Summertime = furnace?

Now that it's 90 degrees outside I've been thinking about my furnace.
That might seem weird, but hey, who wants to replace their furnace when it's 20 degrees outside? Not me.

The hubby and I have decided that the furnace is the first big project we're going to tackle. It makes sense. The darn thing has been chugging along in our basement since 1957. (My guess is it wouldn't make the grade for an Energy Star rating). It also costs us a huge bucket of cash to use. In the winter, we bundle up in sweaters and keep the thermostat on 60 degrees, yet we are still paying north of $350 a month to "heat" our 1,400 square foot house.

Here's the catch: We aren't quite sure what to replace it with. So I've been poking around on the Internet.

I read a compelling story about new micro-CHP furnaces. Basically, they not only heat your house, but use the extra energy to generate electricity. They are used widely in Japan, but have just made their debut in North America. (Here is a link to that story:http://www.csmonitor.com/2006/1114/p01s02-usec.html)

Then there is geothermal, a series of underground tubes that transfer heat into and out of your house. It is incredibly efficient and emits almost no CO2. Alas, we have a small lot, so I'm not sure if it's an option for us. Plus, I'm not sure if there is an installer near us, or if it's going to be prohibitively expensive. (for more info: http://www.geoexchange.org/)

The least sexy option is merely to upgrade the furnace we already have. I mean, a new, normal furnace would still have to be significantly more energy efficient than the 50-year-old monster that's chewing up natural gas at our house every winter, right?

We are budgeting between $7,000 and $12,000 for this project. It makes my palms sweat a little bit because that's a lot of money.

But that's about how much we are budgeting for each of the major system/structural upgrades to our house: The furnace, the roof, the windows, and maybe if we're feeling frisky, a net-metered solar power system to top it all off.
Our plan is to tackle one big project a year, to spread out the costs.

So let the shopping begin.