A Guide to Efficiency Ratings for HVAC Units

HVAC efficiency ratings, SEER2 (cooling), HSPF2 (heat-pump heating), AFUE (furnaces), and EER2 (peak cooling), measure how much usable heating or cooling a system delivers per unit of energy. Higher numbers mean lower energy bills. Since 2023 the DOE uses the "2" versions, tested under real-world duct conditions.

When you’re shopping for a new HVAC unit, cost is always a concern. That being said, you can’t ignore the other set of numbers! Understanding efficiency ratings is just as important as comparing price tags.

In this Discount HVAC Buying Guide, we’ll break down how HVAC efficiency ratings work in simple terms so you’ll have the knowledge to choose the best equipment. You’ll be able to determine which ones give you the right type of performance with meaningful energy savings. That balance is how you can make your upfront investment really count!

Key Takeaways

• HVAC efficiency ratings tell you how much heating or cooling you get for the energy you pay for higher ratings usually mean lower bills.

• The four you'll see most: SEER2 and EER2 (cooling), HSPF2 (heat-pump heating), and AFUE (furnace heating).

• Since 2023, the federal standard is SEER2 / EER2 / HSPF2 (the “2” versions), which test units closer to real-world conditions and read about 4–5% lower than the old SEER / HSPF numbers.

• The right rating depends on your climate and how long you'll stay in the home; the highest tier isn't always the best value.

HVAC Efficiency Ratings at a Glance:

What Are HVAC Efficiency Ratings and Why Do They Matter?

HVAC efficiency ratings measure how effectively a system converts fuel or electricity into heating and cooling. The most common ratings are SEER (now SEER2), AFUE, HSPF (now HSPF2), and EER (now EER2). These numbers are set under standardized testing by the U.S. Department of Energy. As of January 1, 2023, the DOE replaced SEER, EER, and HSPF with SEER2, EER2, and HSPF2, which use a tougher, more realistic test — so you'll see the “2” versions on any new equipment.

By following this Discount HVAC Buying Guide, you’ll be in a better position to understand each type of rating. From there, you can move forward with confidence knowing that your new system will meet your efficiency requirements and provide you with the long-term cost savings you’re after.

How Do Efficiency Ratings Affect Your Energy Bills?

A higher efficiency rating typically means lower energy consumption. That naturally leads to lower monthly energy usage, which should result in lower bills. Over time, upgrading to a more efficient HVAC system can mean you’ll end up seeing significant yearly savings. It’s all about weighing the pros and cons for the big picture long-term. Higher-efficiency systems usually come with a higher initial cost, but since that equipment often saves you money, paying a little more upfront to see a meaningful reduction in your ongoing operating expenses might be worth it.

What Does SEER Mean for Air Conditioners and Heat Pumps?

The SEER rating stands for Seasonal Energy Efficiency Ratio. This measures a system’s air conditioner cooling efficiency over a typical cooling season. Put simply, the higher the SEER number, the greater the energy efficiency. This applies to both air conditioners and heat pumps running in the cooling mode.

SEER vs. SEER2 (and HSPF vs. HSPF2) quick equivalents:

What's the Difference Between SEER and SEER2?

SEER2 replaced SEER as the federal standard on January 1, 2023. The difference is in how the equipment is tested. SEER2 is measured at a higher external static pressure — 0.5" of water column versus 0.1" H2O for the old SEER test — which simulates the resistance of real household ductwork. Because the test is tougher, SEER2 numbers read lower than the SEER numbers they replace: as a rule of thumb, SEER2 ≈ SEER × 0.955. So an old 16 SEER unit is roughly 15.2 SEER2. The same real-world test change applies to EER2 and HSPF2.

When you compare high-efficiency air conditioners (/collections/air-conditioners-condensers) or heat pumps (/collections/heat-pumps), make sure you're comparing SEER2 to SEER2 rather than mixing old and new numbers.

What Is a Good Efficiency Rating for an AC Unit?

Today’s modern efficiency standards require most new central AC units to meet a minimum SEER rating of 14–15, but this depends on the region. From that threshold, a good efficiency rating for most homes will then fall between 16 and 18 SEER.

Learn more on our SEER2 requirements page.

