A Guide to Heater Efficiency Posted on January 13, 2025 Did you know that half of your annual utilities goes to HVAC, with home heating accounting for a big chunk of the change? In fact, space heating takes up 43% of the typical US home’s energy consumption. As utilities and the cost of living go ever higher, it’s important to consider the efficiency of your home heating system. In this guide, we discuss everything you need to know about heating efficiency, the benefits of high efficiency heater units, and how to get the most heat out of your buck. Understanding Heater Efficiency Metrics There are two measurements used to determine the efficiency of a heating system: AFUE and COP. Annual Fuel Utilization Efficiency (AFUE) AFUE measures the percentage of the fuel a heater converts into heat over a year. The AFUE rating is always displayed in the label of heaters. For example, a furnace with an AFUE of 90% converts 90% of the fuel into heat, with the remaining 10% lost as waste (for example, through exhaust). To put these into perspective, a heater with an AFUE of 85% that uses $1,000 worth of fuel annually provides $850 worth of heating, with $150 lost as waste. Therefore, the higher the AFUE rating, the more efficient the heater and the more heat you get out of the utility cost. Coefficient of Performance (COP) COP is another metric used in other heating systems such as heat pumps. It is the ratio of heat output to the energy input. For example, a COP of 3 means the system produces 3 units of heat for every unit of electricity it consumes. The higher the COP, the more efficient the unit is. COP ratings are used in heat pumps, refrigerators and ACs. Heating Seasonal Performance Factor (HSPF) This measures the energy efficiency of heat pumps in heating mode over the course of a heating season. It quantifies how efficiently a heat pump converts electricity into heat under varying conditions, factoring in seasonal temperature changes. HSPF is the heating counterpart to SEER (Seasonal Energy Efficiency Ratio), which measures a unit’s cooling efficiency. While SEER focuses on cooling, HSPF strictly evaluates the heating performance. Types of Heaters Based on Efficiency Using the above metrics, heaters are divided into three categories based on their efficiency. Low-efficiency heaters: These are designated as those below 78% AFUE. Mid-efficiency heaters: These range between 78–89% AFUE. High-efficiency heaters: Categorized as having 90% and above AFUE. Comparing High Efficiency Heaters Heater EfficiencyProsConsIdeal UseCondensing Furnace95%+ AFUELower fuel costs, eco-friendlyHigher upfront costHomes in cold climatesHeat PumpCOP 2.5–4, HSPF 8–13Efficient, doubles as an air conditionerLess effective in extreme coldMild to moderate climatesBoiler85%–95% AFUEProvides consistent heat, good for radiant setupsSlow response timeHomes with radiant or hydronic heating Heater Price and Running Costs Initial Costs Standard efficiency furnace (80% AFUE): $2,000–$5,000. High-efficiency furnace (95%+ AFUE): $3,500–$10,000. Heat pumps (high-efficiency): $3,000–$10,000. Annual Running Costs These estimates depend on fuel type, the space being heated, insulation, temperature set point and regional utility rates. In general: Natural gas furnace: $600–$1,200 annually for heating Heat pump: $300–$700 annually, thanks to their higher efficiency over furnaces Energy Savings Over Time Switching from a standard to a high-efficiency heater can save: Gas furnace: 10–20% in fuel costs annually Heat pump: Up to 50% compared to electric resistance heating Factors That Affect Heater Efficiency Fuel source In general, natural gas is more cost-effective than oil or electricity. 2. Combustion efficiency This refers to how effectively the heater burns the fuel. It is measured by using specialized tests for flue gases. Typically, wood-burning fireplaces have the lowest combustion efficiency at 10-40%, compared to 50-80% for space heaters and 85-95% for high efficiency gas or oil condensing furnaces. 3. High efficiency features High-efficiency heaters incorporate a host of energy-saving features to maximize their fuel usage or heat generation. These include: Condensing technology: This recovers heat from exhaust gases, pushing AFUE beyond 95%. Variable-speed motors: Also known as inverters, these adjust the heating output to match the demand, instead of running at full-power all the time. Sealed combustion chambers: By making the combustion chamber airtight, heat losses are minimized. Our Recommended High Efficiency Heaters 1. Gas Entry level Empire Comfort Systems DV-35-SG 35,000 BTU Direct-Vent Wall Furnace Empire’s Direct-Vent units are ideal where existing flues or chimneys cannot be used. This model puts out 35,000 BTUs of heat and includes a basic reed switch thermostat. It has 64 – 69% AFUE Efficiency Rating and is available in both Liquid Propane (DV-35-SG-L) and Natural Gas (DV-35-SG-N). Included with the package are a Standard Vent Cap, Flue Outlet and Air Intake For Venting. Price: $1,869.00 Empire Comfort Systems DV-35-SG 