What Does AFUE Mean?

Summary

When shopping for a new furnace, you’ll probably come across Annual Fuel Utilization Efficiency (AFUE). It’s one of the most important ratings to understand when choosing a system that keeps your home warm while managing energy costs.

When shopping for a new furnace, you’ll probably come across Annual Fuel Utilization Efficiency (AFUE). It’s one of the most important ratings to understand when choosing a system that keeps your home warm while managing energy costs.

At Midwest Heating & Cooling, serving Mukwonago and the greater Milwaukee area, we believe in making HVAC information easy to understand so homeowners can make confident, informed decisions.

Let’s break down what AFUE means, how it affects your energy bills, and how to tell whether your furnace is running efficiently.

What Is AFUE and How Is It Measured?

AFUE is a rating developed by the U.S. Department of Energy to measure how efficiently your furnace converts fuel into usable heat.

Think of it like a miles-per-gallon rating for your car: it tells you how much heat your furnace produces for every dollar you spend on fuel.

Here’s how it works:

• An AFUE furnace with a rating of 80% means that 80% of the fuel becomes heat for your home, while the remaining 20% is lost through exhaust or venting.
  
• A 95% AFUE furnace converts 95% of the fuel into heat, wasting only 5%.

The higher the AFUE percentage, the more efficiently the system heats your home, and the less money you spend on energy over time.

Understanding Efficiency Ratings for Gas Furnaces

Most gas furnaces today fall into three efficiency categories:

1. Low Efficiency (Older Furnaces):
   • AFUE: 56–70%
   • Common in furnaces built before 1990.
   • Often have a pilot light and a single heat exchanger.
2. Mid Efficiency:
   • AFUE: 80–83%
   • Uses an electronic ignition and improved venting.
3. High Efficiency (Condensing Furnaces):
   • AFUE: 90–98.5%
   • Equipped with two heat exchangers to capture more heat from combustion gases before they exit the flue.
   • Typically ENERGY STAR® certified, meaning they meet strict efficiency standards set by the Department of Energy.

If your furnace is more than 15 years old, upgrading to a high-efficiency furnace could reduce your heating bills by up to 30%, depending on your home and fuel type.

What Is a Good AFUE Rating for Your Home?

A “good” AFUE rating depends on your home’s needs, climate, and budget.

• In Wisconsin’s cold winters, where heating demand is high, a 90%+ AFUE furnace offers the best long-term value.
• If you live in an area with milder winters, an 80% AFUE furnace may still perform efficiently without the higher upfront cost.

At Midwest Heating & Cooling, we help homeowners balance installation cost, energy savings, and comfort goals when selecting the right system.

We also provide Energy Guide comparisons so you can see exactly how much a new furnace could save you annually versus your current system.

High-Efficiency Furnaces and Energy Savings

A high-efficiency furnace uses advanced technology, such as sealed combustion, variable-speed blowers, and condensing heat exchangers, to maximize performance.

These systems not only provide more consistent heat but also improve indoor air quality and reduce greenhouse gas emissions.

Many ENERGY STAR-certified furnaces may qualify for rebates or tax credits, especially when paired with smart thermostats or high-efficiency air filtration systems. Our team can help you explore local utility incentives available in the Mukwonago and Milwaukee area.

AFUE, Natural Gas, and Environmental Impact

Most modern furnaces in Wisconsin run on natural gas, which burns cleaner than oil or propane. Pairing a high AFUE furnace with natural gas provides an excellent balance between comfort, efficiency, and sustainability.

If you’re focused on lowering your home’s carbon footprint, ask us about systems that offer both high AFUE ratings and low NOx emissions, a great choice for eco-conscious homeowners who want efficiency without compromise.

When to Upgrade an Older Furnace

If your current system is more than 15 years old, struggles to heat your home evenly, has frequent repairs, or causes rising energy bills each winter, it’s likely time to consider a replacement.

A new, energy-efficient furnace with a higher AFUE rating not only saves money but also provides quieter operation, better comfort control, and peace of mind knowing your home is safely and efficiently heated.

Trust Midwest Heating & Cooling for Energy-Efficient Comfort

At Midwest Heating & Cooling, we don’t just install furnaces, we help families across Mukwonago and the greater Milwaukee area stay warm while saving energy.

Our certified technicians take the time to explain your options, compare efficiency ratings, and help you choose a furnace that fits your home, budget, and lifestyle.

Whether you’re exploring mid-efficiency or high-efficiency options, we’ll make sure you understand what your AFUE rating means and how to get the best comfort for every dollar you spend.

Ready to upgrade your home comfort?
Contact Midwest Heating & Cooling today for a free estimate and learn how a new AFUE furnace can make your home more efficient this winter.

Frequently Asked Questions

What does AFUE stand for?
AFUE stands for Annual Fuel Utilization Efficiency, a rating developed by the U.S. Department of Energy to measure how efficiently a furnace turns fuel into usable heat.

What is considered a good AFUE furnace rating?
A good AFUE rating is typically 90% or higher for Wisconsin homeowners, as it ensures minimal energy loss and maximum heating performance.

How can I tell if my older furnace is inefficient?
If your energy bills keep rising or your home feels unevenly heated, your furnace may have an AFUE rating below 80%, meaning much of the fuel is wasted through exhaust.

What’s the difference between an 80% and 95% AFUE furnace?
An 80% AFUE furnace loses about 20% of heat energy through exhaust, while a 95% AFUE furnace captures nearly all heat-reducing waste and lowering heating costs.

Do high-efficiency furnaces qualify for rebates?
Yes. ENERGY STAR-rated furnaces often qualify for local utility rebates or federal energy tax credits. Midwest Heating & Cooling can help you check available incentives in your area.

Editor’s Note: Our team of experts is always on the lookout to bring you the most up-to-date and comprehensive information about our industry. This post was originally published in February 2023 and has been updated on November 24, 2025 to reflect current best practices.