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Caddy Advanced CR Wood Furnace

The Caddy Advanced CR Wood Furnace offers an intuitive and efficient heating solution for your home, with a recommended heating area of 1,000 to 2,500 ft². F...

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Do You Have The Right Furnace?

Staying warm certainly comes with a price. Space heating and water heating account for almost two-thirds of total residential energy usage in the United States and an astounding four-fifths in Canada's colder climate. Switching to LED light bulbs and purchasing Energy Star-rated appliances can undoubtedly help make your home more energy-efficient. However, finding ways to reduce your heating and cooling loads is where real savings start to add up. If you are thinking about replacing your older, inefficient furnace, we outline everything you need to know below.

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By Tobias Roberts, Rise Writer

Mar 20, 2025 · 7 min read

Does a Furnace's Age and Efficiency Matter?

The US Department of Energy says that heating your home uses more energy and costs homeowners, more money than any other appliance or home function. Of course, when outside temperatures are well below freezing, turning off the furnace will quickly make your home extremely uncomfortable. According to some estimates, about 90 percent of homes in the United States are under-insulated and suffer from leaky building envelopes. These common building errors and omissions negatively affect the energy efficiency and thermal performance of any home.

Net-zero or energy-efficiency upgrades or retrofits to existing homes are one way to reduce the energy consumption related to heating your home. For example, passive home renovations can achieve a 75 to 90 percent reduction in overall energy needs. Investing in a smart thermostat is another fundamental strategy for increasing the energy efficiency of your HVAC equipment.

However, suppose your home has an older furnace. Even if your home is well-insulated and has a tight building envelope, you will spend more energy (and money) comfortable in the winter. The US Department of Energy estimates that furnace and boiler systems over 15 years old might have efficiency ratings between 56 and 70 percent. Modern conventional heating systems on the market today can achieve efficiency ratings as high as 98.5 percent.

Besides saving on your monthly energy bill, upgrading to a more efficient furnace is also a great way to cut back on your home's carbon footprint. The vast majority of households across the country continue to rely on fossil fuels for their heating needs. About 48 percent of families rely on natural gas, while less than one percent of homes rely on electric heat pumps. Does your home depend on fossil fuels like natural gas for heating? If so, the most efficient furnaces on the market can drastically reduce waste. They ensure that virtually all the fuel used by your furnace turns into adequate heat for your home.

Lennox Energy Star High Efficiency Furnace — Energy Star High Efficiency Furnace. Photo Credit: Lennox

When Should a Furnace Be Replaced or Upgraded?

Malfunctioning furnaces are one reason why homeowners experience costly winter heating bills. Other common issues that can negatively affect furnace efficiency are dirty air ducts, faulty heat exchangers, and exhaust fan problems. Moreover, malfunctions with a furnace or heating system could also lead to carbon monoxide gas emissions into your home. A 2014 report released by the Consumer Product Safety Commission (CPSC) found that there were, unfortunately, 64 carbon monoxide poisoning fatalities due to malfunctioning heating systems in 2014.

Furnaces generally have a lifespan of between 16 and 20 years. So, if your furnace is getting older and closer to replacement time, consider upgrading to a high-efficiency furnace (between 90 and 98 percent annual fuel utilization efficiency). This retrofit will be a great way to improve your home's energy efficiency and reduce costs. The Energy Services Group estimates that upgrading from an 80 percent furnace to a 92 percent natural gas furnace could save you around $120 per year on heating costs alone. Over the 20 year lifespan of that furnace, savings could be well over $2,000.

What Do Furnace Efficiencies Mean?

The efficiency of furnaces on the market is measured by the Annual Fuel Utilization Efficiency (AFUE). An AFUE efficiency rating is used for furnaces that burn gas, oil, or propane fossil fuel sources. On the other hand, heat pumps have their efficiency measured by the Heating Seasonal Performance Factor (HSPF). We will come back to heat pumps at the end of this article.

For natural gas, oil, or propane furnaces, an AFUE rating essentially measures a furnace's ability and efficiency in converting fuel to energy. For example, an older furnace with an 80 percent AFUE rating can turn 80 percent of the energy it consumes into usable heat for a home. The other 20 percent is used and wasted during the heating process. Obviously, the higher the AFUE rating for your furnace, the more energy-efficient your home will be. Despite the advances and improvements in furnace efficiencies, a standard-efficiency furnace is still considered one that achieves only an 80 percent AFUE rating. In most homes across the country, around 20 percent of the fossil fuels used for heating are essentially lost as waste exhaust.

How Do I Know What Size Furnace I Need?

Opting for a higher furnace efficiency is undoubtedly one way to lower your heating costs and the energy demand for keeping your home at a comfortable temperature during the winter. However, improperly sizing your furnace can also lead to wasted energy. HVAC professionals calculate the optimum furnace size through a mixture of three different calculations:

Design Load

Design load includes fixed details of the home, such as:

Square footage
Average winter temperatures
Insulation levels or capacity
The tightness of the building envelope, and
The orientation of the house to the sun for passive heating benefits

Extreme Load

The extreme load takes the possibility of severe winter cold events into consideration.

Part Load Condition

This measurement considers the cycling on and off of the furnace, which occurs when the actual heating load falls beneath the design load. Consistent cycling on and off reduces the lifespan of your furnace. It can also reduce the energy efficiency of your heating system and hinder humidity control in your home.

Heat Loss/Heat Gain

A heat loss or heat gain calculation is also necessary to determine your home's best furnace. This calculation determines how much heat escapes from your home in a certain amount of time. It more accurately calculates the best-sized HVAC equipment for a given family.

