I recently replaced our 17-year-old furnace with a new mid-efficiency furnace bought from Costco, of all places. The old furnace was a low-efficiency model (it had a pilot light) and was probably on its last legs (the salesman said the average lifespan of a gas furnace is about 20 years).
It is difficult to say if it is financially smart to replace an old furnace with one that is more efficient. The new furnace cost us about $2,600 or $130 per year, assuming an average life span. Also, I am assuming a 5% return on the lost opportunity costs of buying the furnace. We spent about $1,200 heating our home last year, so I figure that if the furnace consumed about 15% less natural gas, we would come out ahead.
The old furnace has an efficiency rating of 65% compared to 80% for the mid-efficiency model, so we should be saving about 18% in the heating portion of our gas bills. As the product brochure claims that the furnace uses a variable-speed motor that uses two-thirds less electricity than a standard motor, I am hoping that the new furnace delivers some savings on our hydro bill as well.
I am still not convinced that replacing the furnace was a financially smart move, as the definite answer depends on so many unknown variables. But I am sure of one thing: I won’t be worrying about the furnace breaking down in the middle of winter for a long time.