Selecting a heating system for your home

If you're remodeling or your current furnace is getting old, consider buying a more efficient model. A new furnace will have a minimum efficiency of 80%.

What to look for in a new system

The climate zone in which you live, the insulation in your home and the heating usage pattern of your household will influence the payback you receive when purchasing a new furnace.

Ask yourself these simple questions before proceeding: First, are you going to be doing any remodeling or room additions that might require the furnace to be moved, or a larger furnace installed? Second, are you planning to insulate your home or replace your windows in the near future? These changes may allow you to install a more efficient furnace.
  • A High Annual Fuel Utilization Efficiency (AFUE): All furnaces should have this efficiency rating.The higher the AFUE, the more efficient the unit. Federal Appliance Energy Standards of 1993 essentially require manufacturers to make units with an AFUE of at least 80%, and there are units available up to 96% efficient.
  • How Efficient is the Fan Blower Motor? Some newer furnaces have electronically commutated, or ECM, blower motors that are considerably more efficient than standard motors. A fan blower motor is used to push the heated air throughout the ductwork system and through your home. Also, some people like to run their furnace fans all year long for such things as comfort or air cleaning. The cost to operate a standard furnace fan in this way could run about $250 per year. However, a furnace with an ECM motor used in the same manner would cost about $50 per year. When shopping for a new furnace consider purchasing one with an ECM motor.

How much are you currently spending to heat your home?

You can get a rough estimate of your heating costs by looking at your monthly gas bills in the summertime and subtracting those gas bills from what you are paying in the winter. For example, if you are paying $22 for natural gas in July, and you are paying $122 for natural gas in January, that means you are spending about $100 to heat your home in January. If you take your gas bills for November, December, January, February and March, you can get a rough idea of how much you are spending to heat your home. For example, after doing these calculations you might determine you are spending about $500 a year to heat your home. If you were to replace your existing furnace, which is most likely about 60% efficient, with a new furnace that is 80% efficient (the minimum now allowed by law), you would be saving approximately 25% (or 25 cents), on every heating dollar. If you multiply your $500 yearly cost by that 25 cent savings per dollar, you get an annual savings of $125. If you would replace your furnace with a 93% efficient furnace, you would be saving about 35 cents on every heating dollar. Therefore, for one year you would save $175. So you can see you can save a considerable amount of money on your heating bill by replacing your furnace with a higher efficiency model.

How Much Are You Willing to Spend?
A new furnace installation can cost anywhere between $1,000 and $3,500, depending upon the complexity of your specific installation. High efficiency models might cost an additional $500 to $1,000 for the added efficiency. If your family has high annual heating bills, a higher efficiency furnace is going to make more economic sense than it would for a family that has very small heating bills. So when determining how efficient a furnace to buy, take into account what you are spending on your annual energy bills. If you are going to be in your home for a period of time that would justify this additional expense, it makes sense to install the highest efficiency furnace that you can afford. A new high efficiency furnace may also increase the resale value of your home.

Other factors that determine your annual heating cost are:

  • The size of your home
  • How well your home is insulated
  • The draftiness of your home
  • The amount of leaks in your ductwork
  • The temperature at which you keep your home during the winter season
  • The number and type, or efficiency level, of windows you have in your home

Sizing the furnace

Buying the proper size of furnace for your home is just as important as its efficiency. If you buy a furnace that¹s too big for your home, it will have short cycle-times and its efficiency will be significantly reduced. A furnace that is properly sized costs less to operate. When talking to your heating and cooling contractor, be sure to have them perform a heat-loss, heat-gain calculation, and do not rely upon rule-of-thumb estimates -- they are often inaccurate. The heat-loss, heat-gain calculation takes into account:


  • The size and configuration of your house
  • The levels of insulation in your walls, ceilings, 2nd floors
  • The number and type of windows in your home
  • The orientation of your home to the sun
  • The size and configuration of your house
  • Plus many other important considerations

Therefore, asking for a heat-loss, heat-gain calculation will assure you that the furnace is correctly sized for your home.

Some of the higher efficiency furnaces even come with two-stage burners. These two-stage burners allow the furnace to operate at lower burn rates using less gas when the heating demand on the home is low. During times of greater heating demand, the second stage burner is employed to meet the higher heating needs of the home. If you live in a large home, the additional savings from these features may well be worth the cost.

Selecting a contractor

  • Be sure to verify the credentials of your contractor. Ask to see current proof of a valid contractor's license. If in doubt you can always call the Contractors State Licensing Board (CSLB) at 1-800-321-2752.
  • Make sure your contractor is adequately covered for workers' compensation, liability and property damage. Ask to see current certificates of insurance coverage.
  • You can always contact CSLB for disclosure of any complaint history about your contractor.
  • Always ask your contractor for several references and check these references yourself.
  • Always make sure that all work to be done is included in the written contract. Do not rely on verbal understandings for the cost of materials or services.
  • Obtain multiple bids and never be pressured into signing a contract.
  • Don't make final payment until you're satisfied with the work.

Additional tips for heating systems

New furnaces often have different venting and flue requirements. When replacing your furnace make sure your contractor:

  • Accesses your existing flue
  • Follows new code requirements for venting furnaces and water heaters
  • Obtains necessary permits and inspections

For help in determining your heating costs and other ways of maintaining your level of comfort call PG&E's Smarter Energy Line at 1 800 933-9555.