Understanding SEER & AFUE Ratings

SEER, SEER², AFUE - these letters are everywhere in HVAC marketing. But what do they actually mean for your energy bill?

SEER: Cooling Efficiency

SEER = Seasonal Energy Efficiency Ratio

In plain English: How many BTUs of cooling you get per watt of electricity used.

• Higher SEER = More cooling for less electricity
• Example: 18 SEER means 18 BTUs of cooling per watt

Current Standards (2025)

SEER Rating	Old Name	Efficiency Level
14-15	Budget	Minimum standard
16-17	Standard	Good efficiency
18-19	Efficient	Better efficiency
20+	Premium	Top efficiency

New SEER² Rating

What changed:

• Old SEER (pre-2023): Different testing conditions
• New SEER² (2023+): More realistic testing
• SEER² about 10% lower than old SEER

Example:

• Old 18 SEER ≈ New 16 SEER²
• Old 20 SEER ≈ New 18 SEER²

Translation: Don't compare old and new directly

SEER Impact on Energy Bills

Cool your home 1,000 hours/year:

SEER Rating	Annual Energy	Cost (at $0.15/kWh)
14 SEER²	3,500 kWh	$525
16 SEER²	2,900 kWh	$435
18 SEER²	2,500 kWh	$375
20+ SEER²	2,200 kWh	$330

Jumping from 14 to 18 SEER² saves $150/year

AFUE: Heating Efficiency

AFUE = Annual Fuel Utilization Efficiency

In plain English: What percentage of gas you burn actually heats your home (vs waste up chimney).

• Higher AFUE = More heat from less gas
• Example: 95% AFUE means 95¢ of every dollar spent heats your home, 5¢ wasted

Gas Furnace Standards

AFUE Rating	Efficiency	Age
78-80%	Minimum (old)	15+ years
90-92%	Standard	10-15 years
95%	High-efficiency	5-10 years
96-98%	Premium	Newer systems

AFUE Impact on Heating Bills

Heat your home 1,500 hours/year:

AFUE Rating	Gas Used	Cost (at $1.50/therm)
80% AFUE	1,875 therms	$2,813
90% AFUE	1,667 therms	$2,500
95% AFUE	1,579 therms	$2,368

Jumping from 80% to 95% AFUE saves $445/year

Heat Pump Efficiency

Heat Pumps Use SEER² (Cooling) + HSPF² (Heating)

HSPF² = Heating Seasonal Performance Factor

• Measures: BTUs of heat per watt of electricity
• Higher HSPF² = More heat for less electricity
• Typical: 8.0-10.0 HSPF²

Heat Pump Advantage

vs Gas Furnace + Central AC:

Metric	Gas Furnace (80% AFUE) + AC (14 SEER²)	Heat Pump (18 SEER²)
Annual heating	$2,813	$1,200
Annual cooling	$525	$375
Total annual	$3,338	$1,575
Annual savings	—	$1,763

Heat pump saves $1,763/year in this example

Real Bay Area Impact

Oakland Bungalow Heating (Annual)

Old 80% AFUE furnace:

• Gas use: 60 therms
• Cost: $90/month × 5 months = $450/year

New 95% AFUE furnace:

• Gas use: 50 therms
• Cost: $75/month × 5 months = $375/year
• Savings: $75/year

Heat pump instead:

• Electricity: $100/month × 5 months = $500/year
• Cooling included! (saves summer AC cost)

San Jose Home Cooling (Annual)

Old 14 SEER² AC:

• Electricity: $850/year

New 20+ SEER² mini-split:

• Electricity: $500/year
• Savings: $350/year

Payback Analysis

Furnace Upgrade: 80% to 95% AFUE

• Cost difference: $1,500
• Annual savings: $75
• Payback: 20 years (upgrade for longevity, not ROI)

AC Upgrade: 14 SEER² to 20+ SEER²

• Cost difference: $2,000
• Annual savings: $350
• Payback: 5.7 years (good ROI!)

Heat Pump vs Gas + AC

• Cost difference: $3,000 more
• Annual savings: $1,500-2,000
• Payback: 1.5-2 years (excellent ROI!)

Minimum Efficiency Standards (2025)

New federal minimums:

• Central AC: 15 SEER² minimum
• Gas furnace: 80% AFUE minimum
• Heat pump: 16 SEER² / 7.0 HSPF² minimum

Bay Area preferred:

• AC: 18-20 SEER² (good efficiency)
• Furnace: 95% AFUE (high-efficiency)
• Heat pump: 20+ SEER² (excellent)

What Rating Should YOU Buy?

Budget Option

• AC: 15-16 SEER²
• Furnace: 80-90% AFUE
• Cost: Lowest upfront
• Savings: Minimal

Standard Option ✅ RECOMMENDED

• AC: 17-18 SEER²
• Furnace: 95% AFUE
• Heat pump: 18-20 SEER²
• Cost: Moderate
• Savings: Good (ROI in 5-7 years)

Premium Option

• AC: 20+ SEER²
• Furnace: 96-98% AFUE
• Heat pump: 22+ SEER²
• Cost: Highest upfront
• Savings: Best long-term (staying 15+ years)

Rebate Threshold

Most rebates require MINIMUM efficiency:

• AC: 16 SEER² minimum
• Furnace: 90% AFUE minimum (sometimes 95%)
• Heat pump: 18 SEER² minimum

Example: Budget 15 SEER² AC = NO REBATE

Bottom line: Minimum efficiency + $3,000 rebate is often same price as high efficiency without rebate

Questions About Ratings?

Ask your contractor:

1. What's the minimum efficiency available?
2. Which tier qualifies for rebates?
3. What SEER/AFUE does each price point offer?
4. What will my annual savings be?
5. How long until payback?

Bottom Line

• SEER/SEER²: Measures cooling efficiency (higher = saves money on AC bills)
• AFUE: Measures heating efficiency (higher = saves money on heating bills)
• Higher = Lower energy bills (but more upfront cost)
• In the Bay Area: Prioritize cooling efficiency (used more months)
• For heat pumps: Highest SEER² wins on overall savings

Calculate Your Savings | Call (925) 578-3293