What is AFUE? Energy Efficiency Ratings Explained

What is AFUE?

AFUE stands for annual fuel utilization efficiency and measures the efficiency of how a furnace, boiler, or water heater converts fuel into heat.

AFUE is measured on a scale of 0-100%. The higher the percentage, the higher the efficiency of the heating system.

The formula to calculate AFUE is the total heat output of the system divided by the total energy input during a specific time period.

AFUE = Total Heat Output / Total Energy Input

What is the highest possible AFUE rating?

AFUE is measured on a scale up to 100%, but it’s not possible to have a system achieve a score of 100%. The highest possible AFUE rating varies depending on the fuel used to generate heat in the type of furnace.

Oil-fired furnaces peak around 95% efficiency
Gas-fired furnaces may reach efficiencies up to 98-99%
Electric furnaces have the highest ratings that reach close 100%

Fuel	Maximum AFUE Rating
Oil	95%
Gas	98-99%
Electric	99%+

What is considered a good AFUE rating?

Depending on where you live, the AFUE rating required to ensure efficient and comfortable heating varies. Regions with colder weather will want higher efficiency systems than regions with warmer weather.

Generally, a standard AFUE rating lands between 80-85%. These systems are less expensive to install, but can lead to higher fuel costs (like higher gas or electric bills) over time.

Furnaces, boilers, or water heaters with ratings between 86-90% AFUE would be considered high efficiency. Systems with these ratings find a good balance between upfront installation cost and long-term operational costs.

Heating systems with AFUE greater than 91% AFUE are ultra-high efficiency. These are the most energy efficient and environmentally friendly. Ultra-high efficiency heaters are the most expense to install but have the lowest fuel costs for operation over time.

Efficiency	AFUE Rating
Standard Efficiency	80-85%
High Efficiency	86-90%
Ultra-High Efficiency	91%+

What AFUE do you need in Texas?

Texas is a huge state with widely varying climates, as a result the level of furnace efficiency you should aim for in your home will depend on where you live.

In you live in central or south Texas in cities such as Austin, Houston, Corpus Christi, or McAllen, it would not be recommended to purchase and install an ultra-high efficiency heating system. Because winters here are milder, you can get by with a furnace, boiler, or water heater with a standard AFUE rating.

If you live on the north end of the state, especially in areas of west Texas such as Lubbock or Amarillo, where winters can be more frigid you may want to consider investing in a high efficiency system with a rating between 86-90%.

Looking for lower electric bills?

Homeowners interested in lowering their winter electric bills can look to upgrading their furnace efficiency, but they can also look at changing their electricity provider.

By switching to BKV Energy, you can secure an affordable fixed rate plan that may save you up to $800 per year or more. Enter your zip code to get started.

Written by Graham Lumley

Graham Lumley is the Growth Product Manager at BKV Energy, a retail electricity provider in Texas' deregulated market, where he has worked since 2023. He analyzes customer usage and billing data, helps develop BKV's fixed-rate plans, and creates tools to simplify Texas electricity shopping. He has written over 200 articles on Texas electricity rates, delivery charges, plan types, energy generation, and more to help Texans understand their bills and pay less. With over 10 years of experience in consumer products, marketing, and energy, he explains the Texas electricity market in plain language.