How Much Does Replacing a Furnace Cost?

Gas Furnace and Water Heater

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When your current furnace is inefficient, noisy, or if it has entirely stopped working, your thoughts may run towards purchasing a new furnace. Furnaces have long lifespans ranging from 15 to 25 years, but they were not designed to last forever. Buying a new furnace can often be one of the best moves you can make to lower your energy costs and to keep everyone in your home warm and toasty through the cool months. A new furnace, while a big-ticket purchase, is manageable when you know how to fine-tune your choice to your home and to your own needs.

New Furnace Cost Structures

Energy Efficiency (AFUE)

A key indicator of a furnace's efficiency is Annual Fuel Utilization Efficiency (AFUE). AFUE is expressed in terms of a percentage. Higher percentages mean a more energy-efficient furnace. The U.S. federal government mandates that new furnaces should meet or exceed 80-percent AFUE.

The AFUE percentage will drive the cost of the furnace up or down. Expect furnaces in the high, 97.3-percent AFUE ratings to cost between 50- and 60-percent more than those in the 80-percent AFUE level.

Heating Stages

Heating stages, too, will affect the new furnace cost. Higher efficiency modulating furnaces will cost between two and three times more than single-stage furnaces.

Furnaces have single, double, or modulating stages of heat. For one or single-stage heat, the furnace will turn on or off. For two or double-stage heat, the heat will turn on, then will toggle between a higher or lower stage, depending on the room's needs. With modulating heat, the furnace will turn on, then will gradually ramp up or down dynamically in response to the room's temperature needs.

Fun Fact

Furnace stages can be compared to lamps. One-stage furnaces are like a lamp that can be turned either on or off. Two-stage furnaces are like a light that has a low and a high setting, in addition to off. Modulating furnaces are like lights with dimmer switches that can be gradually brightened or dimmed.

Type of Fuel

Furnaces require power to run. Most furnaces are powered by natural gas, electricity, oil, or propane. At the high end of the price range, gas furnaces can cost as much as 60- to 75-percent more than comparable electric furnaces, though this cost is offset by their lower operational costs. Propane furnaces cost about as much as natural gas furnaces do, though they offer the homeowner the ability to run independently of electric power lines or natural gas lines.

Cost of Natural Gas Furnaces

Cost AFUE % Number of Stages Extra
$1,900 to $2,900 80 1  
$2,000 to $3,500 80 1 Quiet blower
$3,000 to $5,000 80 2  
$3,400 to $5,250 92 1 EnergyStar
$3,600 to $5,700 96 1 EnergyStar
$4,200 to $6,800 97 2 EnergyStar
$4,700 to $7,900 97.3 Modulating EnergyStar

The cost of gas furnaces ranges from around $2,000 to $8,000. If your house already has a gas line, a gas furnace is a wise purchase since gas tends to be less expensive than electricity. Natural gas furnaces are fairly clean burning and easy to maintain. Because so many gas furnaces are on the market, it can be easy to find a model that suits your needs and at a price level that feels comfortable.

Pros
  • Relatively clean burning

  • Less expensive to run than electric models

Cons
  • Can be noisy when the burner turns on

  • More expensive to purchase

Cost of Electric Furnaces

Electric furnaces cost between $1,500 and $6,000. Best for mild climates where heating demands are low, electric furnaces can be installed anywhere that has electric service. While less expensive to purchase, electric furnaces cost more to run because electricity is typically more expensive than natural gas, oil, or propane.

Pros
  • Inexpensive to purchase

  • Clean burning

Cons
  • Expensive to run

  • No heat if the power goes out

Cost of Oil Furnaces

Oil furnaces cost between $7,000 and $10,000. Oil furnaces are mainly found in colder climates, often the northeast U.S. and Canada. Heating oil is trucked to the home and then is piped into exterior tanks that are often buried underground. This allows the home to remain independent of the power grid. Oil furnaces are moderately energy-efficient, returning AFUE ratings between 80- and 90-percent. Many older homes already have buried oil tanks. If these tanks are in good shape, they can be used for oil furnaces.

Pros
  • Can help utilize existing tank

  • Independence from power grid

Cons
  • Fuel must be delivered

  • Potential of tanks leaking

Cost of Propane Furnaces

The cost of propane furnaces ranges from around $2,000 to $8,000. Essentially, this is the same cost range as for natural gas furnaces, since gas furnaces can be converted to propane with an inexpensive kit. While natural gas and electricity are most widely used in homes, nearly 10-percent of U.S. homes use propane as their energy source. Propane furnaces are highly efficient, with AFUE ratings ranging from 90- to 98.5-percent.

Pros
  • Independent power source

  • Burns clean

Cons
  • Tanks are stored above-ground and can be unsightly

  • Tanks must be refilled