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Definition of Terms


Annual Fuel Utilization Efficiency. A measure of a furnace''s heating efficiency. The higher the AFUE percentage, the more efficient the product. The US government''s established minimum AFUE rating for furnaces is 78%.

Air Handler

Also known as the "indoor unit", the air handler is the evaporator section of your air conditioning system. It circulates and delivers the cooled air. The indoor unit contains the evaporator coil, an indoor fan motor and, sometimes, a heat strip (for supplemental heating).

Automatic Setback Thermostat

An automatic setback thermostat or programmable thermostat allows you to store six or more separate temperature settings for different times of the day. You can set the thermostat with a daily or weekly program. And you can override the settings at any time without affecting the daily or weekly program.


BTU stands for British Thermal Unit: the amount of heat required to raise the temperature of one pound of water one degree fahrenheit.


The compressor is the "engine" which drives the condensing unit. The condensing unit serves as a pump which compresses the gas in the high pressure (condensing) side of the cooling cycle and causes the refrigerant (Freon) to circulate.

Condensing Unit

Also known as the "outdoor unit", the condensing unit pumps vaporized refrigerant from the air handler (indoor unit), compresses it, liquefies it, and returns it. It contains the compressor coil, an outdoor fan motor, refrigerant control valves, and other necessary controls.

Evaporator Coil

Found inside the air handler (indoor unit), the evaporator is where refrigerant vaporizes and absorbs heat.

Placed in Service

The IRS defines "placed in service" as when the property is ready and available for use. It''s not when you purchase product, but the day installation is complete, and you are able to use your new product.

Principal Residence

The tax credit for energy efficiency is available for improvements made to a home that you own and use as your "principal residence." This is the home where you live most of the time. A temporary absence due to special circumstances, such as illness, education, business, military service, or vacation will not change your principal residence.

The home must be in the United States.  It can include a house, houseboat, mobile home, cooperative a

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