How Much Does it Cost to Install a Furnace?

Are you in the market to install a new furnace? If so, you can typically expect to pay from $2,400 to $5,700, for materials and labor.

Cost to install a furnace will vary according to the following:

  1. Fuel type (most commonly natural gas, electric, or oil)
  2. Furnace's efficiency category
  3. Square footage of your home
  4. Local climate
  5. Whether your home has ductwork in place and its condition
  6. Your family's individual habits and heating requirements

Find the Best Furnace Type

Fuel

Average Furnace

Average Installation

Fuel Cost

Requirements

Safety

ELECTRICITY

$700

$2,100

Most costly

Adequate electrical system, ductwork

No danger of  CO

NATURAL GAS

$1,300

$2,500

Least costly

Ductwork, gas line

CO emission must be safely vented. Gas leak risk.

PROPANE

$1,350

$2,500

Moderate

Storage tank, local propane supplier

Needs proper adjustment to avoid CO emission. Leak risk.

OIL

$2,000

$5,000

Usually costly, cost fluctuates

Storage tank

CO emission must be safely vented. Oil may leak into soil & drinking water.

What Size Furnace Do You Need?

The size of furnace you need depends on the size and construction of your home, as well as how cold the winters are where you live. Furnace capacity is measured in terms of British thermal units (BTUs).

In a mild climate, you'll need a minimum of 25-30 BTUs per square foot, with a correspondingly higher number for colder regions.

Consult your HVAC professional for a detailed load calculation of your heating requirements. Remember that an oversized furnace will cost more for installation and be less efficient for your home.

Cost Breakdown

  • Materials --Material cost includes the furnace, heat registers, new or upgraded ductwork, exhaust port, and miscellaneous supplies.
  • Labor -- Labor cost includes removal and disposal of your old furnace, as well as installation of the furnace and an exhaust port. It will usually also include installation of new ductwork, if necessary, or upgrading of the ductwork already in place. However, if asbestos must be removed from the existing ductwork, that will add to the labor cost, as will the disposal of an no-longer-wanted fuel oil tank.
  • Permit -- Your area may require a building/mechanical permit, and perhaps also an inspection, for a new furnace installation.
  • Estimate -- The initial estimate, which may include an onsite inspection, is often free.

Get the Most for Your Money

For the most efficient heating, seal air leaks and improve your home insulation, as well as installing a new furnace.

Check out whether an energy-efficient furnace installation will make you eligible for a financial incentive -- a rebate or tax credit through your utility company or the federal, state, or local government.

Use programmable thermostats to ensure the heat is operating only when you will actually need it.