What's a Good SEER2 Rating? (Good vs. Better vs. Best)

Once you're above your regional minimum, here's how to read the tiers. 15.2 SEER2 is the ENERGY STAR floor and a solid baseline. 16–18 SEER2 is a genuinely good, efficient range for most homes — the sweet spot of price and performance. 20+ SEER2 is premium territory, usually variable-speed equipment that earns its higher upfront cost in hot climates with heavy cooling loads.

What SEER2 Rating Do I Need? DOE Minimums by Region

DOE efficiency minimums are set by region because cooling needs vary with climate. The U.S. is split into three zones — North, Southeast, and Southwest — each with its own floor for new equipment installed in 2023 and later. You can verify a specific model's certified ratings in the AHRI Directory.

How Much More Efficient Is a 20 SEER vs. an 18 SEER?

A higher SEER number gives you better performance. But looking at the hard numbers, a 20 SEER system is roughly 10–12% more efficient than an 18 SEER unit.

The improvement in energy savings from 18 to 20 is real, but the price difference may not always justify the upgrade. If your region of the country does not have long, hot summers, then it may be a better financial decision to go with a lower SEER since the energy savings won’t offset the increase in price. Be sure to think about your usage!

What Is AFUE and How Does It Apply to Furnaces?

AFUE stands for Annual Fuel Utilization Efficiency and measures how efficiently a heating system converts fuel into heat. A furnace with 90% AFUE turns 90% of its fuel into usable heat. Unlike SEER, AFUE did not change to an “AFUE2” — the same rating still applies. Browse our high-AFUE furnaces (/collections/furnaces) to compare 90–98% models side by side.

What’s the Difference Between 80% AFUE and 95% AFUE?

An 80% AFUE furnace loses 20% of its fuel energy through exhaust. On the other hand, a 95% AFUE unit will only waste 5%. That 15% difference means you’ll see significantly better heating efficiency, especially in colder climates where furnaces are running more frequently. Thinking about where you live is part of making a wise decision.

What Is HSPF2 and What's a Good Heat Pump Rating?

The HSPF rating, or Heating Seasonal Performance Factor, measures heat pump performance in your system’s heating mode. Specifically, it calculates the total amount of heat the system delivers over an entire heating season (measured in BTUs) divided by the total electricity it consumes during that same period (measured in watt-hours). Testing is performed under controlled conditions that simulate a range of outdoor temperatures, so the rating reflects seasonal performance rather than a single point in time.

Put simply: Higher HSPF ratings are proven to connect to better winter efficiency. Current federal standards typically require HSPF ratings of at least 8.2. From there, high-efficiency models will exceed 9 or 10. So do you need less or more?

For example, if you live in a colder climate where your heat pump handles most of your home’s heating, then a 9 or 10 HSPF rating could make a noticeable difference in your energy savings during the winter months. Higher ratings are especially beneficial for homeowners who plan to stay in their home long term because they’ll be able to enjoy lower monthly utility bills. It’s also a smart call when you’re replacing an older, lower-efficiency system and looking to maximize overall performance and comfort. In mild climates, though, you could probably stick with the lower HSPF ratings and still make out just fine for your bottom line.

What Is EER2 and When Does It Matter?

The EER rating, or Energy Efficiency Ratio, measures performance at peak outdoor temperatures. Unlike SEER, which gives you a number that averages seasonal performance, EER evaluates efficiency under steady, high-heat conditions. This means that in hot climates where cooling units operate continuously, going with a strong energy efficiency ratio will usually be the right call. It means you’ll be getting better overall system performance, along with improved reliability.

2025 Refrigerant Change: What R-454B/R-32 Means for Buyers

Starting in 2025, new residential HVAC systems moved to low-GWP (global warming potential) refrigerants to meet the EPA's AIM Act phasedown. Ducted systems now typically use R-454B, while many ductless mini-splits use R-32 — both replacing the long-standing R-410A. For buyers, this means new equipment is built around the new refrigerant, and R-410A systems are being phased out. When you buy a matched system (/collections/matched-sets), the indoor and outdoor units are designed for the same refrigerant, which protects both performance and warranty coverage.

