stable? A spike might result in the owner choosing lower thermostat settings in the winter to save money.

If you spend an extra $1000 on a high-efficiency furnace, and it will take 8-10 years to recoup that cost, is it worth it?


Your Gas Bill Is a Comfort Concern

When we sit down with a homeowner who is thinking about a new furnace, we ask them if they feel that their gas bill is too high. If they say ‘no,’ recommending a standard-efficiency unit isn’t going to be an issue.

If they do think their gas bill is too high, it’s part of their comfort concerns, and we need to address it. We do have a partial solution to that problem: high efficiency. We can’t promise them that their bill is going to go down by 50%, but we can offer a solution that will make their bill less burdensome.

Anybody who’s getting a new system because their existing system is old, more than likely, their efficiency will increase. We will never be able to prove how much they saved in efficiency.

And some homeowners want to be as green as possible, regardless of the cost. In that case, we would recommend a high-efficiency unit.


Regular maintenance can help with costs. If the furnace is running the way that it should, it will certainly be more efficient. If it’s clogged up with dust and pet dander, it will suffer. Everything will do its job better if the parts are clean and performing like they did when it was brand new.


A dirty filter will restrict the air that goes into the furnace. That makes the furnace work harder, with a poorer result. Changing the filter helps the furnace (and the heat pump/air conditioner) function better. We recommend changing the filter when it’s due or simply when it’s filthy.

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Determining a Furnace’s Capacity

Sizing will make a difference when it comes to efficiency. If the furnace is sized too small, it will run and run, and up goes the bill. Too big, your unit will short cycle, which means it starts and stops more often. That will burn more gas than it needs to, as well. And it will never heat properly.

When a sales professional visits your home, they should perform a Manual J Load Calculation to determine the capacity needed in an HVAC system to heat and cool your home. The industry standards for these calculations are set by the Air Conditioning Contractors of America (ACCA). At Fire & Ice Heating and Air Conditioning, we always perform an ACCA-approved load calculation to ensure accurate sizing of your system.

This informs a homeowner of the capacity needed to service the home. The size of your house matters, but also things like the number and direction of the windows on the home, as well as dozens of other factors.

When we do a load calculation, we are concerned about comfort as well as creating a system that is running the way it’s supposed to, to be as efficient as possible. We want that 80% furnace to get as close to 80% as possible.

RELATED: Sizing Your Air Conditioner, Heat Pump, and Furnace

The most important thing that we do is find the right size. If your current furnace is indeed the right size, then we can do some apples-to-apples comparisons. The thing in the basement - the furnace - is the last thing I worry about when I’m on a sales call - except for sizing. The windows, the insulation, the square footage, garages, attics, are more important. We’re trying to find what your home needs, not what you have. You can get used to a mis-sized furnace that has a spotty service history with lousy ductwork. You live with it, and don’t know that there’s a better way until someone shows you something better.

Next Steps

Making an investment in HVAC, especially for something that will last for 15 years, is never an easy decision. Part of our job at Fire & Ice is to sell you the perfect piece of equipment to fit your unique home.

Another part of our job is to give you options. We do that by informing you of all your options at every step of your decision process. The more you know, the better the decision you’ll be able to make.

Here are some more articles that you might find useful on your journey toward comfort:

HVAC Buyer’s Guide

A Guide to High-Efficiency Furnaces

The Complete Guide to Home Furnaces

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