Furnace replacement

Q: Does it make sense for me to replace my furnace? The one I have now is 21 years old and rated to operate at 85% efficiency. I'm receiving subtle pressure from the furnace maintenance folks to replace the old furnace with a higher efficiency model that's supposed to achieve 92% to 96% efficiency. Trouble is, the job will cost $5000. Does it makes sense?

A: Unless there's some expensive problem with your current furnace, I'd stick with what you've got for a while. Here's why:

Let's say you spend $2,000 a year on gas for heating (it might not be this much, but a high number makes for a more conservative calculation in this case). Replacing your current furnace (85% efficient) with a new model (92% to 96% efficient) will cut 7% to 11% off your current gas bill. That works out to an annual savings of $220 at best. (It'll be even less if you spend less than two-grand a year on heat.) Spending $5000 on a new furnace to realize $220 a year in energy savings is less than a 5% payback - not worth it in my book. If your home is like many, investing $1000 into more attic insulation will yield a much bigger payback, while being easier on the environment and leaving $4000 in your pocket. Replacing a very old and inefficient furnace often does make sense financially (especially when something big has gone wrong), but the one you've got is still too efficient for that to make sense.