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Replace Your Heating System with
If you currently have a gas or oil heating system, the decision is based upon the efficiency of the existing system and how much you could improve it.
Now, use this chart to compute the annual dollar savings per $100 of annual fuel cost. Cross index the AFUE of your existing system on the vertical axis with the AFUE of the high-efficiency system on the horizontal axis:
55% 60% 65% 70% 75% 80% 85% 90% 95% 50% $9 $16 $23 $28 $33 $37 $41 $44 $47 55% $8 $15 $21 $26 $31 $35 $38 $42 60% $7 $14 $20 $25 $29 $33 $37 65% $7 $13 $18 $23 $27 $32 70% $6 $12 $17 $22 $26 75% $6 $11 $16 $21 80% $5 $11 $16 85% $5 $11
The savings on this chart were calculated before the gas price increased almost 4 times !
For example, if your present AFUE is 65% and you plan to install a high-efficiency gas heating system with an AFUE of 90% (called 90 +), then the projected savings is $27 per $100 of fuel bills. If your annual fuel bill in this case were $1300, the total annual savings due to switching to the more efficient model would be $27 x 13 = $351.That's a lot of money to save each year, but how does it compare to the
investment you need to make to install the new heating system? One way to
determine whether or not it is a good investment to purchase the new system is
to calculate the annual Return on Investment (ROI): the percentage of your
initial investment you will recover each year over the lifetime of the heating
system, which should be at least 25 years. The ROI can be calculated as the
annual savings divided by the initial cost. In our example, if the new system
cost $2500 including installation, the ROI would be:
In other words, the initial $2500 investment saves $351 per year, which is equivalent to a 14% ROI. This compares favorably to other investments such as savings accounts or certificates of deposit. But, unlike other investments, energy conservation investments are tax free. And if fuel prices go up, the annual savings and ROI go up as well at no additional cost to you. For instance, if fuel prices in our example increased 30%, annual savings would increase to $456 and the ROI would increase to 18%. There is more information on other methods of calculating the economic value of energy conservation investments in the Consumer Guide to Home Energy Savings.
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