More About Boilers A boiler uses natural gas, oil, or electricity to heat water or produce steam, which is circulated through a network of pipes into radiators, baseboard convectors, radiant floors or fan-forced coils. On average, 30 to 40% of household energy bills are from heating and cooling costs. The efficiency of boilers is measured by the annual fuel utilization efficiency (AFUE), a measure of overall performance. Some of the highest-rated units are natural gas-fired, with AFUE ratings as high as 99%. In comparison, many older boilers have AFUE ratings of only 55 to 65%. Therefore upgrading to a high efficiency boiler can vastly lower your heating bills. System Types Boilers can be hot water or steam, and either type can be gas or oil boilers. The piping systems are different for each type. The hot water system boiler uses a pump to circulate hot water while the steam boiler uses its own pressure to circulate steam throughout the system. Both use a burner to heat the water to the temperature that is set on the thermostat. An aquastat monitors the temperature of the water and turns the burner off when the temperature reaches the desired level. Steam boilers must heat the water to a higher temperature, and therefore have lower efficiencies than hot water boilers. Natural-gas-fired boilers are more efficient than oil-fired boilers.