Cost to Replace or Install a Furnace

If you need a new heating system, you might want to think about how much it costs. Furnace prices depend on the type of energy source and size required, along with the details of setting up the unit in your house. This guide can help you figure out the approximate cost to replace or install a furnace, so you can plan for your next purchase.

What Affects the Cost to Replace or Install a Furnace?

Though a furnace replacement can be a significant investment, it can help you save money on your bills and future repairs. In general, you may end up paying several thousand dollars, but the specific amount depends on your application. Consider the factors that affect how much your new heating unit may cost:

  • Energy source: The energy source of your furnace can affect the price you end up paying. You can choose a gas, electric or oil furnace depending on your home's power source and how much you're willing to spend. You'll also have to pay to convert your furnace from one energy source to another if you switch types. This could make a big difference depending on your needs.
  • Size: Your furnace should provide enough heat for the whole square footage of your house. A bigger heating unit will cost more money than a smaller one. Of course, you need a larger one if you live in a spacious home or a particularly cold climate.
  • Installation: If you hire a professional to replace your furnace, you'll have to pay them for their labor. The specific price depends on your location, your furnace's accessibility and whether you need to replace your ductwork. You may also have to pay for permits and inspections to ensure the unit is up to code. Unless you having HVAC training, we recommend you use a professional for furnace installation.

Why Does the Energy Source of My Furnace Affect the Price?

The furnace's energy source often determines its efficiency rating and how much you pay each month to keep it running. Consider the most common types of furnaces to determine which one is best for your home and lifestyle.

Electric Furnace Installation Cost and Benefits

Though electric furnaces tend to have the least expensive upfront cost, they may add to your monthly utility bills as you heat your home. This configuration is more prevalent in areas that experience moderate climates and a few cold days throughout the year. They have the potential to last nearly twice as long as a gas furnace. It can be possible to save money that you would've spent replacing it in the future. However, this isn't guaranteed.

Here are the benefits of an electric furnace:

  • Since it doesn't need fuel storage, an electric furnace tends to be the most affordable to buy and install. The contractor may also charge you less for their services when the time required to set it up is shorter.
  • You don't have to maintain an electric furnace as frequently as other types of furnaces. Also, the parts are usually less expensive to repair or replace.
  • Electric furnaces operates quietly, so they won't interrupt your daily activities.
  • An electric furnace is more likely to perform well in areas with mild or moderate climates.
  • When maintained properly, an electric furnace has the potential to last several decades. This maximizes they're lower upfront cost.

Gas Furnace Installation Cost and Benefits

Gas furnace units are the most popular furnace type. They're especially popular in areas that experience harsh winters and cold temperatures for most of the year. Most gas furnaces use natural gas, but you can convert the heating unit to work with propane.

Some of the advantages of a gas furnace include:

  • Instead of using an oil tank, the utility company sends gas straight to your furnace, cutting down on the space you need for your unit.
  • Gas furnaces tends to have minimal issues during their lifespan. Most models are quite durable.
  • When you do need to hire a professional for repair, many common types of repairs are reasonably priced.
  • Gas systems can heat a home more quickly and reach higher temperatures than an electric unit. This makes them more suitable for colder climates.
  • Natural gas creates more heat per gallon than heating oil. It's more affordable than electricity, especially if you have it installed in your local neighborhood.
  • A high-quality gas-powered heating system will last, on average, 20 years.

Oil Furnace Installation Cost and Benefits

An oil furnace is the most expensive to purchase and install. This configuration has been around for a long time, but most homeowners don't use it anymore because of rising oil prices. However, you can consider these benefits to see if it may be an effective heating system for your home:

  • It is relatively affordable to hire a professional for oil heating repair services in the winter.
  • Heating oil is unlikely to put your house at risk of an explosion.
  • An oil furnace can last as long or longer than a gas furnace.
  • Heating oil is better for the environment than natural gas because it produces fewer emissions.
  • Oil heating is as effective as natural gas in cold climates.

What Does Size Have to Do With Furnace Prices?

You may want to have someone perform an HVAC load test to help you figure out which furnace size you should get for the space you need to heat. The bigger your unit, the more expensive it may be. If the heating system is too small, it won't warm up the home, but if it's too big, you may end up wasting money on utility bills each month.

Here are some other factors that may influence your furnace size:

  • Furnace heating capacity: You may also want to consider the British Thermal Units (BTU) capacity for your heating unit. This number can help you figure out how much fuel energy your furnace uses in one hour. A heating system with a higher BTU capacity can cover a spacious area. As you might expect, furnaces with higher BTU tend to cost more money. When you have a large space that needs heat, a bigger unit is well worth the investment.
  • Your local climate zone: You'll need a specific furnace based on your climate zone to provide enough heat with limited power. Consider how many cold days you experience throughout the year before investing in a heating unit. If you live in a cold, windy region, your furnace may need to be more powerful — and more expensive — than one built for a coastal climate that rarely gets low temperatures.

What Furnace Installation Costs Can I Expect to Pay?