35,000 BTU Direct-Vent Wall Furnace This direct-vent wall furnace offers clean and cost-efficient comfort to add soothing atmospheric warmth to your room. Heating larger areas is convenient and ec... View Product Premium / smart Rinnai EX38DT 38400 BTU EnergySaver Direct Vent Wall Furnace This Direct Vent Wall Furnace with 38,400 BTUs is an excellent source of heat for large rooms across most regions. It features multiple venting installation options for added convenience. It uses modulating technology to maximize efficiency, ensuring that it delivers just the right amount of heat. The unit continuously monitors room temperature, detecting fluctuations of less than 1°F. When a door opens and cold air rushes in, the furnace automatically adjusts fan speed and BTU output to restore the desired temperature quickly and efficiently. It comes with a built-in programmable thermostat with two timer settings and can be connected to a WiFi-enabled thermostat, giving you even more flexibility over your comfort control. In case of a power outage, rest assured: the furnace will safely shut off the gas and automatically restart once power is restored. The EX38DT is also certified for installation in Manufactured (Mobile) Homes Price: $2,633.00 Rinnai EX38DT 38400 BTU EnergySaver Direct Vent Wall Furnace This Direct Vent Wall Furnace, with 38,400 BTUs, is an excellent source of heat for large rooms across most regions. Direct Vent furnaces can be installed alm... View Product 2. Electric Best heating technology Friedrich FPHMR42A3A 42000 BTU Floating Air Pro Five-Zone Mini Split Air Conditioner with Heat Pump This five-zone 42,000 BTU compressor has a connected capacity of up to 54,000 BTUs. It features Friedrich’s Precision Inverter Technology, offering a variable speed compressor to keep up with your comfort control needs while still being energy efficient. The unit boasts Low Ambient Operation making it a great year round option for heating and cooling for most of the US. It will operate in the Cooling Mode when outdoor temperatures are as low as 14°F up to 115°F. The range in which this unit will heat is equally as wide and it will heat when temperatures are as low as -13°F up to 75°F! Friedrich’s multi-zone compressors include a built-in troubleshooting control board as standard. This gives you the ability to check several parameters on all units from the pump to each connected indoor unit. It is a valuable feature that is typically not included with other brands or is typically sold as an add-on option. Price: $2,875.00 Friedrich FPHMR42A3A 42000 BTU Floating Air Pro Five-Zone Mini Split Air Conditioner with Heat Pump Base Price shown is for outdoor unit only. You can choose from 3, 4 or 5 indoor units below with a total connected capacity of 54,000 BTUs. If you are cho... View Product Tips for Maximizing Heater Efficiency 1. Proper sizing Heaters are typically sized based on their BTU output and the size of the space to be heated. An oversized or undersized heater wastes energy and increases wear. Click here for our guide to Heater BTU sizing and calculator. 2. Upgrade thermostats Use programmable or smart thermostats to optimize heating schedules. The rise of smart homes makes the job easier by allowing homeowners to set routines or even geofencing so that heaters kick in during set hours or based on the number of people at home. 3. Seal air leaks Most heat loss in homes is caused by poor weather sealing. According to the EPA, homeowners can save up to 15% off heating costs through proper sealing. Prevent heat loss around doors, windows, and ductwork so the heat doesn’t escape. 4. Improve insulation This especially applies to attics and crawl spaces, as heat tends to rise and escape through the roof. Up to 45% of heat loss goes through the attic. Check out our Insulation Guide to ensure the heat stays in, not out. 5. Regular Maintenance Don’t forget to clean components like burners and filters. For the specialized parts, schedule annual tune-ups with qualified technicians. This is recommended just before the heating season at the tail end of summer. 6. Consider zoning Divide your home into zones to ensure targeted heating. Not all spaces need to be heated regularly, while some living areas may benefit from a particular type of heater. Check out: The types of gas heaters Our guide to electric heaters The different kinds of space heaters Conclusion Investing in a high-efficiency heater can significantly reduce energy bills and environmental impact. By understanding efficiency metrics like AFUE, homeowners can make educated decisions tailored to their specific home, climate, budget, and heating needs. Though the initial investment is higher, the long-term savings and comfort justify the cost. When you’re ready to make the switch, check out our extensive line of heaters. From baseboard and portable heaters to high efficiency furnaces, we offer every kind of heater to meet your needs. Mickey Luongo Mickey is the resident heating and air conditioning expert with over 15 years of experience in the industry.