AFUE stands for Annual Fuel Utilization Efficiency. It is a measure used to evaluate the efficiency of heating appliances, such as furnaces and boilers. The AFUE rating indicates the percentage of fuel that is converted into usable heat over a year. For example, an AFUE of 90% means that 90% of the fuel is used for heating, while the remaining 10% is lost. A higher AFUE rating signifies a more efficient heating system, which can lead to lower energy bills and reduced environmental impact. Homeowners often consider AFUE ratings when selecting heating systems to ensure they are making energy-efficient choices for their homes.