Choosing to install a new furnace is a significant investment for any American homeowner. The cost can vary widely based on the type of furnace, home size, and factors related to installation. This article provides a deep dive into what you can expect regarding new furnace installation cost, key considerations, and smart tips for getting the best value.
Furnace Installation Cost Summary Table
| Furnace Type | Cost Range (Unit Only) | Installation Labor | Total Estimated Cost |
|---|---|---|---|
| Gas Furnace | $1,500 – $3,500 | $1,000 – $2,500 | $2,500 – $6,000 |
| Electric Furnace | $700 – $2,000 | $1,000 – $1,500 | $1,700 – $3,500 |
| Oil Furnace | $1,800 – $3,500 | $1,500 – $2,500 | $3,300 – $6,000 |
| High-Efficiency Furnace | $2,500 – $5,500 | $1,500 – $3,000 | $4,000 – $8,500 |
Main Factors Affecting New Furnace Installation Cost
Type Of Furnace
The biggest driver of cost is the type of furnace chosen. Gas furnaces, popular for their efficiency, generally come with moderate to high up-front costs. Electric furnaces tend to be less expensive but can cost more to operate due to electricity rates. Oil furnaces are less common today but may be required in older homes or certain regions.
Home Size And Heating Needs
Larger homes demand furnaces with higher output (measured in BTUs), which increases the price. The square footage and local climate both impact furnace sizing, impacting total new furnace installation cost.
Efficiency Ratings (AFUE)
AFUE (Annual Fuel Utilization Efficiency) measures how efficiently a furnace converts fuel to heat. Units with a higher AFUE are more expensive up-front but offer better long-term savings. High-efficiency models cost more but may qualify for rebates or tax incentives.
Existing Ductwork Condition
If ductwork needs repair or replacement, installation costs rise. Homes with no ducts, or with outdated systems, may require substantial work, meaning higher overall investment.
Labor And Regional Pricing
Installation labor rates vary by region and company. Areas with a higher cost of living typically see higher furnace installation fees. Labor typically covers removal of the old system, installation, hookup, and initial testing of the unit.
Average Furnace Installation Cost By Furnace Type
Gas Furnace Installation Cost
Gas furnaces remain the most common choice in the US. The total cost for installing a new gas furnace generally ranges from $2,500 to $6,000, including both the unit and labor. High-efficiency gas models can push costs higher but may yield energy bill savings.
Electric Furnace Installation Cost
Electric furnaces are simpler and cheaper to install, with total costs averaging $1,700 to $3,500. They’re best suited for smaller homes or regions with mild winters and lower electricity rates.
Oil Furnace Installation Cost
Oil furnaces, while less popular, cost about $3,300 to $6,000 including installation. These are often chosen in areas without natural gas access. Maintenance costs can be higher due to system complexity.
Call 888-896-7031 for Free Local HVAC Quotes – Compare and Save Today!
High-Efficiency Furnace Installation Cost
A high-efficiency furnace can cost $4,000 to $8,500 installed, depending on brand and capacity. However, lower energy bills and potential rebates can offset the initial higher price over time.
What Is Included In Furnace Installation Costs?
A typical furnace installation package may include removal/disposal of your old unit, new furnace placement, hookup to gas and electrical lines, ductwork connections, basic permits, initial start-up, and functional testing. Some companies offer thermostats or initial smart home integration as part of the total package.
Extra Costs To Consider With A New Furnace
- Ductwork modifications or replacement: $1,000 – $4,000 if extensive work is needed.
- Permits and inspections: $100 – $500, depending on locality.
- Home energy assessment: $150 – $400, recommended for optimal sizing.
- Thermostat upgrades: $100 – $350 for smart thermostats, possibly more for advanced systems.
- Asbestos removal (in older homes): $500 – $3,000, if required by local code.
- Removal of old oil tanks (for oil furnace replacements): $500 – $3,000.
Cost To Replace Vs Install A New Furnace
Replacing an existing furnace—especially if the same fuel type is used—is usually less expensive than a brand-new installation in a home without prior ductwork or gas lines. In replacement cases, costs are typically limited to the unit and routine installation labor. New installations may require infrastructure upgrades, raising total price by $2,000 or more.
Choosing The Right Furnace Size
Properly sizing your furnace is critical for maximizing efficiency and comfort. Oversized units short-cycle, wasting energy and money; undersized units struggle to heat your home. Sizing depends on square footage, insulation, local climate, and household needs.
