AFUE (Annual Fuel Utilization Efficiency) is the standard measure of gas furnace and boiler heating efficiency. It represents the percentage of fuel energy that is converted into usable heat for the home, with the remainder lost through exhaust gases.
A furnace with 80% AFUE converts 80 cents of every dollar spent on natural gas into heat, while 20 cents is lost up the flue. The federal minimum AFUE for new gas furnaces is 80% (78% in some regions). High-efficiency condensing furnaces achieve 95-98% AFUE by recovering heat from exhaust gases that would otherwise be vented.
Upgrading from an old 60% AFUE furnace to a 96% AFUE model reduces heating fuel consumption by roughly 38%, which can save hundreds of dollars annually in cold climates.