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Home Heating Guide: How to Heat Efficiently and Cut Energy Costs

You should have a solid understanding of your home's heating system — and your options — before you have major heating system components replaced. You may find a less expensive alternative, like air sealing your home, makes your home more comfortable without the need, hassle, and expense of replacing major components.

After reading this guide you'll have a good idea of how your home's heating system works and maybe even how to fix it. You'll know exactly what to tell the technician when he shows up, too. A good, working knowledge of your home's heating system is a good first step before undertaking DIY repairs or calling a certified HVAC technician to have major components replaced.  

How your heating system works

It looks so complicated: a tangle of ventilation ducts and pipes, a noisy furnace or boiler — let alone how old all of it is? Your home's heating system is simpler than it looks. There are only three components that make it all work. Those components are the heat source, distribution, and control system. Let's go over them individually and find out how they work together to keep your home comfortable when it's cold outside.   

Heat source


This is where the magic happens. Your heat source provides hot air for the rest of the system to circulate around your home. The heat source is generally a furnace or, in warmer climates, a boiler. Natural gas and heating oil are the most common forms of fuel used by the heat source. Natural gas heats 57% of American homes, according to the U.S. Energy Information Administration.

We'll cover the different types of heat sources later on in this article.  



If you use your imagination, your home's heating system is like a business that specializes in making your home more comfortable. The heat source is like a factory that produces warm air. The distribution system is like an army of invisible trucks designed to transport the warm air from the heat source to where it needs to go — throughout your home. This task is most often accomplished by forcing air through ducts or with the use of radiators.

Control System


The system must be kept in check. This is accomplished with a thermostat. There are many thermostats available, including advanced models that use the Internet to give you remote control over your home's heating by way of the smartphone in your pocket. 

Central Heating

Systems using furnaces and boilers are often called central heating. This is because the heat is produced and collected in a centralized location before it's distributed to the rest of the home. Alternative methods of central heating include heat pumps and even solar energy. Let's go over a few pros and cons of the various methods.  



Furnaces are versatile, efficient, and inexpensive. Depending on the furnace, your fuel options include natural gas, propane, heating oil, or electricity. They last for between 15 and 30 years. Most furnaces are 50-98.5% efficient, depending mostly on the age of the furnace. New furnaces are much more efficient than older models.

Furnaces and boilers are combustion heating appliances, and their efficiency is measured by dividing the thermal efficiency of the appliance by the fossil fuels the appliance consumes. This measure is known as the appliance's AFUE, which stands for Annual Fuel Utilization Efficiency. For example, a boiler (or furnace) that uses 100 BTUs of fuel to produce 85 BTUs of heat has an AFUE of 85%. Most modern furnaces and boilers have a AFUE of greater than 90%. 

It's important to remember to inspect your furnace filter on a monthly basis and replace it if looks dirty. Failing to replace your filter regularly may tax your system unnecessarily or even create a fire hazard.

The only downside to using a furnace is you may find the blower fan is louder than you would like. That's a small price to pay for one of the most versatile and efficient systems available.



Unlike a furnace, a boiler is subject to freezing temperatures outside. Boilers heat water rather than air, which means your pipes could freeze if temperatures drop too low.

Boilers are 50-90% efficient, as measured in AFUE, depending on the age of the boiler. You should expect a boiler to last between 15 and 30 years. Fuel options include natural gas, propane, heating oil, biodiesel, or electricity. It's easier to practice "zone heating" with a boiler than with a furnace.

The downsides to using a boiler include higher installation costs and the potential for pipes freezing if the temperatures become uncharacteristically low.

Heat pump

A heat pump can provide both heating and cooling if you happen to live in a mild climate. It works by pulling heat from the surrounding air to heat your home. They are often expensive to install. Heat pumps need to be replaced every 15 years.


Using the power of the sun to heat your home reduces your dependence on fuels like heating oil and natural gas. Solar heating is expensive to install and often requires supplemental heating from a different system to maintain the comfort of your home. Expect most systems to last between 15 and 20 years.