- 1,200 sq. ft. or less: 35,000 to 70,000 BTUs
- 1,200 – 2,000 sq. ft.: 70,000 to 100,000 BTUs
- 2,000 – 3,000 sq. ft.: 100,000 – 130,000 BTUs
- 3,000 sq. ft. or more: 130,000+ BTUs, or zoning/multiple systems
A certified HVAC contractor can perform a Manual J load calculation to determine the ideal furnace size for your situation.
Energy Efficiency And Operating Cost Savings
Investing in a furnace with AFUE of 90% or higher can decrease energy bills by up to 30% compared to older models. Higher efficiency units cost more initially but lower ongoing heating costs. Consider available federal, state, and utility rebates for high-efficiency equipment.
Popular Furnace Brands And Their Costs
| Brand | Price Range (Unit Only) | Notable Features |
|---|---|---|
| Carrier | $2,000 – $5,000 | Broad efficiency options, robust warranties |
| Trane | $2,000 – $5,500 | Durable design, excellent SEER/AFUE |
| Goodman | $1,200 – $2,700 | Budget-friendly, solid value |
| Lennox | $2,500 – $6,000 | High efficiency, smart home integration |
| Rheem | $1,500 – $3,500 | Reliability, strong warranty support |
How To Save On New Furnace Installation Cost
- Get Multiple Quotes: Collect bids from at least three certified installers for best pricing and value comparison.
- Check Local Rebates: Utility companies and state/federal programs may offer cash back for high-efficiency furnaces.
- Time Your Purchase: Off-season (spring/summer) can yield lower rates due to decreased demand.
- Negotiate With Contractors: Some price flexibility exists, especially if you receive competing quotes.
- Consider Financing: Many HVAC companies offer 0% or low-interest financing for qualified buyers.
Professional Vs DIY Furnace Installation
While the idea of saving on labor may be tempting, DIY furnace installation is strongly discouraged. Modern furnaces require expertise in gas, electrical, venting, and code compliance. Improper setup can void warranties, pose safety risks, and may be illegal in many areas. Always use a licensed, insured HVAC professional.
Permits And Inspections
A new furnace installation typically requires a building permit and post-installation inspection by local authorities. Failure to follow code can delay utility service or result in fines. Professional contractors usually handle these requirements as part of the installation package.
Choosing A Furnace Installer
- Verify Licensing And Insurance: Protect yourself from liability and ensure quality by using licensed contractors.
- Check References And Reviews: Look for consistent customer satisfaction and prompt service.
- Evaluate Warranties: The best companies back labor and materials for several years beyond manufacturer warranties.
- Understand Maintenance Agreements: Regular tune-ups can be included and help validate manufacturer coverage.
Furnace Warranties And Lifespan
Most modern furnaces come with a 10-year limited parts warranty, with some offering extended coverage or lifetime heat exchanger guarantees. Labor warranties (usually 1-3 years) are provided by the installer. A well-maintained furnace lasts 15-20 years on average.
Call 888-896-7031 for Free Local HVAC Quotes – Compare and Save Today!
Potential Signs It’s Time To Replace Your Furnace
- Frequent Repairs: If repairs are mounting, replacement may be more cost-effective.
- Age Over 15 Years: Efficiency drops and reliability wanes after this point.
- Spiking Energy Bills: Older, inefficient units drive up operating costs.
- Uneven Heating Or Excessive Noise: Indicates possible system failure or outdated tech.
Frequently Asked Questions About New Furnace Costs
- Do new furnaces increase home value? Yes, especially if high efficiency models are installed and the home is in a climate where heating is essential.
- Can I get a tax credit for a new furnace? Select ENERGY STAR® models can qualify. Check with the IRS or your installer for current offers.
- Will my home warranty cover installation? Most home warranties exclude “routine” HV/AC replacements; check your specific policy for details.
- How long does installation take? Most replacements require 1 day; adding ductwork or new fuel lines can take longer.
Key Takeaways On New Furnace Installation Costs
- Typical total cost ranges from $2,500 to $7,000 depending on furnace type, size and home requirements.
- High-efficiency upgrades and ductwork modification can increase costs, but rebates may be available.
- Always use a licensed professional to ensure safety, code compliance, and proper warranty coverage.
- Get personalized quotes and consider total lifecycle costs, not just the up-front price.