A high efficiency furnace will have a higher upfront cost, but it will also save you money on your utility bills for years to come. While Los Angeles may be better suited for a heat pump because of it's milder climate, an efficient furnace will also create a comfortable living space for you and your family in the winter time while saving money on your utility bills. It is also an investment into the home's overall value if you plan to resell the home in the future.

ENERGY STAR natural gas furnaces may also qualify for a $200 rebate from SoCalGas. Customers should mail in the rebate application by the end of 2010.

Finally, the federal government will cover 30 percent up to $1,500 of the equipment and installation costs for 95 percent efficient furnaces through a federal energy efficiency tax credit. To be eligible, the furnace must be installed on your primary U.S. home, and you'll need to install it by the end of 2010.