Short answer
Yes. Estimate payback by comparing your current heating energy costs to what they’d be with a higher-AFUE furnace, then divide the net installed cost (after rebates/credits) by the annual savings. The quick steps: use your gas bills to estimate annual heating fuel use, adjust for furnace efficiency (AFUE), project new usage with a 95–97% furnace, multiply by your fuel price, and compute simple payback.
How to estimate it (with formulas and an example)
Use a simple worksheet approach with your utility data.
1) Gather
- Annual heating fuel use (therms or gallons)
- Current AFUE (estimate from model/age)
- New furnace AFUE (e.g., 95–97%)
- Gas price ($/therm) or oil/propane price
- Blower electricity (optional)
- Installed cost minus rebates/credits
2) Calculate annual savings
Delivered heat (old) = Annual Fuel Old × AFUE_old
Fuel with new = Delivered heat / AFUE_new
Fuel savings = Annual Fuel Old − Fuel with new
Dollar savings (fuel) = Fuel savings × Fuel price
Add blower savings (if ECM upgrade) ≈ $30–$120/yr
Total annual savings ≈ Dollar savings + blower savings
3) Payback
Simple payback (years) = Net installed cost / Total annual savings
Example 1 (typical upgrade)
- Annual heating gas use (after subtracting summer base load): 800 therms
- Gas price: $1.60/therm
- Old furnace AFUE: 70%
- New furnace AFUE: 96%
- Installed cost: $6,500; rebate/tax credit: $600; net cost: $5,900
Calculations:
- Delivered heat = 800 × 0.70 = 560 “therm-equivalent”
- New fuel = 560 / 0.96 = 583 therms
- Savings = 800 − 583 = 217 therms
- Fuel savings = 217 × $1.60 = $347/yr
- Blower electricity savings (ECM vs PSC): ~$60/yr
- Total annual savings ≈ $407/yr
- Simple payback = $5,900 / $407 ≈ 14.5 years
Example 2 (very old furnace or higher gas prices)
- Annual heating use: 1,000 therms, gas $2.00/therm, old AFUE 60%, new AFUE 96%
- Delivered heat = 1,000 × 0.60 = 600
- New fuel = 600 / 0.96 = 625 therms
- Savings = 375 therms → $750/yr fuel + ~$70 electricity = ~$820/yr
- If net cost is $5,500, payback ≈ 6.7 years
If simple payback is less than the equipment’s expected life (15–20 years), the energy savings alone likely justify it. If longer, weigh non-energy benefits: reliability, safety, comfort, rebates, and potential fuel price increases.
Step-by-step guidance
- Gather data
- Last 12 months of gas/oil/propane bills. Mark the “heating months” and subtract a summer monthly average to remove water-heating/cooking.
- Current furnace AFUE. If the label is missing: pre-1990 units often 60–70%; 1990s standard ≈78–82%; condensing furnaces 90–96%.
- Candidate furnace AFUE (most quality models 95–97%).
- Fuel price and electricity rate.
Installed cost quotes and available rebates/tax credits.
Normalize if you want extra accuracy
Use Heating Degree Days (HDD) to adjust for mild or cold years. Free HDD data can help compare apples-to-apples. Not required, but helpful.
Run the math
Use the formulas above or a spreadsheet. Try a few scenarios with higher fuel prices to test sensitivity.
Consider blower electricity
ECM variable-speed blowers often cut fan electricity use 30–60%. Savings are larger if you run the fan continuously or have central AC.
Factor in incentives and lifespan
Utilities commonly offer $150–$600 rebates; federal 25C tax credits may apply to high-efficiency gas furnaces (up to $600). Check your local programs.
Compare payback to expected furnace life and your plans to stay in the home.
Tools and materials
- Utility bills or online account data
- Calculator or spreadsheet (ToolStash has energy-calculator recommendations)
- Flashlight and phone camera (to capture model/AFUE labels)
- Carbon monoxide alarm (UL-listed) near sleeping areas
- Optional: infrared thermometer to spot duct leaks/insulation gaps
Safety considerations
- If you inspect the furnace cabinet, switch off power at the service switch/breaker. Do not loosen gas fittings or open sealed combustion compartments.
- Ensure you have working CO detectors. If you suspect a cracked heat exchanger, sooting, or yellow flames, stop using the furnace and call a pro immediately.
Tips for best results
- Right-size the furnace. Oversizing short-cycles, wastes energy, and reduces comfort. Ask for a Manual J load calculation, not a rule-of-thumb.
- Fix the ductwork. Sealing and balancing often saves 10–20% and improves comfort; sometimes it’s a faster payback than the furnace itself.
- Insulate and air-seal the house. Reducing heat loss may let you choose a smaller, cheaper furnace.
- Consider a dual-fuel setup (heat pump + furnace) if electricity rates are favorable; it can beat a furnace-only system on operating cost.
Common mistakes to avoid
- Using nameplate input BTU instead of actual fuel use from bills.
- Ignoring the summer base load (water heating), which overstates heating fuel.
- Skipping incentives/credits in the economics.
- Forgetting blower electricity.
- Replacing equipment without addressing duct leakage or sizing.
When to call a professional
- To perform a Manual J/S/D (load, equipment selection, duct design) and duct static pressure testing.
- For combustion analysis and to verify proper venting and gas line sizing.
- To secure accurate installed cost quotes and confirm eligibility for rebates/credits.
Typical costs and savings
- Installed high-efficiency gas furnace: roughly $5,000–$9,000 in many markets (more if major duct/vent work is needed).
- Annual fuel savings: often 10–35% depending on old AFUE and usage. Higher fuel prices and very old units greatly improve payback.
Run the worksheet with your numbers. If the payback feels long, consider lower-cost upgrades (duct sealing, smart thermostat, attic insulation) now and plan furnace replacement at end-of-life or alongside a load-reduction project. That approach often yields the best overall return.