Federal HVAC Tax Credit: What Changed in 2026

Important update: the federal Energy Efficient Home Improvement Credit (Section 25C) — which offered up to 30% back (up to $2,000 for heat pumps, up to $600 for qualifying AC or furnaces) — expired on December 31, 2025 under the One Big Beautiful Bill Act. HVAC equipment placed in service on or after January 1, 2026 does not qualify for the federal 25C credit.

If your qualifying system was installed and running on or before December 31, 2025, you can still claim it on your 2025 tax return (IRS Form 5695). For 2026 and later, look to state and utility rebates and the federal HEAR / HOMES rebate programs, which are administered by states and were not affected. Always confirm current eligibility with a tax professional.

What SEER2 Rating Qualified for the 25C Credit? (2025 and Earlier)

Historically, to claim the 25C credit a split-system air conditioner generally needed to reach at least 16 SEER2 and meet the applicable ENERGY STAR tier for its region, with higher thresholds for the heat-pump credit. Those requirements only matter for equipment placed in service on or before December 31, 2025. Because the 25C credit expired for systems installed in 2026 and later, there is no longer a federal SEER2 threshold to hit for a 2026 tax credit — check state and utility rebate programs instead, and confirm the details with a tax professional.

What Is the $5000 Rule for HVAC?

The "$5000 rule" is a simple formula for property owners to use when deciding whether to make a repair or upgrade their HVAC equipment altogether. You just multiply the age of your current system by the repair cost. If that total exceeds $5,000, then it’s generally safe to say that replacement will be the smarter choice.

If you’re looking at a typical Discount HVAC Buying Guide, looking at this rule along with the other suggestions can help you determine the best course of action with your budget. In the end, it might be worth investing in a new system that comes with an improved HVAC efficiency rating instead of repairing older HVAC equipment that’s already on its way out.

How Much Money Can Higher Efficiency Ratings Actually Save You?

Looking at efficiency has a very practical purpose. It’s about protecting your budget! For example, upgrading from a 14 SEER to an 18 SEER system can reduce your cooling energy consumption by 20–30%. That means lower monthly bills. The same goes for switching from 80% to 95% AFUE. This can lower your heating fuel usage by 15% or more.

Of course, the actual cost savings depend on your local climate and system usage, along with local utility rates. But what’s even more important is whether the equipment is installed correctly by a qualified HVAC expert. Make sure you’re going with a trusted professional to get the best efficiency rating possible every day.

Should You Always Buy the Highest Efficiency Rating Available?

Everyone has their own situation, so it’s not necessarily a hard and fast rule to always go with the highest efficiency rating possible. While yes, a higher efficiency rating will reduce your long-term energy costs, it’s worth noting that the highest-tier models often come with some higher upfront pricing.

In moderate climates, going with mid-range energy-efficient HVAC systems may offer the best balance. You’ll get the benefits of both initial cost savings and long-term performance. If you don’t need a high-powered system to get you through dramatic weather, why not make the call to save a little more on the equipment itself?

When you look at the facts in this Discount HVAC Buying Guide, you’ll hopefully see that HVAC efficiency ratings are designed to help you choose the right heating and cooling solution. There’s no one-size-fits-all solution. You have to find the system that fits your home, budget, and comfort goals—and that’s always going to be unique! Surplus City Liquidators offers a variety of quality HVAC units, and we’re happy to answer any questions you may have.

Frequently Asked Questions

What's a good SEER2 rating?

15.2 is the ENERGY STAR floor; 16–18 is efficient; 20+ is premium.

What's the difference between SEER and SEER2?

SEER2 is tested at higher static pressure to reflect real ductwork; SEER2 ≈ SEER × 0.955.

What's a good HSPF2 rating?

7.5 is the minimum; 8–10+ is strong; 10–12+ for cold-climate heat pumps.

What SEER2 do I need in my region?

North 13.4 SEER2 min; Southeast/Southwest 14.3 (13.8 for larger units); heat pumps 14.3 SEER2 / 7.5 HSPF2 nationwide.

Is a higher SEER2 always worth it?

Not always; payback depends on climate and run-hours — highest in hot climates with heavy AC use.

What is EER2?

Cooling efficiency at a single peak-heat condition (95°F); matters most in hot, dry climates.