Although furnaces and boilers sometimes use electricity, many people rely on electric space heaters for supplemental heating in their homes. Electric resistance heaters are not considered central heating systems, though central heating systems often pick up and distribute the warm air they produce. Space heaters are often more expensive to run than other types of heating unless certain precautions are taken that we'll go over later on in this article. 

Electric space heaters may also present a fire hazard. Always make sure the space around an electric heater is clear. Check cords for fraying or other damage before using an electric space heater. 



Thermostats are fascinating little devices. When the temperature in your home is too hot, the thermostat tells the system to cool its jets. When it's too cold, your thermostat tells the system to heat things up.

If you're like many families, you're away for work or school from 7 AM to 5 PM. Does the house really need to be comfortable during the hours you're not there? A programmable thermostat helps you save money by heating your home when you're actually home.

Just because it's a "programmable" thermostat doesn't mean you need to know anything about programming, or computers, or even your daily schedule to make one work for you.

Many thermostats are designed to learn your habits and then adjust accordingly. According to Energy.gov, installing a programmable thermostat may save you up to 10% on your heating and cooling costs over the course of the year.

Space Heating

If your home is equipped with central heating that doesn't work as well as you expected, you may find yourself using electric heaters for supplemental heating. Although these heaters are extremely efficient, they can sometimes cost much more than gas or oil powered central heating.

According to the Cornhusker Public Power District, running an electric space heater for just 4 hours a day adds an extra $10.80 to your monthly bill. That extra charge adds up over the course of the winter!

If you find yourself running a space heater in more than one room for more than 4 hours a day, consider installing better insulation or a more efficient (i.e. newer) furnace. With that said, we'll discuss ways you can save money with space heaters in the next section. 

Money Saving Strategies

Saving money on heating comes down to using fewer resources to heat your home. There are a variety of different strategies you can use to reduce the cost of heating your home.

Don't heat a home you're not occupying


Your home doesn't need to be a toasty 72 degrees when you're at work, shopping for groceries, or gone for the weekend. There's also little need to set your thermostat higher than 65 degrees while you or your family sleeps.

Only heat the parts of the home you're using

When you are home, there's little point in taxing your heating system to heat parts of the home you're not using. Forced air can often be controlled by closing and opening vents throughout the house. If you do a good job of keeping yourself warm, there's no need to spend a fortune on heating the other parts of the home you're not using.

Make simple adjustments to your home


Before investing in new equipment, try these simple changes to see if they make a difference.

  • Setting ceiling fans to their lowest possible speed moves warm air down from the ceiling, helping to distribute it throughout your living space.

  • If you have hardwood floors, put rugs down to keep the cold from getting to your feet.

  • Use heavy drapes to prevent heat from escaping through windows.

  • Check and replace weather stripping around doors and windows.

  • Check the exterior of your home for any openings you may miss during an interior inspection.

Saving money with personal and space heaters

As we said before, space heaters often add to the cost of heating a home. With that said, there are ways of using them to reduce your heating costs if you're not ready to purchase a new furnace or add insulation to your home.

 If you use a space heater, you must turn your thermostat down to make up for the extra energy the space heater uses. Otherwise your heating bills could be markedly higher, especially if your central heating is old and inefficient.  

Think about it like this. It's much, much easier to keep yourself warm than it is to keep the whole entire house warm. Wearing soft, thick socks around the house ensures your feet stay warm. Wear extra comfy clothing and be sure to keep a few warm blankets within easy reach of your favorite spaces to rest.

If you're still cold, try using an electric blanket to warm up. By wearing the right clothing and using personal heating devices, you may be able to save a significant amount of money by turning your thermostat all the way down.   

Air sealing your home

To be effective, the warm air produced by your home's heating system must stay inside the home. It escapes when your home is poorly insulated. Poor insulation comes from a variety of sources, and it isn't limited to the matting inside your walls. The process of looking for and sealing cracks is often called "air sealing" the home.



Old, single pane windows let plenty of heat escape from your home. But replacing them may not be the best option for saving money on heating, especially if you plan to leave the old insulation in your walls.

According to Energy Star, replacing single pane windows with Energy Star rated windows nets a savings of between $126 and $465 depending on the climate where you live. Replacing double pane windows nets a much smaller savings between $30 and $125 a year. There are easier ways to save $30 a year than replacing perfectly good double pane windows. 

