A direct measurement procedure has provided accurate eval-' , uation of the efficiency of residential heating units during full-load and part-load operation. Laboratory measured efficiency data for each heating unit are translated into a more useful form as annual fuel consumption and fuel-weighted seasonal efficiency values. The changes in fuel use and seasonal efficiency are evaluated for variations in operating conditions including: geographic location, design heat load of the building, domestic hot water use, and design fuel firing rate. The cornbi-. nation of direct, accurate efficiency measurement and calculation of annual fuel use provide a standard method for comparison of individual heating units and retrofit modifications on a common and realistic basis. The cost effectiveness and payback periods of equipment modifications can be quantitatively evaluated.