How to Save Money When Buying Electric Heating Boilers

25, Aug. 2025

 

Furnaces and Boilers | Department of Energy

A central furnace or boiler's efficiency is measured by annual fuel utilization efficiency (AFUE). The Federal Trade Commission requires new furnaces or boilers to display their AFUE so consumers can compare heating efficiencies of various models. AFUE is a measure of how efficient the appliance is in converting the energy from fuel to heat over the course of a typical year.

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Specifically, AFUE is the ratio of the furnace's or boiler's annual heat output compared to its total annual fossil fuel energy consumed. An AFUE of 90% means that 90% of the energy in the fuel becomes heat for the home and the other 10% escapes up the chimney and elsewhere. AFUE doesn't include the heat losses of the duct system or piping, which can be as much as 35% of the energy for output of the furnace when ducts are located in the attic, garage, or other partially conditioned or unconditioned space.

An all-electric furnace or boiler has no flue loss through a chimney. The AFUE rating for an all-electric furnace or boiler is between 95% and 100%. The lower values are for units installed outdoors because they have greater jacket heat loss. However, despite their high efficiency, the higher cost of electricity in most parts of the country makes all-electric furnaces or boilers an uneconomic choice. If you are interested in electric heating, consider installing a heat pump system.

Read about the standards for residential furnaces.

You can identify and compare a system's efficiency not only by its AFUE but also by its equipment features.

Older, low-efficiency heating systems:

  • Natural draft that creates a flow of combustion gases
  • Continuous pilot light
  • 56% to 70% AFUE.

Mid-efficiency heating systems:

  • Exhaust fan controls the flow of combustion air and combustion gases more precisely
  • Electronic ignition (no pilot light)
  • Compact size and lighter weight to reduce cycling losses
  • Small-diameter flue pipe
  • 80% to 83% AFUE.

High-efficiency heating systems:

  • Condensing flue gases in a second heat exchanger for extra efficiency
  • Sealed combustion
  • 90% to 98.5% AFUE.

Although older fossil fuel furnace and boiler systems have efficiencies in the range of 56% to 70%, modern conventional heating systems can achieve efficiencies as high as 98.5%, converting nearly all the fuel to useful heat for your home. Energy efficiency upgrades and a new high-efficiency heating system can often cut your fuel bills and your furnace's pollution output in half. Upgrading your furnace or boiler from 56% to 90% efficiency in an average cold-climate house will save 1.5 tons of carbon dioxide emissions each year if you heat with natural gas, or 2.5 tons if you heat with oil.

If your furnace or boiler is old, worn out, inefficient, or significantly oversized, the simplest solution is to replace it with a modern high-efficiency model. Old coal burners that were switched over to oil or gas are prime candidates for replacement, as well as natural gas furnaces with pilot lights rather than electronic ignitions. Newer systems may be more efficient but are still likely to be oversized, and can often be modified to reduce their operating capacity.

Before buying a new furnace or boiler or modifying your existing unit, it is suggested that you first improve the energy efficiency of your home by adding insulation and/or new energy-efficient windows, then have a heating contractor size your furnace. Energy-efficiency improvements will save money on a new furnace or boiler, because you can purchase a smaller unit. A properly sized furnace or boiler will operate most efficiently, and you'll want to choose a dependable unit and compare the warranties of each furnace or boiler you’re considering.

When shopping for high-efficiency furnaces and boilers, look for the ENERGY STAR® label. If you live in a cold climate, it usually makes sense to invest in the highest-efficiency system. In milder climates with lower annual heating costs, the extra investment required to go from 80% to 90% to 95% efficiency may be hard to justify. However, keep in mind that higher efficiency units will have lower emissions than units in the 80% range. 

Specify a sealed combustion furnace or boiler, which will bring outside air directly into the burner and exhaust flue gases (combustion products) directly to the outside, without the need for a draft hood or damper. Furnaces and boilers that are not sealed-combustion units draw heated air into the unit for combustion and then send that air up the chimney, wasting the energy that was used to heat the air. Sealed-combustion units avoid that problem and also pose no risk of introducing dangerous combustion gases into your house. In furnaces that are not sealed-combustion units, back drafting of combustion gases can be a big problem.

High-efficiency sealed-combustion units generally produce an acidic exhaust gas that is not suitable for old, unlined chimneys, so the exhaust gas should either be vented through a new duct or the chimney should be lined to accommodate the acidic gas (see the section on maintaining proper ventilation below).

Properly functioning chimney systems will carry combustion byproducts out of the home. Therefore, chimney problems put you at risk of having these byproducts, such as carbon monoxide, spill into your home.

Most older furnaces and boilers have natural draft chimneys. The combustion gases exit the home through the chimney using only their buoyancy combined with the chimney's height. Natural draft chimneys often have problems exhausting the combustion gases because of chimney blockage, wind or pressures inside the home that overcome the buoyancy of the gases.

Atmospheric, open-combustion furnaces and boilers, as well as fan-assisted furnaces and boilers, should be vented into masonry chimneys, metal double-wall chimneys, or another type of manufactured chimney. Masonry chimneys should have a fireclay, masonry liner or a retrofitted metal flue liner.

