Efficiency of Gas Vs. Oil Furnaces

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It’s important to choose the right furnace or boiler because heating and cooling your home is more than half of your energy use, according to the U.S. Department of Energy. True furnaces heat and distribute air while boilers heat and distribute water or steam.

Understanding Efficiency

All furnaces and boilers carry efficiency ratings. This rating is the annual fuel utilization efficiency, or AFUE. The AFUE is the ratio between the amount of heat generated and the amount of fuel used. For example, a furnace with an AFUE rating of 90 percent means that 90 percent of the fuel is converted to heat and the other 10 percent is lost through the chimney. Regardless of whether powered by gas or oil, the accepted minimum ratings are 78 percent for a furnace and 80 percent for a boiler.

Fuel Costs and Storage

Natural gas is typically one of the least expensive fuels, but it depends on where you live. In some areas, home heating oil companies allow you to pre-buy or lock in the best pricing, making oil heat a competitive alternative to natural gas. Gas furnaces and boilers tend to burn cleaner and have fewer odors than their oil-burning counterparts. Oil furnaces and boilers also require onsite storage of the fuel, while natural gas is piped in as you need it.

Replacement Considerations

If you do not have a natural gas line running into your home, you will need to have one installed. Installation can be expensive, and it can take years of fuel savings to offset the initial cost. If you have other gas-powered appliances, such as a dryer or water heater, you will only need to tap into your existing line to add a gas furnace or boiler.

Tax Credits

You might qualify for a tax credit if you replace your furnace by the end of 2010. According to EnergyStar, you can qualify for a tax credit for 30 percent of the cost of purchase and installation, up to a maximum of $1,500. The AFUE requirements for this credit are 90 percent or greater for oil furnaces and 95 percent or greater for gas furnaces.

Other Efficiency Considerations

Regardless of which type of heat you choose to heat your home, you have other ways to improve the efficiency of your heating system. Windows and doors need to be sealed tightly to avoid drafts and leaks. A programmable thermostat allows you to reduce your home’s temperature without altering your comfort level. You can easily reduce the setting while you are away or asleep.