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High-Efficiency Furnaces & Air Conditioners-How Much Will They Save You?

Today’s high-efficiency air conditioners and furnaces cost more than their predecessors, no doubt, but how much can they save you on your energy bills? Unfortunately, every situation for every homeowner is going to vary. The size of your home, the unit you choose, how well your home is insulated, what part of the country you live in…all of these variables change the actual numbers. But if we look at the furnaces and air conditioners and compare them to the older models, we can be sure they will create significant savings.

High-Efficiency Furnaces

To compare the old and new furnaces, we have to look at their individual AFUE (Annual Fuel Utilization Efficiency) ratings. The AFUE is a unit that determines the percentage of fuel used for heat, and the amount that does not get used and gets sent out the flue as exhaust. Furnace models made in the 1970s usually have an AFUE rating of 65% efficiency. Today, the government demands that new models have a rating of at least 78%. But that’s just the minimum. Modern furnaces can have a rating as high as 98.2%. That means that 98.2% of the fuel is utilized, while only 1.8% is exhaust. Many furnaces fall between 90% and 98% efficiency. If you are replacing an older furnace with a high-efficiency (90%+) furnace, you should see savings on your heating bills of 25%-30%.

High-Efficiency Air Conditioners

Air conditioners are rated by SEER or (Seasonal Energy Efficiency Ratio) and EER or (Energy Efficiency Ratio). High-efficiency models are about 14% more efficient than standard models. According to the Energy Star website, if you replace an air conditioner that’s 12 years old or older, with an Energy Star qualified model, you could save 30% on cooling bills.

Average Household Energy Expenses

So, if you can save 25% to 30% on both your heating and cooling bills by replacing your old units with new, high-efficiency units, that qualifies as significant savings. According to the Energy Star website (2009 statistics), the average household spends $2,200 in energy bills annually. Of that, almost half (46%) is spent on heating and cooling your home. That’s over $1,000 per year. Take 25% off of that and you’ve got $250 in savings per year (potentially more if energy costs rise). Now you can multiply $250 by the amount of years you’ll be living in your home and you can calculate how long it will take to recoup your investment.

Calculating the Savings

The Department of Energy defines units with an AFUE higher than 90% as “high-efficiency” and units with an 80%–83% AFUE as “mid-efficiency.” High-efficiency models cost roughly $500 to $1,000 more than mid-efficiency units. When you’re calculating the savings, remember, all new furnaces and air conditioners are going to be more efficient than the old ones you replace. You’re comparing the price difference between a more expensive high-efficiency system vs. a mid-efficiency system.You had to buy a new furnace or air conditioner regardless because the old one didn’t work. So the difference in price between a mid-efficiency unit and a high-efficiency unit is the amount of money you have to recoup. Both will save you on energy bills. But the one that costs more will also save you more.

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