If you’re shopping for a new energy-efficient HVAC system, you may have heard or seen the term combined annual efficiency (CAE) and wondered what it means.

CAE measures the amount of heat a unit produces in relation to each dollar spent on the fuel to produce that heat. The term applies to heating both the air and water in your home. Knowing what CAE is may be of special interest if you plan a new furnace installation or heat pump installation.

Think of the CAE of a heating unit as measuring the cost-effectiveness of the unit. You want to get the largest heating capability while spending the least amount of money on electricity, natural gas, or propane. 

That’s a lot of acronyms - but bear with us, because learning what they all mean can help you make a smart decision when you choose a new unit to heat your home. CAE is closely related to the annualized fuel utilization efficiency (AFUE) of a furnace and the heating seasonal performance factor (HSPF2) of a heat pump.

The AFUE of a furnace is a measurement of how efficiently the furnace converts fuel (natural gas, oil) to heat. The percentage in an AFUE rating means how much of the fuel’s energy goes towards heating your home versus being lost through furnace inefficiencies such as exhaust pipes. The higher the AFUE number, the more efficient the furnace is. That helps you save money and it’s better for the planet.

You want to opt for the most efficient unit you can afford if you want to see long-term savings on heating costs.  Currently, the minimum AFUE standard for new furnaces is 80% AFUE, while high-efficiency furnaces have an AFUE of 90% and higher. 

Browse Trane furnaces ranging from 80-97% AFUE.

The HSPF2 of a heat pump measures how efficiently a heat pump can heat your home during the colder months. In 2023, the Department of Energy (DOE) increased the requirements for heat pump efficiency. All split-system heat pumps must have an HSPF2 of 7.5 or higher, and all single-packaged heat pumps must have an HSPF2 of 6.7 or higher. 

Similar to a furnace’s AFUE, the higher the HSPF2 rating, the more efficient the heat pump is at heating your home.

Browse Trane heat pumps ranging from up to 7.8 -8.7 HSPF2.

As you can see, the higher the AFUE or HSPF2, the higher your combined annual efficiency will be when heating your home. Choosing a more efficient furnace or heat pump can result in:

• Energy savings and cost reduction
• Reduced environmental impact
• Improved comfort
• Federal tax credit eligibility for qualifying products.

The trick is to find quality HVAC products offering maximum energy efficiency and installed by industry experts.

Need help finding the right furnace or heat pump for your home? Consult with a local Trane Comfort Specialist to get energy-efficient HVAC product recommendations tailored to your home and your budget.