Technically, the efficiency of a piece of equipment is defined by the useful energy produced divided by the energy needed to operate that equipment. So, for your standard natural gas boiler, we typically look at how much heating energy we get out of it, compared to the embodied energy of the gas burnt. The case is basically the same for any fossil fuel burning contraption.
However, in the age of renewable energy the question becomes significantly more complex. Take heat pumps for example. If we measured their efficiency, it probably wouldn't be great because you're taking thermal energy from some source and using pumps and compressors to upgrade it and move it to a desired location. However, do we pay for the source of thermal energy? Does it slowly run out? No. The entire pool can be considered a component of operation rather than strictly a fuel source.
So, the performance of heat pumps is generally measured with the coefficient of performance (COP). This is a ratio between the number of units of thermal energy pumped from the heat pump compared to the units of electrical energy needed to run it. Essentially, it's an efficiency figure that negates energy being moved to or from a borefield or the atmosphere.
What about other renewable energy technologies? Do they use efficiency? Yes, but the case is changed slightly from fossil fuel applications. For wind turbines, solar PV, or hydro installations, the input energy considered isn't some depletable resource that you're paying for, but the rising Sun, gusting wind, or gushing river. Fossil fuel advocates like to point to high-efficiency furnaces that are 96% efficient and compare the figure to a solar PV module that might have an efficiency of 18%, concluding that it would be silly to go with solar. The fallacy being that this would only be an adequate comparison if one, they were paying for Sunlight, two, they pay the same rate per unit solar energy as they do for gas, three, using the Sunlight contributes to greenhouse gas emissions, and four, their continued use of the Sunlight would somehow diminish its source. Obvious malarkey.
If this post was getting a little bit technical for you, check out our green design tab for more information about renewable energy.