Many older chimneys have deteriorated liners or no liners at all and must be relined during furnace or boiler replacement. A chimney should be relined when any of the following changes are made to the combustion heating system:

  • When you replace an older furnace or boiler with a newer one that has an AFUE of 80% or more. These mid-efficiency appliances have a greater risk of depositing acidic condensation in chimneys, and the chimneys must be prepared to handle this corrosive threat. The new chimney liner should be sized to accommodate both the new heating appliance and the combustion water heater (if present) by the installer.
  • When you replace an older furnace or boiler with a new 90+ AFUE appliance or a heat pump. In this case, the heating appliance will no longer vent into the old chimney, and if the combustion water heater is present it will now vent through an oversized chimney. This oversized chimney can lead to condensation and inadequate draft. The new chimney liner should be sized for the water heater alone, or the water heater in some cases can be vented directly through the wall.

How Energy-Efficient Boiler Upgrades Save You Money

Did you know that an energy-efficient boiler can achieve efficiency ratings of up to a whopping 90%? That means less fuel wasted, reduced carbon emissions, and lower heating bills for your home. But it’s not just about the savings on your monthly energy costs. You’ll also spend less on boiler maintenance and could even qualify for government incentives and rebates to offset the initial costs of the upgrade. So, why wouldn’t you want to explore this avenue to save money and contribute to environmental sustainability? Let’s investigate and discover the financial benefits waiting for you.

Understanding Energy Efficiency

To grasp the concept of energy efficiency, you must first understand that it’s all about minimizing the amount of energy required to perform a specific task or function. Regarding boilers, energy efficiency is measured by the ratio of the energy output to the energy input. You’re aiming for a high output with the lowest possible input.

Think of it like this: if you’re making a cup of tea, an energy-efficient kettle would heat your water to the perfect temperature using the least electricity. Boilers work the same way but on a larger scale. An energy-efficient boiler will heat your home to the desired temperature using less gas or electricity.

Manufacturers have developed several technologies to increase boiler efficiency. These include condensing boilers, which capture and reuse heat that would otherwise be lost, and modulation, in which the boiler adjusts its output based on demand.

Remember, though, that energy efficiency isn’t just about the boiler. It’s also about how well your home is insulated and how you use your heating system. You won’t achieve maximum energy efficiency without cranking up the heat while leaving all your windows open.

The Cost of Old Boilers

Over time, your old boiler can become a major drain on your finances due to its low energy efficiency and frequent need for repairs. You need to consider not just the upfront cost but also the ongoing expenses. The inefficiency of older boilers often translates into higher energy bills as they struggle to maintain ideal temperatures. They’re wasteful, using more fuel to produce less heat.

Additionally, those costs can quickly accumulate if you constantly call a technician for repairs. Older boilers have more wear and tear, leading to more frequent breakdowns. The need for replacement parts and the labor involved in repairs can be quite expensive.

Let’s not forget about the environmental cost. Older boilers produce more carbon emissions, contributing to environmental degradation—inefficient fuel burning increases carbon dioxide production and other harmful greenhouse gases.

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You also need to consider the potential cost of a full system breakdown. If your boiler fails in the middle of winter, the cost of emergency repairs or a replacement can be steep, not to mention the discomfort and inconvenience.

In short, sticking with an old boiler can prove costly. It’s a classic case of a false economy, where the true costs can dwarf perceived savings.

Energy-Efficient Boiler Options

Given the steep costs associated with old boilers, upgrading to energy-efficient boiler options can be an innovative and eco-friendly choice. There is a wide range of energy-efficient boiler options, and it’s important to evaluate your specific needs and circumstances when selecting.

Condensing boilers are an excellent choice. They operate by recovering heat usually wasted from the flue gases, resulting in higher efficiency levels and less energy wasted. These boilers can deliver an impressive efficiency rate of up to 90%.

Another option is the combination (combi) boiler. It combines a high-efficiency water heater and a central heating boiler into one unit. This means you don’t need a separate hot water storage cylinder, simplifying your heating system and saving space.

A system boiler is another energy-efficient option. It directly heats your central heating system and produces hot water for a storage cylinder. It’s particularly effective if you’ve got more than one bathroom in your home.

Lastly, consider a biomass boiler. It’s a more sustainable and renewable choice, powered by wood pellets, chips, or logs. While the initial costs may be high, the long-term savings can be significant.

Initial Costs Vs. Long-Term Savings

While the initial outlay for an energy-efficient boiler might be intimidating, the long-term savings will likely offset this cost, making it a sound investment in the long run. However, understanding the balance between the upfront costs and long-term savings is essential.

Let’s break down some key factors that play into this cost-benefit analysis:

  • Energy Efficiency: Energy-efficient boilers use less fuel than traditional boilers, reducing energy costs.
  • Maintenance Costs: These boilers often require less maintenance, which can further lower your expenses over time.
  • Life Expectancy: Energy-efficient boilers typically have a longer lifespan, meaning you won’t need to replace your boiler as often.
  • Government Incentives: When you install an energy-efficient boiler, you might be eligible for tax credits or rebates, which can help offset the initial investment.
  • Environmental Impact: While not a direct financial savings, reducing carbon emissions significantly contributes to long-term sustainability.

