A furnace is a device used for heating. The heat energy to fuel a furnace may be supplied directly by fuel combustion, by electricity such as the electric arc furnace, or through induction heating in induction furnaces. A household furnace is a major appliance that is permanently installed to provide heat to an interior space through intermediary fluid movement, which may be air, steam, or hot water. In U.S. the most common fuel for furnaces is natural gas. In some cases electrical resistance heating is used as a source of heat especially where the cost of electricity is low. Combustion furnaces always need to be vented to the outside, this tends to expel the heat along with the exhaust. Modern high-efficiency furnaces can be 98% efficient and operate without the exhaust. The small amount of waste gas and heat are mechanically ventilated through a small tube through the side or roof of the house.

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A new, high-efficiency furnace can save you money in the long run, so if your furnace needs replacement, it pays to get a new, high-efficiency model. A central furnace or boiler's efficiency is measured by annual fuel utilization efficiency (AFUE). The Federal Trade Commission requires new furnaces or boilers to display their AFUE so consumers can compare heating efficiencies of various models. AFUE is a measure of how efficient the appliance is in the energy in its fuel over the course of a typical year. Specifically, AFUE is the ratio of heat output of the furnace or boiler compared to the total energy consumed by a furnace or boiler. 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. 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.

You can identify and compare a system's efficiency by not only its AFUE but also by its equipment features, listed below.

Old, low-efficiency heating systems:

  • Natural draft that creates a flow of combustion gases

  • Continuous pilot light

  • Heavy heat exchanger

  • 68%–72% AFUE

Mid-efficiency heating systems:

  • Exhaust fan controls the flow of combustion air and combustion gases more precisely

  • Electronic ignition (no pilot light)

  • Compact size and lighter weight to reduce cycling losses

  • Small-diameter flue pipe

  • 80%–83% AFUE

High-efficiency heating systems:

  • Condensing flue gases in a second heat exchanger for extra efficiency

  • Sealed combustion

  • 90%–97% AFUE

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