Steps to take before investing in a new furnace
By Kamil Skawinski • Bankrate.com

To save the most dollars, you should first make your home weather-tight and then purchase and install a properly sized high-efficiency heating unit, says Jim Maletta, owner of North Star Energy Consulting LLC of West Allis, Wis.

"What's most often needed is insulation and air-sealing work done in a house to eliminate any excessive heat loss, especially when you're dealing with an older property," says Maletta.

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Add sufficient attic and wall insulation, eliminate drafts from poorly sealed windows and doors, and seal leaky ductwork before replacing the furnace, he says. This will greatly reduce the load that's ultimately placed on the new heating unit.

"Then when you replace your old unit, you can actually downsize that new unit -- meaning you can put in a smaller furnace than the one you had before -- both saving money on the initial cost of the replacement furnace and assuring that it will be running at maximum efficiency, since it will not be oversized," says Tom Wilson, owner of Viroqua, Wis.-based Residential Energy Services.

If you replace an inefficient furnace first and later choose to insulate and air-seal, your new unit could end up being oversized for your heating requirements, he says. The subsequent short-cycling it then experiences could partially negate the savings that you might gain from installing an otherwise high-efficiency model.

Electricity a factor
Your home is well-insulated and weather-tight, and you've talked to a qualified consultant or heating contractor. You've decided to take the plunge and buy a replacement furnace. What factors should you consider before making the new purchase?

One is that gas-savings is only part of the equation. "A furnace can also use a significant amount of electricity, mostly to power the fan motor that moves air through your house," says Randy Novak, president of Novak Heating and Air Conditioning, a 70-year-old company specializing in residential and light commercial HVAC in Cedar Rapids, Iowa.

Electricity usage isn't part of the Annual Fuel Utilization Efficiency, or AFUE, rating, so to maximize efficiency, you need to take that into consideration, he says.

Furnaces with variable-speed direct current, or DC, fan motors are generally more efficient than units outfitted with standard electric, or "PSC," motors. If you intend to run the furnace fan continuously to filter air in your home throughout the winter, an efficient variable-speed DC motor could save you hundreds of dollars in electricity per year. The electrical efficiency of the furnace can be important for both heating and air conditioning in most homes, because both rely on the electric blower motor used by the furnace.

"But not every two-stage or variable-speed furnace uses DC motors," says Novak. "So you have to pay attention to product specifications when shopping."