For homeowners wanting to get a basic idea of the proper size for a furnace, you need to know the square footage of your home and which of the five climate zones your home is within. Each climate zone has a recommended heating factor: the number of BTUs needed per square foot of your home.

Zone 1: 30 to 35 BTUs (Miami and Houston, for example)
Zone 2: 35 to 40 BTUs (Coastal California and Atlanta, for example)
Zone 3: 40 to 45 BTUs (Virginia and Kansas, for example)
Zone 4: 45 to 50 BTUs (Boston and Chicago, for example)
Zone 5: 50 to 60 BTUs (Buffalo and Minneapolis, for example)

To calculate an approximate size for a new, energy-efficient furnace, multiply your home's square footage by the recommended heating factor. For example, a 2,200 square foot home in Chicago would need a furnace with a BTU rating between 99,000 and 110,000. Of course, many other factors (including insulation, orientation, etc.) will affect this rating. However, this will give you a baseline for comparing different furnace options on the market. For in-depth guidance on how to calculate your home's heat loss and heat gain, check out our Rise Guide.

Should I Trust My HVAC Contractor's Sizing Estimate?

Unfortunately, many residential HVAC installers don't do a heat loss or heat gain calculation to properly size the best furnace for an individual home. Instead, they rely on general calculations based on the age of the house and other generic considerations. This omission generally leads to overestimating the furnace's size to be on "the safe side." As mentioned above, oversized furnaces will not modulate to the highest speed and aren't as efficient as possible.

In the worst-case scenario, contractors will size a furnace based only on the extreme theoretical load. This poor choice will leave homeowners with an oversized furnace that cycles on and off more often than it should and never reached optimal performance.

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What Questions Should I Ask A Furnace Installer?

To make sure that your contractor is doing everything they can to size your furnace correctly, you can ask the following questions:

How did you calculate the proper size for the furnace you recommend?
Did you make a heat loss/heat gain calculation for the home?
What factors were included in this heat load calculation?
Can you provide me a copy of the heat loss/heat gain calculations?
If your home has an alternative or secondary source of heat (such as a wood stove), you might also ask if this factor was taken into account.
What is the AFUE for the furnace?
What is the expected lifespan for the furnace?

What Furnaces Are Most Efficient?

The most energy-efficient furnace for your home will depend on several context-specific factors mentioned in the preceding sections. However, Energy Star-rated furnaces will be up to 11 percent more efficient than standard models. They can save an average of up to $30 in energy costs each year. For even further energy savings, prioritize furnaces that achieve an AFUE rating of 95 or above.

Should You Switch To A Heat Pump?

If you are considering switching out an old furnace (or air conditioner), think about the option of replacing both of them with a heat pump. Heat pumps transfer heat from the interior to the exterior of a home and vice versa to warm or cool your home.

Heat pumps have historically been installed in areas with mild winters. But, newer models are now efficient to temperatures well below zero. As homeowners continue to learn about the benefits of opting for greener homes, heat pumps will continue to grow as an attractive, sustainable way to heat and cool our homes.

The energy savings are far superior over electric baseboard heaters, especially in climates with significant weather variances. Heat pumps will save you money annually. The payback on this energy-efficient investment is often complete in less than ten years.

If you are interested in transitioning to a heat pump for your home's heating (and cooling) needs, check out Rise's complete guide to heat pumps here.

Rise Writer

Expert. Practical. Sustainable.

Article by

Tobias Roberts

Tobias runs an agroecology farm and a natural building collective in the mountains of El Salvador. He specializes in earthen construction methods and uses permaculture design methods to integrate structures into the sustainability of the landscape.

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How Do I Know What Size Furnace I Need?

Design Load

Design load includes fixed details of the home, such as:

Square footage
Average winter temperatures
Insulation levels or capacity
The tightness of the building envelope, and
The orientation of the house to the sun for passive heating benefits

Extreme Load

The extreme load takes the possibility of severe winter cold events into consideration.

Part Load Condition

Heat Loss/Heat Gain

Zone 1: 30 to 35 BTUs (Miami and Houston, for example)
Zone 2: 35 to 40 BTUs (Coastal California and Atlanta, for example)
Zone 3: 40 to 45 BTUs (Virginia and Kansas, for example)
Zone 4: 45 to 50 BTUs (Boston and Chicago, for example)
Zone 5: 50 to 60 BTUs (Buffalo and Minneapolis, for example)

Rise | We've Done the Research

Caddy Advanced CR Wood Furnace

Do You Have The Right Furnace?

Does a Furnace's Age and Efficiency Matter?

When Should a Furnace Be Replaced or Upgraded?

What Do Furnace Efficiencies Mean?

How Do I Know What Size Furnace I Need?

Design Load

Extreme Load

Part Load Condition

Heat Loss/Heat Gain

Should I Trust My HVAC Contractor's Sizing Estimate?

Wood Furnaces

Caddy Advanced CR Wood Furnace

Caddy Advanced Wood Furnace

Drolet Heat Commander Wood Furnace DF02003

Shop the Wood Furnaces

What Questions Should I Ask A Furnace Installer?

What Furnaces Are Most Efficient?

Should You Switch To A Heat Pump?

Tobias Roberts

Do You Have The Right Furnace?

What Do Furnace Efficiencies Mean?

How Do I Know What Size Furnace I Need?

Design Load

Extreme Load

Part Load Condition

Heat Loss/Heat Gain

Should I Trust My HVAC Contractor's Sizing Estimate?

What Furnaces Are Most Efficient?

Should You Switch To A Heat Pump?