An efficient furnace plays a vital role in keeping your home warm and cozy during the winter. But how do you know which type of furnace is best? If you want to replace your old furnace or buy a new furnace online, this 6-step guide can assist you. Let’s start with how a furnace works so you can get a better understanding of the process and your needs.


A furnace is designed to heat your home’s air using different types of fuel. It blows hot air through ducts to deliver warm air via grills or air registers. Furnaces are also known as a forced warm-air or ducted warm-air distribution system, and they heat a home using one of these sources:

  • Electricity
  • Fuel oil
  • Natural gas

These three sources can warm a home quickly, and they all have their pros and cons. For instance, depending on the area in which you live, one source may be cheaper than another. In general, gas is the least expensive heating source.


These steps will help you narrow the range of furnace options. When shopping for a furnace, consider these six points:


Depending on your region, some furnace types work better than others. Choose a furnace featuring an ENERGY STAR certification for the best efficiency and savings.

  • Mild Climates: Most of the South, Southeast, and Southwest regions of the United States rarely experience freezing temperatures. To this end, furnaces in milder areas have a “U.S. South” ENERGY STAR stamp. To meet the standard, gas heaters must have an annual fuel utilization efficiency (AFUE) of at least 80. These furnaces are designed specifically for milder zones and are more efficient than standard furnaces. Heat pumps are also a good choice for this climate because they save on energy costs and work best in areas where the temperature never reaches below 40 degrees.
  • Cold and Freezing Climates: The rest of the U.S. needs more heating power during the winter. As such, furnace efficiency standards in these areas will be stricter. To save on your heating bill, look for an ENERGY STAR label for furnaces that have an AFUE rating of 90 or higher.


Gas furnaces represent the most popular type and come in three forms:

  • Single-Stage Gas Furnaces: A standard single-stage gas furnace features a gas valve that opens and closes. The gas flows at only one rate: high. Single-stage gas furnaces operate at around 80% AFUE and are best for milder climates.
  • Two-Stage Gas Furnaces: A two-stage gas furnace can adjust the flow of gas from low or high for better efficiency. A home’s thermostat communicates with the furnace to regulate temperature.
  • Modulating Gas Furnaces: This type of gas furnace regulates heat the most precisely of all the gas furnace types. It is ideal for colder climates to regulate room temperatures efficiently and evenly.

Other types of furnaces:

  • Electric Furnaces: While not as economical as gas furnaces, electric furnaces are still popular. They heat air by moving it over electric coils and distributing the warmed air throughout your home.
  • Oil Furnaces: These furnaces are best for homeowners who do not have access to other types of fuels.
  • Heat Pump: Heat pumps do not create heat. They redistribute heat from the air or ground and use a refrigerant that circulates between the indoor fan coil (air handler) unit and the outdoor compressor to transfer the heat.


Gas is the most popular fuel source because it is readily available and usually the least expensive. Gas furnaces are usually cheaper to buy and install, and they are less messy than oil furnaces.

If gas supply is not available in your area, oil is the next best choice. Finally, electric furnaces are the cheapest to buy and install, but they do not heat large homes very well and will cost the most to operate in electric bills.

Air-source heat pumps transfer heat between indoor air and outdoor air, and are more popular for residential heating and cooling.


The Federal Trade Commission requires all new furnaces display AFUE ratings so consumers can compare their efficiency. The AFUE represents the annual heat output of the furnace compared to the total annual energy consumed. An AFUE of 90% means that 90% of the energy heats the home and the other 10% escapes. AFUE does not include any heat lost through the duct system.

Although a high rating is important, the cost of the fuel source may take away from the furnace’s efficiency. The most efficient furnace is an electric one. An electric furnace hardly loses any energy: in fact, the AFUE rating for an electric furnace is 95%-100%. Despite the high-efficiency level, electricity is more expensive, making electric furnaces the most expensive to run.

When it is time to buy a furnace online, choose a high-efficiency furnace with an AFUE of over 90% in very cold climates. In milder areas, choose one with an AFUE of 80%. The price difference between the two types of furnaces can be $1,000 or more, which may not be worthwhile in a milder area.


Installing a properly sized furnace is the key to heating your home. If your furnace is too small, it will not heat your entire home. A furnace that is too big will waste money on fuel by producing heat you do not need. Many factors determine the best size: square footage, ceiling height, number of windows, and insulation. Ask an HVAC contractor for an in-house evaluation to determine the best size for your home.


Don’t discount your HVAC technician as an indispensable resource. He or she has installed or worked on many HVAC units, and therefore, knows what systems can best meet your needs. Your contractor will perform a load calculation to take into consideration factors unique to your home such as its size and the number of occupants. A trained contractor will be able to take need, budget, and all relevant considerations into account to help you to make your decision.

Your technician will also have insider knowledge about certain brands or models and their reputation in the industry. Consider asking your HVAC technician to make a recommendation between two or three models. This information can make it easier for you to make a decision and reduce your research load.


Buying a new furnace is an investment, and you will appreciate the energy-saving options of the newer models on the market. To discuss your HVAC needs or to request a consultation for a new furnace, call HVAC Experts for help today!