Therefore, while the initial costs might be higher, the long-term savings and benefits make energy-efficient boilers a worthwhile investment. The key is to evaluate the immediate costs, overall value, and savings over time.

Impact on Heating Bills

Beyond the long-term savings and environmental benefits, you’ll also notice a significant impact on your monthly heating bills when you upgrade to an energy-efficient boiler. This type of boiler is specifically designed to use less fuel, thereby reducing the costs associated with heating your home or business. As a result, you’ll see a decrease in your energy bills immediately after installation.

The amount you save on heating bills will vary depending on your usage and the efficiency of your previous system. However, energy-efficient boilers can reduce your energy usage by up to 30%, leading to substantial yearly savings.

Furthermore, energy-efficient boilers offer consistent heating performance. This means you won’t have to crank up the heat to compensate for cold spots, which can lead to increased energy usage and higher bills.

Additionally, these boilers ‘learn’ your heating habits and adjust their output accordingly, maximizing efficiency and reducing costs. They also have precision controls that allow you to manage your heating more effectively, contributing to lower bills.

Environmental Benefits of Upgrades

Another compelling advantage of upgrading to an energy-efficient boiler is reducing your carbon footprint. By making this switch, you’re not just saving money, but you’re also contributing to the global effort to combat climate change. This new type of boiler uses less energy, leading to fewer carbon emissions and a healthier environment.

Here are five key environmental benefits of making the switch:

  • Reduced Greenhouse Gas Emissions: Energy-efficient boilers produce less carbon dioxide and harmful greenhouse gases.
  • Lower Energy Consumption: These boilers use less energy to heat your home, so less fossil fuel is burned.
  • Decreased Air Pollution: Fewer emissions mean better air quality, which benefits everyone’s health.
  • Conservation of Natural Resources: Using less energy means conserving more natural resources, such as coal, oil, and gas.
  • Positive Impact on Ecosystems: Reduced pollution and resource conservation can help protect and preserve diverse ecosystems.

Government Incentives and Rebates

Government incentives and rebates are often available when you upgrade to an energy-efficient boiler. Various federal, state, and local programs encourage energy-efficient improvements to your home. These incentives reduce the initial cost of upgrades, making them more affordable and attractive.

In the U.S., the Department of Energy (DOE) offers rebates on energy-efficient appliances, including boilers. You’ll also find numerous state-specific programs. For instance, the New York State Energy Research and Development Authority (NYSERDA) provides rebates for high-efficiency heating equipment.

Moreover, tax credits are another form of incentive you can benefit from. For instance, the Residential Energy Efficiency Tax Credit allows you to deduct a portion of the cost of energy-efficient improvements from your federal income tax.

Remember, these programs often have specific eligibility criteria, so it’s essential to understand the requirements. You’ll need to verify your chosen boiler meets the energy efficiency ratings stipulated. Additionally, some incentives might require professional installation. As a result, it’s advisable to consult with a qualified energy auditor or contractor before proceeding. By doing so, you’ll be able to make the most of these government incentives and save money on your boiler upgrade.

Improved Home Value

While government incentives can make an energy-efficient boiler more affordable, this upgrade can increase your home’s value. Let’s consider why.

  • Energy Efficiency: Today’s buyers are more environmentally conscious. They’re looking for homes that help reduce their carbon footprint. An energy-efficient boiler is a significant selling point, as it lessens energy consumption.
  • Lower Utility Bills: Energy-efficient boilers use less power to run, bringing down monthly utility bills. Prospective buyers will appreciate the savings they’ll make in the long run.
  • Modern Technology: Newer boilers feature advanced features and technology. This modernization appeals to buyers, as it aligns with their need for convenience and efficiency.
  • Compliance with Regulations: As governments move towards stricter energy efficiency regulations, having an upgraded, compliant boiler can improve your home’s marketability.
  • Longer Lifespan: Energy-efficient boilers are designed to last longer than their traditional counterparts. This longevity translates into less frequent replacements, which future homeowners will find attractive.

Maintenance Costs for New Boilers

When considering the switch to an energy-efficient boiler, it’s essential to factor in the maintenance costs. These boilers are designed to reduce maintenance expenses markedly compared to traditional models. They’re built with advanced materials and technologies that increase their lifespan and decrease the frequency of repairs.

Energy-efficient boilers often have self-diagnostic systems that alert you to potential issues before they become substantial problems. This early detection can save you a great deal in repair costs. Plus, the boilers’ high-quality components generally last longer, so you won’t have to replace parts as often.

Moreover, these boilers’ efficiency means they’re less likely to suffer from wear and tear caused by overworking, a common issue with conventional models. This reduced strain on the system further diminishes the need for costly repairs.

Annual servicing costs also tend to be lower. Routine check-ups are quicker and easier, thanks to the boiler’s streamlined design and accessible components.

Making the Switch: Steps to Upgrade

Considering the lower maintenance costs of energy-efficient boilers, you might now be ready to make the switch; let’s walk through the steps to upgrade.

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