Determine the type of fuel that is available for your house. The type of fuel will determine the type of furnace you can install in your house. In some rural locations, for instance, natural gas is not available.
Determine the efficiency rate that you can live with. The efficiency rate is the amount of total energy used to operate the furnace so it provides heat to your home. The higher rate the more efficient your furnace is. For example, if your rate is 75 percent, then 25 cents on every dollar is wasted. Different fuel types provide different rates and the higher the rate, the more expensive the furnace will be.
Size the unit. The size of your furnace is determined through a series of calculations done by a professional. It depends on the actual square footage of your house, the insulation, the number of levels and the number and type of windows, doors and vents. If your furnace is too large, it will result in the furnace wasting energy. If your furnace is too small, it will have trouble heating your entire house.