Learn German: Die Heizung ist alt, aber sie funktioniert gut. - The heating is old, but it works well.

In German, pronouns must match the gender of the noun they replace. Because Heizung (heating) is a feminine noun (die Heizung), you have to use the feminine pronoun sie to mean 'it', rather than the neuter pronoun es.

Does the word 'aber' change the word order in the second half of the sentence?

No. aber (but) is a coordinating conjunction, which means it sits in 'position zero' and does not affect the word order. The subject sie takes position 1, and the verb funktioniert stays in its normal position 2. This is a great contrast to subordinating conjunctions like damit (so that) from your current lesson, which push the conjugated verb to the very end of the clause.

Why use 'funktioniert' instead of 'arbeitet' here?

When talking about machines, devices, or systems 'working' (meaning they operate correctly and are not broken), German uses funktionieren (to function). The verb arbeiten is mainly used when people or animals are doing physical or mental labor.

Is there an easy way to remember that 'Heizung' is feminine?

Yes! Almost all German nouns that end in the suffix -ung are feminine and take the article die. Recognizing common noun endings like this saves you from having to memorize the gender of every single new word.