With that said, if you need new windows get new windows. Older homes often need new windows to make them safe and secure, which has little to do with reducing your heating bill.


Over the years door frames sag and become misshapen. Doors become more difficult to close and always feel like they're catching on something. When this happens, small openings between the door and the door frame let precious heat escape from your home.  Short of replacing the door and its frame, you can install a "draft stopper" to keep the cold at bay. There are a variety of products you can use for this purpose. Look for them at your local hardware store.  

Dryer vents

Something as simple as a leaky dryer vent can let heat escape from your home. Make it a habit to check your dryer's ventilation at least every 6 months. Oftentimes all it takes is an inspection and 5 minutes with a screwdriver to cross a leaky or clogged dryer vent off of your honey do list.

Other openings


Everything from doggy (or kitty) doors to mail drops and even garage doors can let valuable heat escape from your home. Make a list of potential drafts and then check them regularly for leaks. Attics, basements, electrical sockets, and chimneys are all good places to check for drafts.

All about insulation


Insulation is the second half of the heating equation. With good insulation, you don't have to purchase as big a furnace or boiler as you would have to purchase in the absence of good insulation. Insulation lets you keep and enjoy more of the heat your system produces. Before investing in a new furnace or boiler, make sure it's the right size given your current insulation situation.

Adding insulation to an existing home

After determining your home is properly air sealed, you may be tempted to add additional insulation to reduce the load on your home's heating system. This is a good idea, but there are a few things you want to watch out for.

 The home energy audit

One of the best ways to find out where your home is losing money is to call in a professional for a home energy audit, also known as an energy assessment. It's a good idea to have a home energy audit done before you move forward with adding insulation to your home or replacing major heating system components.

The auditor will tell you how much and where to add insulation to your home. The auditor will also give you good advice about how big your furnace or boiler should be, whether or not it should be replaced, and what to do in the meantime to save money on your energy bills. The goal of the home energy audit is three fold.

  • Ensure the home is properly air sealed and insulated.

  • Ensure the home uses an appropriately sized heat source.

  • Make recommendations concerning air sealing, insulation, and the heat source that will keep your family warm and comfortable for years to come.

The R-value of insulation

Insulation is designed to resist the transfer of heat. Insulation helps keep warm air in and cold air out. A piece of insulation batting contains millions of tiny air pockets that help resist the flow of heat. The unit of measure for this resistance is called the R-value. Materials with high R-values prevent more heat from escaping than materials with low R-values.

There are Federal laws on the books in the U.S. designed to protect consumers against unlabeled, mislabeled, or poorly disclosed insulation R-values on previously built structures, like your home. You or the professional performing your home energy audit should be able to determine the R-value of the current insulation and whether or not it should be added to or replaced.  

The benefits of proper insulation

Without proper guidance or advice, many homeowners are tempted to go overboard when installing new insulation. When it comes to insulation, it pays to get it right rather than overdo it. There is such a thing as too much insulation. Too much insulation adds to the initial cost of installation and may result in a system with an improperly sized furnace or boiler.

The opposite is also true. If your home is not properly insulated, an HVAC tech is likely to tell you to take care of insulation before attempting to size a replacement furnace. Properly insulated homes require much smaller heat sources than homes with old, sagging insulation. Using a smaller furnace reduces the cost of initial installation as well as fuel costs over the life of the system. 

Bringing everything together

To recap, your home's central heating system produces and distributes warm air throughout your home.

A programmable thermostat gives you precise control over the system.

Space heaters provide additional heat but may raise the cost of heating your home, especially if you run them at the same time as your central heating system. It's a good idea to set the thermostat to a lower temperature if you're using electric space heaters in your home.

Producing and distributing the heat is only the first half of the equation. The other half is making sure you keep and enjoy more of the warm air your system produces. This is accomplished through properly air sealing and insulating your home. A home energy audit helps determine where insulation should be added and whether or not your heat source is properly sized.

A home with proper insulation allows you to use a furnace — or other heat source — that's just the right size. This saves you money both on initial installation and the cost of running the system for years to come.