The national average cost of furnace replacement is $3,870, with most homeowners spending between $2,248 and $5,511. This data is based on actual project costs as reported by HomeAdvisor members.
Whether you need to replace a dead furnace or install an entirely new heating system, you're looking at a significant investment. Before you even start shopping for a shiny new furnace, you should consider consulting with a licensed HVAC (Heating, Ventilation and Air Conditioning) professional. Your HVAC pro can look at your particular house - its size, configuration, age - and help you determine the best and most cost-effective way to heat it.
The first question to hash out with your HVAC contractor is the kind of fuel you should use: gas, electric, oil or something else. Most homeowners stick to whatever their homes already had to minimize the labor and costs associated with extra installation of things like duct work or running electric lines. But there could be reasons to change. Your location, house size, and energy bills will all factor in to your final decision on which furnace type, model, and size is right for your home.
There are a lot of brands out there to choose from, and it's important to do your research ahead of time before deciding which furnace brand you will go with. The one that works best for your house might not be the one that you recognize from radio or TV ads. You will need to factor installation cost into your overall price if you plan on having it installed by a professional, which is recommended unless you have specific HVAC training. Keep in mind that top-rated brands come at a higher cost for the furnace as well as installation since HVAC installers who choose to align themselves with higher-priced furnaces often charge extra for their services.
Average Prices for Gas Furnaces
Gas furnaces are the most commonly used furnaces, particularly in areas that endure harsh winters. The prices listed for the furnaces below represent prices for an average house with average needs, which is an 80,000 BTU furnace with a 3-Ton blower that is installed in a first floor utility room of a 1600-2000 square foot house.
If you prefer to use propane instead of natural gas, make sure to factor the price of conversion into the estimates below. Gas furnaces can generally be converted to propane for a minimum fee. In most cases, the conversion process includes replacing the gas valve, the burners, jets, or any combination of these parts depending on the furnace. A conversion kit ranges from $25-$100.
Electric furnaces are most common in parts of the country that don't endure harsh winters. These systems are less in-demand than gas furnaces. Electric furnaces themselves can operate at a high efficiency; however they are usually more expensive to operate since they use a lot of electricity to heat a home.
The average prices for the following electric furnaces are based on the typical setup for a 1500 square foot home in the southeastern United States, in a climate that rarely sees temperatures drop below freezing. For electric furnaces, brands really do make a big difference in pricing, and often the more well-known brands also attract better qualified HVAC professionals, so installation for top brands will be at a premium.
Oil furnaces have been used longer than gas or electric furnaces, and they are commonly used in parts of the country that have a high availability of oil. Due to current oil prices, they are generally considered obsolete. As with gas and electric furnaces, installation costs are generally higher for the pricier furnaces since they are installed by HVAC professionals with more experience. The oil furnace prices listed below are based on the size of a furnace needed to heat a standard home that is 1600-2000 square feet. The 275-gallon oil tank would be freestanding in either the yard or the basement.
BTUs (British Thermal Units) measure the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit, and furnaces are measured in how many BTUs they use per hour to achieve this temperature increase. For example, a furnace rated as 100,000 BTU input uses 100,000 BTU per hour.
Larger homes and those in colder climes will need higher-capacity furnaces than those in mild climates. But beware: getting a furnace with a higher capacity than you need could ultimately cause uncomfortable conditions, in addition to costing you extra money. Here's where a consultation with a licensed HVAC expert could really come in handy.
Regardless of fuel type, you're going to want to consider how efficiently your furnace heats your home. Furnaces all must come with an Annual Fuel Utilization Efficiency (AFUE) rating that spells it out for you. For the most part, higher ratings equate to less fuel consumed.
Mid-efficiency furnaces operate at 80%-83%. High-efficiency furnaces operate closer to 96%. The federal government encourages fuel efficiency by giving the best-performing furnaces their Energy Star rating, essentially their seal of approval. Gas furnaces with the Energy Star perform at 90% or better in southern states and at least 95% in northern states. Oil furnaces with the Energy Star operate at 85% or better.
Get out your calculator to determine how long it will take you to recoup the cost of buying a new, more efficient unit. There are several steps to do this:
Determine how much you already pay for your gas/oil or electric costs. Perform this calculation by multiplying your total gas or electric bill by 12. If you want a more accurate assessment (especially for your electric furnace, since so many appliances run on electricity), you can have your utility company come out to evaluate your furnace. They should be able to give you a good estimate of how much of your utility cost comes from your furnace versus the rest of your home.
Calculate the price of your furnace including installation.
Subtract any government incentives or rebates. This includes ones from your utility company and/or furnace manufacturer from this amount to get the final cost of your furnace.
Take a look at the yellow tag on your new furnace. This tag should give you an estimate of how much energy it will use annually, based on usage for an average home.
Multiply this number by the cost of energy for your area. You should be able to get this information from your utility bill.
Subtract the cost of operating your new furnace for a year versus operating your old furnace for a year.
Divide the final cost of your furnace by the energy cost savings. That way you find out how many years it will take for the furnace to pay for itself in energy savings.
If it will take more than 10 years to get to your break-even point, you may want to go with a cheaper, less-efficient alternative. Also, consider that efficiency goes beyond the quality of your furnace. You can improve the system's efficiency by making less expensive repairs like sealing leaky ductwork and adding more insulation.
