Heat and hot water, too
Hot-water boilers can burn a variety of fuels, including #2 fuel oil, natural gas, propane, and biomass such as wood or compressed wood pellets. But they aren’t popular in the United States: hot-water heating systems accounted for about 2% of all heating systems installed in new houses in 2007, according to the U.S. Census Bureau.
Unlike hot-air furnaces, boilers can’t be used for air conditioning or humidification, and boilers are typically more expensive. But hot-water distribution systems are clean and usually quiet, and boilers can pull double duty as a source of both space heat and domestic hot water. Hydronic distribution systems are usually more efficient than forced-air duct systems, many of which are plagued by leaks. Sophisticated controls like outdoor resets can help to minimize boiler fuel use.
Government efficiency minimums. Federal regs require that boilers burning fossil fuels have a minimum annual fuel utilization efficiency (AFUE) of 80%. That means 80% of the fuel consumed must go directly to heat and no more than 20% is wasted.
But boilers with much higher efficiencies are on the market, including condensing boilers fired by natural gas with efficiencies of more than 95%. In cold climates, high-efficiency boilers offer significant fuel savings that should justify their higher initial cost.