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80% efficiency vs. 95% high-efficiency furnace: Pros and Cons of High-efficiency furnaces

Ramsey Timmerman • Jan 16, 2023

A well-functioning furnace is critical for keeping you’re family comfortable and safe during the winter months. When it comes to replacing or servicing your gas furnace, special attention is needed to determine what type of furnace you have or need. When replacing or installing a new furnace, you might have wondered if it makes sense to invest in a high-efficiency furnace (95% furnace, 96% furnace, or higher). This article will help you determine what type of furnace you currently have, the differences between standard and high-efficiency furnaces, as well as the pros and cons of installing each.

How is efficiency measured (AFUE)?

Furnace efficiency is measured using annual fuel utilization efficiency (AFUE) measurements. AFUE is a measurement of how efficiently a furnace converts fuel to heat; how much gas energy the furnace is actually turning into heat for your house. A standard efficiency furnace, or 80% AFUE, converts ~80% of the gas energy into heat for your home. High-efficiency furnaces convert more of the gas energy into heat and have AFUEs of 90%-99%. This means that high-efficiency furnaces require less fuel to heat your home and can save you on energy costs.

Differences between an 80% AFUE and a high-efficiency furnace

Both furnaces combust fuel (propane or natural gas) and transfer that energy as heat to air flowing through your furnace and eventually to your home. A heat exchanger in the furnace is where the heat transfer process takes place and a main difference between these units. A heat exchanger is a series of metal tubes that transfer heat to cold air blowing across it by your furnace blower wheel.

The 80% AFUE Furnace

An 80% furnace operates with open combustion; this means it extracts air from right next to your furnace for combustion rather than from an outdoor vent. After transferring 80% of the energy into the air across the heat exchanger, the combustion gas is still warm and is vented outside with a single metal exhaust pipe.

The high-efficiency Furnace (90-99% AFUE)

High-efficiency furnaces use sealed combustion and heat exchangers which must pull air from the outdoors. This is usually done through a PVC air intake pipe created specifically for these types of systems. High-efficiency furnaces also have a second heat exchanger to absorb even more heat from the exhaust gases and transfer more to your home's air. So much heat is extracted from the exhaust gas in high-efficiency furnaces that the exhaust can be vented out using a plastic PVC pipe; there is little risk of melting the plastic since so little heat remains.

Another reason PVC is used over metal for exhaust is that high-efficiency units produce condensation. The lower heat of the exhaust means that water can condense and accumulate. High-efficiency furnaces require exhaust vents that don’t corrode (i.e. PVC) and additional condensate lines to collect and remove the condensation from the unit.

How do you determine what type of furnace you have?

There are several ways to determine what type of furnace you currently have:

You can find your furnace AFUE rating on its Energy Guide Stickers. See the below image as an example.
The manual for your furnace (included with your furnace or found online) will mention AFUE in the product specifications.
Looking at the furnace exterior: High-efficiency furnaces have two PVC vents; an intake and an exhaust vent. 80% AFUE units will only have one metal exhaust vent and metal grates on the furnace for air intake.
Looking inside the furnace (internal components): High-efficiency furnaces will have sealed combustion chambers while 80% AFUE will have open combustion chambers.

Which system should I install?

If you currently are thinking of upgrading to a higher efficiency system from a standard efficiency system, these are some pros and cons you should consider.

80% AFUE Furnace

Pros -

Upfront cost of the system is less
Labor and other installation costs are less - the system can easily be installed if the current system is an 80% AFUE furnace
Long-term service expenses are less - less complicated internal components means fewer and cheaper service calls.

Cons-

Less energy efficient - more greenhouse gas emission
Higher utility bills - ~$120-$200 more per year
Fewer opportunities for tax rebates and other incentives during installation

High-Efficiency Furnace (90%-99% AFUE)

Pros -

Lower utility bills - $120-$200 less per year
High energy efficiency - reduction in greenhouse gas emissions
More federal and state tax incentives and rebates available

Cons -

Upfront system cost is higher -The unit itself cost more since there is a sealed combustion chamber, secondary heat exchanger, condensation collection, additional safety switches, and higher efficiency blower motors
Labor and installation costs higher - PVC intake and exhaust vents need to be added significantly increasing labor and material costs
Higher long-term service expenses - Complicated system and advanced parts mean more expensive service when the system is having issues

There are several other things you should consider like the increasing cost of natural gas and lifetime savings for efficient residential furnaces. Below is a chart from the US Department of Energy that goes over the potential lifetime savings of upgrading to an Energy Star-rated high-efficiency furnace. They conclude that anywhere from $1,275-$1,550 can be saved over the lifetime of the furnace.

United States Department of Energy

What this chart does not take into account is added labor and service charges for high-efficiency systems, which can greatly reduce these savings. You should consider all pros, cons, and potential future expenses when choosing your next furnace.

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