Labor Costs for Furnace Installation
Labor costs for furnace installation vary depending on your location and the HVAC professional performing the installation. As you will see in the section on average furnace and installation prices, higher rated furnaces that cost more money also come with an increased installation price. This is because HVAC professionals who choose to align themselves with top-rated furnaces are generally more experienced, thus they charge a premium price. You can expect to pay anywhere between $50 and $75 per hour for a licensed furnace installer, along with up to $50 per hour per person additional for their team members.
In some municipalities, a permit may be required to install a furnace, and that will add to the cost -- potentially $50 to $150, depending on where you live. You might also need to get it inspected. Overall, the project cost will depend on the current set-up of your home and whether you need to repair or install new ductwork.Return to Top
What Type of Furnace Should You Install?
Electric Furnaces - $670 to $2,000
Electric is the cheapest way to go in terms of initial costs. Electric furnaces don't require special venting, fuel pipes or storage tanks. They're easy to maintain. The units are small and inexpensive to install. They tend to be fairly safe since there's no fuel combustion involved. And they last a long time - 15 to 20 years on average. Unfortunately, electric furnaces, though more efficient than they were 10 years ago, are still the least efficient alternative and may bring higher bills.
Electric furnaces are most common in parts of the country that don't endure harsh winters. If you live somewhere that requires you to use your heat for the better part of the winter, then you will wind up spending a small fortune annually to heat your home. The monthly payout isn't worth it to make up for the initial price savings.
Gas Furnaces - $1,200 to $2,400
Natural gas furnaces often cost a bit more than electric, and unless you're replacing an existing unit, they come with the added expense of putting in gas lines from the street and building extensive ductwork. But they're usually much more efficient, and that can translate to lower utility bills. A fairly abundant resource in the United States, natural gas has become a relatively inexpensive fuel source.
Natural gas furnaces also have the advantage of warming up the home extremely quickly compared to other fuels, so consider that you're not only paying for efficiency, you're paying for convenience and comfort. You can convert a gas furnace to propane for a minimal expense. Gas furnaces are recommended for anyone, but especially for homes that endure harsh winters as it is less expensive to heat your home with gas than it is to heat it with electricity.
Oil Furnaces - $1,800 to $5,800
When oil was cheap, oil furnaces dominated the market, particularly in the northeastern United States. They do require storage tanks, but that gives consumers the option of buying large amounts at one time, getting rid of the monthly heating bill. As oil prices rose, oil furnaces became the dinosaurs of the heating market, and the federal government gave rebate incentives for homeowners to convert to natural gas. They are still available, though, if you happen to live somewhere that has an abundance of oil for a low cost.
Green Furnace Options
Solar panels, geothermal and other environmentally focused heating systems can be investments not only in your home but in a more sustainable planet. Still, consult experts before you buy. You might live in a valley or wooded area without enough sunlight for solar. You might live in a bad region for geothermal. Consider that the upfront costs are high, and at current energy rates, you may not recoup your initial investment, even over the life of your home. But if traditional fuels grow considerably more expensive, these eco-alternatives may start looking like smarter choices.
You can also get government rebates for these green alternatives. The U.S. Department of Energy offers a 30% tax credit for some types of heating systems. For instance, a $20,000 geothermal system would translate to $6,000 on your next tax return.Return to Top
Considerations for Furnace Replacement
Time to Upgrade?
The average lifespan of a well-maintained furnace is 15 to 25 years, so if you have a furnace that is less than 15 years old and well-maintained, there is a good chance you can avoid replacing it with a new furnace by making some minor repairs instead. However, newer furnaces are more efficient, so upgrading to a more efficient furnace might end up saving you money in the long run depending on what is wrong with your current one. In addition, many gas companies offer rebates for customers who switch to a more energy efficient model. Here are a few other things to take into consideration if you're considering replacing your current furnace:
Newer units have higher standards for efficiency as mandated by the U.S. government. Furnaces that operate at 55%-72% AFUE are obsolete, and have been since 1992. These non-compliant furnaces should be replaced with a furnace that at least meets the minimum guidelines of 80% AFUE. This new minimum was implemented in 2013, replacing the 1992 standard of 78%, so even if your furnace was installed after 1992, if it is operating at 78% AFUE it is now obsolete.
In addition to being more cost efficient, newer furnaces are quieter and more eco-friendly than older models. If your gas or oil-burning furnace was installed before 1992, you are probably wasting 30% or more of your energy dollars in addition to pumping up to 4 tons of carbon dioxide into the atmosphere each year.
If you want to convert from an electric furnace to a gas furnace, you will need to have gas piping and ductwork installed first. This will add an additional up-front cost to the furnace and installation process of around $5,000 to $15,000 or more depending on the space. If you simply need to repair duct work, you can expect to pay anywhere from $1,000 to $5,000.
Factors that affect the cost of ductwork repair and installation include: how many total floors the house has; the total number of intake and output vents that are needed to create comfortable temperatures throughout the house; the number of separate temperature-control zones; the extent of repairs needed for the floors, walls and ceilings after the ducts are installed; and overall accessibility of the ducts.
A major benefit of installing a new furnace is that it will come with a warranty, which will leave you off the hook for future repairs during a pre-determined period of time. Warranties vary depending on the brand of furnace you have installed. Generally, basic (meaning lower efficiency) furnaces have a shorter warranty than premium furnaces, so you will want to explore the warranty options of your top picks before making a final decision. Warranties generally cover parts for 5-10 years, though some offer full replacement for 10 years. Most furnace companies also offer customers the option to purchase additional warranties that will cover parts and service for a longer period of time.Return to Top
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