A condensing boiler is a boiler that re-uses its waste heat that is produced when burning fuel (latent heat) to heat the cold water before it enters the boiler. Using this type of energy recycling, condensing boilers are far more efficient than their predecessors, the non-condensing boilers.
The reason for the name “condensing” is that as the water leaves the boiler through the flue is starts off as water vapour. The vapour then travels upwards along the flue until it cools and drips back down the flue into a condense trap. This waste water then leaves the boiler into a drain via a condense pipe.
Whereas older non-condensing boilers have a flue that projects at a downward angle, condensing boilers project slightly upwards so the water re-enters the boiler.
All new boilers are condensing to keep inline with SEDBUK (Seasonal Efficiency of Domestic Boilers in the UK) which states that a boiler should operate at 90% efficiency or above. Previously, non-condensing boilers were operating at around 70-80% efficiency.