The Facts

Annual Fuel Utilization Efficiency (AFUE) - a furnace rating that represents the percentage of heat produced for every dollar of fuel consumed. The current minimum is 78% AFUE

Seasonal Energy Efficiency Ratio (SEER) - is a measure of a central air conditioner's efficiency and performance or how much electricity it consumes. Typical SEER ratings range from 13 to 18.

Heating Seasonal Performance Factor (HSPF) - is the heating efficiency rating for heat pumps. The current minimum is 7.7 HSPF

Energy Efficiency Ratio (EER) - This is a measure of the instantaneous energy efficiency of cooling equipment. EER is the steady-state rate of heat energy removal (e.g., cooling capacity) by the equipment in Btuh divided by the steady-state rate of energy input to the equipment in watts. This ratio is expressed in Btuh per watt (Btuh/watt). EER is based on tests performed in accordance with AHRI 210/240 (formerly ARI Standard 210/240).

Tax Credits for Qualified HVAC Products

Tax credits are are now available for home improvements:

  • must be "placed in service" from January 1, 2009 through December 31, 2010
  • must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes and rentals qualify)
  • $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
  • must have a Manufacturer Certification Statement to qualify
  • for record keeping, save your receipts and the Manufacturer Certification Statement
  • improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
  • If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.

How Much You'll Save

  • According to the EPA, installing a programmabel thermostat with save you approximately $150 a year. The ideal temerature setting is 78 degrees Fahrenheit.
  • Heating & Cooling Total Annual Savings: Heating=$306; Air Conditioning=$43
    • Upgrading your gas furnace to Energy Star-labeled unit with an AFUE rating of at least 90
    • Upgrade central air conditioner to Energy Star-labeled unit with SEER rating of at least 12
    • Upgrade insulation to DOE-recommended levels
    • Seal leaks in building shell to reduce air infiltration
    • Replace windows with low-emissivity, argon-filled units
    • Insulate and seal forced air heating and cooling ducts
    • Install an Energy Star-labeled programmable thermostat
  • Hot Water Total Annual Saving: $63
    • Upgrade gas water heater to unit with Energy Factor = 0.66 or higher