A two-stage furnace chooses when to use all of its power and when it only needs to use a portion of its power. For example, if the furnace has a 100,000 British Thermal Unit (BTU) capacity, it will use a portion of its capacity in the first stage and all of its power in the second stage. Your thermostat tells the furnace when to use stage one or stage two. Let's say it's a frigid winter morning, and the outdoor temperature is minus 20 degrees Fahrenheit, and you have your thermostat set at a toasty 72 degrees F. Your thermostat will tell the furnace to go to stage two and use all 100,000 BTUs of heating power. As your home heats up and gets to perhaps 65 degrees F, the thermostat will send a message to the furnace and tell it to drop down to stage one and use only 50,000 BTUs of power. The furnace will continue to disburse heat but not at full blast.
A two-stage furnace has benefits that you can feel, hear and see. You home continues to feel warm, even when it's operating in stage one. You don't feel drafts and sense swings in the room temperature either because a two-stage furnace provides a steady, continuous flow of warm air. You will also hear a difference because the furnace will run quietly, without sudden sounds of turning on and off throughout the day as can be the case with a single-stage furnace. And, a two-stage furnace provides benefits and advantages that you will see when you open up your utility bill. It utilizes energy efficiently, so you use less energy and save money.
Since a two-stage furnace adjusts its motor speed to run at full or half-power, it uses energy more efficiently, using only what is required to get the job done. The furnace trade refers to this as "intelligent technology." Furnaces are rated for energy efficiency based on their Annual Fuel Utilization Efficiency (AFUE). While a standard, single-stage furnace might have an AFUE of 80 (78 is the minimum to meet FTC regulations), some two-stage furnaces have AFUE ratings as high as 97. At that rating, a furnace is only "wasting" three percent of the energy is uses, and the other 97 percent is converted to heat.
Two-stage furnaces will typically cost around 20 percent more than a single-stage furnace. Prices for a new two-stage furnace can start around $1,200 and go as high as $5,000 and more, based on the BTU capacity and the AFUE rating, as of August 2011. The U.S. Department of Energy estimates that over the life of the furnace, a new, high-efficiency two-stage furnace can generate savings of $2,700 and more in energy costs. That amount is enough to offset the price of purchasing a two-stage furnace.