How Upgrading Your Furnace Saves You Money on Your Power Bill

Everyone likes lower utility bills, and the largest utility expense for most households involves heating and cooling. These account for more than half of household energy costs in the U.S., according to the Department of Energy.

It’s no wonder many homeowners look to HVAC upgrades to save money. Personally, I upgraded our 19-year-old system last week. While it’s still too early to report on the energy savings, we’ve noticed an immediate improvement in noise levels and air circulation.

There’s no doubt the energy savings are real, especially when you completely replace your HVAC system. But there are smaller and more affordable steps you can take, as well.

Complete HVAC Replacement Savings

A new HVAC system will almost always be more efficient than a comparable older one. The question is whether it’s worth the upfront cost of the replacement.

Per Energy Star, “Depending on where you live, replacing your old heating and cooling equipment with Energy Star-certified equipment can cut your annual energy bill by nearly $140.”

A good starting point is an online calculator, like this one from Lennox, or this one from Energy Star. But their calculations can vary. They typically use national averages, but a well-insulated single-story home in San Diego will have radically different energy costs (and potential savings) from a drafty Cape Cod on Boston’s South Shore.

Your home’s numbers will depend on the size of the living space, insulation, the local climate and your local energy rates. And that’s not taking any of your own behaviors into account, like how warm or cool you like to keep your home.

Another factor involves the energy your other mechanicals run on. In my case, our gas supplier has a carrier charge. So even if we completely eliminated the gas furnace, we’d still pay $50 a month in gas fees.

At the same time, we’re expecting a nearly 40% price increase from our electrical supplier later this year. Add all that together, and it didn’t make sense to switch to a fully electric system. If your home has a newer HVAC system, it may make sense to hold on to it a little longer.

Furnace Blower Upgrade

In a forced-air system, the furnace generates heat, but the blower distributes warmed air throughout the house. It’s essential for maintaining the proper temperature, and operating it can consume a fair amount of electricity.

Cary Reed, general manager of Service Experts Heating, Air Conditioning & Plumbing, explains it this way: “The three kinds of technology include the standard blower motor, which is the least expensive and also the least energy efficient; constant torque motor, which strikes a balance between cost and energy efficiency; and variable-speed motor, which will quietly operate at a low or medium speed at times to enhance comfort while keeping energy costs low, both in winter and summer.”

A blower upgrade makes sense if you’ll own your furnace for the next five to 10 years, giving you a chance to recoup your investment. If you’re looking to upgrade the full system before then, you may be better off waiting.

Furnace Thermostat Upgrade

A new thermostat, on the other hand, can be used even with a new HVAC system. You can upgrade a thermostat one at any point and start seeing savings quickly.

Reed is also a fan of thermostat upgrades.

“If you’re still using an old manual thermostat, get a programmable model,” he says. “This affordable replacement pays for itself quickly via energy savings by letting you program setback schedules while you’re at work or asleep.

“Automated temperature recovery means you conserve energy without ever dealing with an uncomfortable home. Look for a smart Wi-Fi thermostat you can program remotely for even more opportunities to save.”

Homes with high utility bills, or homes unoccupied for much of the day, will benefit the most from an upgraded thermostat, saving approximately $100 a year according to Energy Star.

I’ve spoken with several homeowners who say smart thermostats make monitoring their energy usage easy, encouraging to their families to adopt energy-saving habits. But if you work from home or already keep a close eye on your thermostat settings, you’re less likely to see a change in your energy bill.

Furnace Filter Upgrade

Furnace filters can reduce energy costs via maintenance and upgrades.

• Maintenance: Replace your filter when needed. Thick mats of dust and hair (not unusual for old filters) are the equivalent of a furnace trying to breathe through a congested nose. It takes much more effort. According to the Department of Energy, replacing a dirty, clogged filter with a clean one can lower your system’s energy consumption by up to 15%.
• Upgrades: For some homeowners, it makes sense to use a filter that allows easier air flow to the furnace. Most filters display a Minimum Efficiency Reporting Value (MERV) rating. The higher the MERV, the more fine particles the filter catches. But a higher MERV also means the furnace needs to work harder to draw air into the blower, making it slightly less efficient. By dropping to a lower MERV filter (in the 5 to 10 range), you can catch most particles while allowing greater air flow. However, homeowners with pets and/or allergies may want to stick with a higher MERV filter. Like most HVAC decisions, the best answer will be unique to your situation.