We have a small (850 sq ft) home that is currently being heated by a gas furnace which is "80% efficient" but doing a very poor job at it.

I feel like due to the size of our house a central heating system is unnecessary and inefficient.

The furnace is in the attic and so heating vents are in the ceiling of the living area and heat doesn't sink very well even with ceiling fans put on reverse/low speed.

The thermostat is set @ 62F meanwhile the attic is 65F... the ceiling of the 1st floor/floor of the attic is insulated, as well as the ceiling of the attic (no walls due to roof shape), which suggests to me that a lot of hot air is either escaping through the furnace surface (yes it's hot to the touch) or ductwork? Which to me sounds like I'm heating another 850 sq ft for nothing?

From some independent web research it sounds like the most enviro-friendly method and cheapest per BTU is natural gas ($1.45 per therm) so my thought was an ultra efficient "Rinnai" brand gas furnace space heater strategically placed on the LIVING floor and shutting off the central furnace entirely.

I'm wondering if anyone can offer up information that would suggest another method would be better or thoughts on the Rinnai 1004 space heater. Basically I am looking for most enviro friendly in combination with wallet friendly,but willing to make an investment that will take 5 years to pay off.

Wood pellets seem to be #2 but hard to justify increased cost of oven and pellets in this area are not readily available and therefore pricey ($300 a ton!).

THANKS.

Based on where I live (suburban NYC Northern NJ)

I use a 30,000btu vent free natural gas heater from Northern Tools and haven't used my central heat since. I live in a loft apartment with a large living area open to the kitchen. There is no heating in the bedroom but I kind of like it cool like that.

I figured the savings using gas vs. electric central heat paid for the heater in one season.

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what do you mean by "vent free"

Natural Gas and Propane are clean enough burning that they can safely be used without a chimney.

I'm not quite sure what the limits are, but rather than sending the heat up the chimney, they are "vent-free", and 100% of the heat stays inside the house.

It is not recommended for most other fuels such as wood.

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Natural Gas and Propane are clean enough burning that they can safely be used without a chimney.

Not true, and anyone doing that is compromising their health and that of their family.

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Consumer Reports Nov, 1998 issue did a small story on their testing of Vent-Free appliances. Based on their findings, they conclude “our tests confirm that these heaters contribute significantly to indoor air pollution. If you are planning to buy a gas fireplace, a vented model should be your first choice”. They also give recommendations if you do buy a vent free, such as keeping a window open TOP AND BOTTOM when you are using the appliance. All in all, not a very complete test, however it represents one of the first independent opinions on these controversial products.

AN INDUSTRY VIEWPOINT UNVENTED VS VENTED GAS APPLIANCES
Canada should not change its regulations preventing unvented gas appliances.
Reprinted with permission from Mechanical Buyer and Specifier magazine.
By Lance O’Hearn
more at:
http://www.hearth.com/econtent/index.php/articles/unven...ented_gas_appliances

Personally I would not use a vent free device but that is me. The Rinnai 1004 is direct vented. It has a tiny little 3" horizontal exhaust (half of that is the intake) and you install it on an outside wall.

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Not true, and anyone doing that is compromising their health and that of their family.

I'm no expert, but if they are running PERFECTLY, you just have to consider the significant addition of moisture they will add to your home.

But there's no such thing as perfect, so the better your house is sealed up, the more risk you are assuming. In an ice shanty out on a lake somewhere, they would work great, as the whole structure is vented every time the door is opened, but otherwise...

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The furnace is in the attic and so heating vents are in the ceiling of the living area and heat doesn't sink very well even with ceiling fans put on reverse/low speed.

I think you would actually get better luck running your fans on forward since the ducts are in the ceiling...I think running them in reverse (despite the manufacturer suggestion to do so in the winter) is creating a back pressure that the furnace has to overcome.

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which suggests to me that a lot of hot air is either escaping through the furnace surface (yes it's hot to the touch) or ductwork?

If its hot to the touch, you need to insulate that ductwork and furnace surface until it isn't even warm to the touch. If its in an unheated attic, ice should be able to form on the outside of your ductwork insulation on a cold enough day, otherwise its not insulated enough.

I agree. The attic should be cold! but alas I purchased the Rinnai already. We are going to work with that and shut off the attic furnace and see what happens. I have a feeling we will be warmer for less money but time will tell.