When you hire a professional to install your heating unit, they will charge labor fees. After all, special skills are required to set up this complex machine. Consider these additional fees you can expect when working with an HVAC contractor:

Furnace Buying Labor Costs

In general, HVAC contractors include labor fees based on the following factors:

  • Your location: If the cost of living is higher in your area, you may have to pay more to hire a contractor.
  • How long the job takes: Most contractors tend to charge by the hour, so if your heating unit takes a long time to install, you might have to pay more money.
  • The accessibility of your existing furnace: If your current heating unit is difficult to reach, the contractor may charge you more money to use specialized equipment to help them access it.
  • Removing the old furnace: Besides installing the new heating unit, the contractor often removes your old furnace and disposes of it for you.
  • Installing the new heating system: If you're upgrading your furnace to a different size, shape or fuel size, the contractor may have to change the structure of your house to make space for the new furnace.

Furnace Duct Replacement

Have you kept your home's existing ductwork in good condition? If so, you might be able to use it with your new heating system. However, if you're upgrading in size, you'll need to have your contractor install more ducts throughout your walls and ceilings. Hiring a contractor to replace your ductwork can cost thousands of dollars. What you'll pay largely depends on the following factors:

  • Your home's size: Since you typically have to pay per linear square feet for your ductwork, the installation may cost more if you own a bigger home. In a multi-level house, you may have to install more duct runs to reach the different floors.
  • The use of return ducts: Even though most homes use return ducts, you might not need them if your home has an open floor plan or a first-floor HVAC system. With those configurations, a furnace or air handler can draw the air back into itself.
  • R-value of duct insulations: You may need to insulate your ductwork if you have it installed in an open space, such as an attic. Even though a higher R-value indicates more expensive insulation, you'll most likely save money in energy costs throughout the year.
  • Cutting into the wall or ceiling: If you need to remove drywall or drop-ceiling systems to install the ductwork, especially in multi-level homes, you may have to pay more money.
  • Mold remediation: If the contractor and their workers cut into the wall and find a significant amount of mold in your ductwork, you'll likely have to pay for someone to treat it before you can install new ducts.
  • Replacing zoning equipment: If you want to add ductwork, you may need to have the dampers removed and replaced. This will increase the cost of labor.

Installation Permits and Inspections

Depending on where you live, building permit costs for your new furnace can vary. They may cost a few hundred dollars or up to about one thousand dollars. Most companies include inspection fees in the permit's price to ensure the heating unit is safe to operate. The inspector will make sure the contractor installed the furnace according to code. Here are the items they'll review, based on the type of furnace you have:

  • Gas furnaces: If you have a gas furnace, the inspector will check the gas line, exhaust flue ventilation and fresh air requirements. This will help prevent the risk of explosion or carbon monoxide poisoning.
  • Electrical furnaces: Since these heating units don't use gas lines or oil tanks, the inspector only needs to check the electrical connections to ensure your furnace works properly.
  • Oil furnaces: The inspector will examine the oil tank and its line connections. They'll also make sure it has the proper ventilation to keep toxic gases out of your home. If you have a boiler, the inspector will also check the closed-loop connections.

How Can I Save Money on My Furnace Cost?

To cut down on the cost of your furnace, you can try to increase its energy efficiency to save money throughout its life span. Here are some ways you can reduce your energy expenses each month:

  • Update your heating equipment: Newer furnaces tend to have a higher energy efficiency rating than older ones, so upgrading to a new unit can decrease your energy costs each month. You may even qualify for a rebate to get reimbursed for your investment. Instead of putting too much wear and tear on your small furnace or wasting money on a large one, it's best to choose the right size heating unit for your property.
  • Adjust the thermostat: You might want to lower your thermostat temperature during the cold winter months. Turning your thermostat down 10 degrees to 15 degrees for at least eight hours per day can reduce your energy costs by 10%. To get used to this change in temperature, dress warmly. You can also use clockwise ceiling fans to circulate heat.
  • Schedule preventative maintenance: Before the cold season hits, consider hiring a professional to check your furnace for smooth operation. By investing in this yearly appointment, you can replace any damaged parts or clean the dirty components. As a result, you may be able to prevent costly emergency repairs in the future.
  • Clean out the furnace: Before you turn on the heating unit for the winter, make sure it's running efficiently by cleaning out the dust and debris. Remove any obstructions surrounding the heating system such as cardboard boxes. This will greatly reduce your risk.
  • Change the air filter: Your furnace's filter is supposed to keep the dust and allergens out of the heating system. It can get clogged and prevent a steady airflow over time. Clean or replace your air filter at least once every few months. This will reduce the wear and tear on your unit, and save you money.
  • Check and clean the vents: In the fall, you can walk through your house and check your ductwork registers for obstructions. Anything blocking your vents makes it harder for them to release heated air into your home. Remove any furniture blocking the vents and vacuum vents with a brush attachment.

Browse Our Collection of Furnaces

At Ingram's Water & Air, we have a wide selection of furnaces for your home, such as:

Review our various heating systems to find the right one for your property. Do you have other questions about the cost to replace or install a furnace? Contact us today at 270-575-9595.

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