Why HVAC efficiency standards exist
The U.S. Department of Energy (DOE) sets the minimum efficiency that heating and cooling equipment sold in the country must meet, and it revisits those rules roughly every six years. The most recent update took effect January 1, 2023: it raised the minimum efficiency for air conditioners and heat pumps and modernized how that efficiency is tested. The short version for homeowners — new equipment has to waste less energy than it used to, which can mean lower bills and steadier comfort.
SEER became SEER2 — what changed
Alongside the 2023 minimums, the testing method changed, so the ratings gained a "2." The updated M1 test procedure measures equipment under conditions closer to a real duct system, so the numbers are a little more realistic. The practical rule: compare SEER2 to SEER2 (and HSPF2 to HSPF2) — not an old SEER number against a new SEER2 number. Think of SEER2 like miles-per-gallon for cooling: higher means more cooling per unit of electricity.
The four ratings, decoded
- SEER2 — seasonal cooling efficiency. How efficiently an air conditioner or heat pump cools across a whole season. It's the headline number on most cooling specs.
- EER2 — peak cooling efficiency. Efficiency at a single hot design condition; it matters most on the most brutal summer days.
- HSPF2 — heat-pump heating efficiency. How efficiently a heat pump delivers heat over a season. Higher HSPF2 means more heat per unit of electricity.
- AFUE — furnace and boiler efficiency. The percentage of fuel a gas furnace or boiler turns into usable heat. Older units often run 70–80%; modern high-efficiency (condensing) models are roughly 90–98%. Because Minnesota's heating season is long, AFUE is often the single most important rating for a Twin Cities home.
Where Minnesota fits
To account for climate, the DOE divides the country into regions for air-conditioner minimums — Southwest, Southeast, and North. Minnesota sits in the colder North region. Heat-pump minimums, by contrast, are set uniformly nationwide. These regional rules define the lowest-efficiency equipment a contractor can legally install in your area — they're a floor, not a target. Midland generally recommends equipment above the federal minimum, because over a long Minnesota heating-and-cooling year the efficiency difference shows up on your bill. The DOE periodically updates the exact minimum figures, so confirm the current numbers at energy.gov or with your installer for the specific equipment you're considering.
What it means for your energy bill
Two things make efficiency matter more here than in a mild climate: a long heating season and humid summers. A higher-AFUE furnace burns less gas across the winter; a higher-SEER2 system uses less electricity through the cooling months and tends to dehumidify better. Higher-efficiency equipment usually costs more up front — which is exactly where rebates and financing come in. See our guide to rebates & incentives.
Reading the yellow EnergyGuide label
New systems carry a yellow EnergyGuide label showing the efficiency rating and an estimated operating cost. Use it to compare models on the same scale — but remember the label assumes average national conditions, not a Minnesota winter and not your specific home. The most reliable comparison is a quote that pairs the right efficiency with the right size for your house.
Efficiency only pays off when the system is sized right
A high-efficiency system that's oversized or poorly installed won't deliver its rated savings — it short-cycles, controls humidity poorly, and wears out faster. The fix is a proper load calculation (Manual J), not a rule of thumb based on square footage. Midland sizes replacements to the home, not to the old equipment. Not sure which system to put that efficiency into? Start with HVAC System Types.