Cost Benefit Analysis of a High Efficiency Gas Furnace

[Another Reader]

My almost 25 year-old gas furnace is nearing the end of its' life, or will at least need significant repairs to get through the winter.  It looks like the incremental cost to get the highest efficiency furnace is substantial.  Has anyone had to replace a gas furnace and if so, where did you end up on the efficiency scale?  Is repairing an older 70 percent efficient furnace a better plan?  This furnace is in a relatively mild climate (SF Bay Area).

[TomTX]

Don't just look at the two extremes. What does a "standard" new furnace cost? What's the efficiency? How about a moderate upgrade?

You don't have to choose between current broken-down-crap and top-of-the-line.

[Forcus]

I had the same dilemma. What I did was scoured CL for a furnace and A/C that was newer. I got lucky. Someone had a 3 year old home and decided to go geothermal because of the tax credits. I scored a like new medium grade HVAC system for about 20% of the cost of new. The downside is that depending on your area, some HVAC guys won't want to touch used stuff or R&R (remove and replace). And of course, the hassle of moving units around, etc. But around here a new low end HVAC system is about $5k installed so it was worth it to me.

[gecko10x]

In a mild climate, wouldn't it make more sense to go with a heat pump?

[Another Reader]

Heat pumps are not common here because gas has always been so much cheaper than electricity.  Also, not everyone has A/C, although it is more common now in the hotter areas south and east of San Francisco.

[sibamor]

According to the 2008 Consumer Reports Buying Guide, an annual volume published by the editors of ConsumerReports.org, "increased efficiency is not usually an economically valid reason" to replace an old furnace that is still in good working order. Experts generally recommend replacing your old furnace if any of the following apply: it's more than 15 to 20 years old; it has a pilot light rather than electronic or hot-surface ignition; it does not have vent dampers or a draft fan; it is a coal-burning model that has been converted to gas or oil.

Replacing your old furnace is already the best course of action.  Now I assume you are debating the difference between an 80 percent and 90 percent AFUE (annual fuel utilization efficiency).

Usually for milder climates they recommend 80% AFUE.  You are looking at usage rate on days per year needing heating, and BTU usage on heating days. I see the draw of the 90% AFUE systems but you need to look at the incremental cost/day.  Analyze your the break even point for (purchase+fuel usage) for the 80 and 90 over a given period of 3/5/7 year timeframe.

[Another Reader]

The choices are wide.  Efficiencies vary between the 80 percent mandated minimum and the high 90's.  You can buy single speed, dual speed, or variable speed.  The price range is even wider.

Consumer Reports generally offers rules of thumb that are somewhat helpful, but in this case their statement that the furnace brands are about equal contradict everything else I have read.

The fan now won't shut off after the heat cycle (runs continuously), so a decision to repair or replace will have to be made soon.  Sigh....

[TomTX]

Heat pumps are not common here because gas has always been so much cheaper than electricity.  Also, not everyone has A/C, although it is more common now in the hotter areas south and east of San Francisco.

And gas will continue to be cheaper than electricity in the USA, at least for another 5 years, more likely 10.

Fracking for gas and oil has made natural gas superabundant, and until the LNG* import plants are converted to LNG export plants (the plans are to spend $4-10 BILLION per plant) - there is not nearly enough market for all that gas.

Natural gas power plants are being built, but it takes a long time to make a major shift in power production method.

*Liquefied Natural Gas. Pretty much a requirement to compress/chill the gas until it liquifies if you want to send it by ship instead of pipeline.

[Another Reader]

OK, with all the tax, permits and ducting (for the condensing 95 percent furnace), the cost difference between the 95 percent and 80 percent efficient furnace is $1,964.  After a $150 rebate from PG&E, the net difference is $1,814.  It looks like the annual heating cost for the house is around $600, based on eyeballing the 2010 and 2011 bills for the heating season.  Natural gas is pretty cheap right now, so I guess this would be the "worst case" savings scenario.  It looks like I'm going to save a little less than 20 percent of the annual hearing cost by going with the 95 percent efficient furnace over the 80 percent.  At best, we are talking about $120 a year.  That's a 15 year payback period.

To be fair, the comparison is between an 80 percent efficient single speed furnace and a 95 percent efficient variable speed furnace.  The sales claim for the variable speed furnace is that it produces a more even temperature throughout the house and it saves on the electrical cost of operating the fan.  Uneven temperature is a huge problem in this house, because of the sprawling single story ranch design.  I always blamed the duct work for that problem.  However, I have never crawled under the house to inspect the ducts, so my assumption could be wrong.  Correcting the temperature variance with the furnace run time makes some sense, but I can't find any info on-line supporting this claim.

Anyone have specific knowledge of this subject or had a recent positive or negative experience replacing a gas furnace?

[TomTX]

I bet that you could get better temperature control by

1) Sealing all wall/ceiling perforations (outlets, lights, pipes, et cetera.) If you're moderately handy, pull off window trim first and use that canned spray-foam to fill the gaps between the rough-in and the window.

2) Sealing (and insulating if they're not already) and logically organizing your ductwork. Virtually all of my (flexible) ducts had an extra 4-6 feet snaking around for no reason, other than the installers were too lazy to cut off the standard 25-foot length. If you have rigid ductwork, your optimization is more likely to be insulating and sealing.

3) Optimizing your attic insulation. Even a small area which is poorly insulated drastically increases total heat flow.

Way cheaper than a high-end furnace if you do it yourself.