How much does Gas furnace installation cost?

Furnaces have a lifespan of 15 years or longer. But keeping an old furnace running isn’t always the best idea, if it translates into repairs and high energy bills. Like driving a gas-guzzling clunker, you’re going to feel it at the pump. 

That’s especially true now, because the newest generation of high-efficiency furnaces  can outperform all models that came before. And that means lower fuel costs. So if your furnace is old or falling apart, it may be time for a replacement. 

Buying a new furnace is almost always a package deal: An HVAC contractor—a professional who handles heating, ventilation, and air conditioning systems—comes to your home to assess the right type of furnace for your needs, orders the furnace replacement, and installs it. 

Learn more: Why you need a good heating and cooling contractor: A homeowner’s guide.

Even if you buy a furnace through a home improvement center, the store arranges set-up by furnace installers. With this in mind, the costs discussed here cover both a furnace and its installation.

In most situations, your new replacement furnace will utilize the same fuel type that the old one did—natural gas or electricity, for example. If you have an oil-burning furnace, your HVAC contractor may recommend converting to a new gas furnace for better efficiency.

The total cost of a new furnace depends largely on the equipment. New gas furnace prices are higher than electric ones because electric furnaces have fewer parts. Combustion furnaces (either gas or oil) also require connection to a flue for venting toxic gases; an electric furnace doesn’t. 

Learn more: How much does it cost to repair a furnace?

The following numbers represent national averages for furnace replacement costs, including installation, in a typical 1,600–2,000–square-foot home.

Gas (natural or propane) furnace installation 

Electric furnace installation 

Oil furnace installation

All of the above-mentioned costs assume the new furnace will be replacing an old one. It will be connected to existing ductwork, fuel lines, and electrical circuits—and, if it’s a gas or oil furnace, it can be connected to an existing flue for ventilation. 

The following can increase the price of furnace installation:

Labor costs can also increase with furnace complexity. You’ll pay a premium for:

Not all furnaces are the same. The more special features or functionality, the more they cost. Several factors make a big difference between a higher or lower total price:

Energy efficiency. AFUE (annual fuel utilization efficiency) is a measurement of how much fuel burned will be turned into heating energy—a higher rating means better energy performance. Minimum for new furnaces is 78; a rating of 96 or more indicates a high-efficiency model. Furnaces with high AFUE ratings can cost 50–100% more than lower-efficiency models, but save money over time due to lower utility bills. They make sense if you plan to stay in your home for more than 10 years.

Learn more: 13 ways to save money on your heating bill

Technology. Some furnaces cost a little more up front but provide better long-term performance. Variable-speed blowers, for example, are more expensive but quieter and use less electricity than single-speed blowers. 

Heat output (BTUs). The number of BTUs (British thermal units)—the heat output of a furnace—is another pricing factor. You’ll pay more for a unit that can efficiently heat a larger space. For example, high-output units with 120,000–140,000 BTUs can cost 2–3 times more than units with 40,000–60,000 BTUs. Local climate, size of your home, home age, quality of doors and windows, weatherstripping, insulation, and annual heater use all play a role in the output you’ll need.

Because each of these cost factors affects both the long-term performance of your furnace and your HVAC contractors’ bids, be sure to discuss them in depth. That way, you can compare “apples to apples” when scrutinizing competing bids.

Learn more: How to replace home air filters

By upgrading from an oil-burning or standard-efficiency furnace to a high-efficiency furnace, you may qualify for incentives from local gas companies or tax rebates from the federal government. In 2021, Energy Star–certified equipment, with an efficiency rating of AFUE 95 or better, can receive a $150 credit. Call your local gas utility for information about additional incentives.

For the most accurate new furnace installation price, ask for quotes from 3–5 different HVAC contractors. The bidding process can also help you make informed decisions, as you’ll get a variety of opinions and advice from different local pros.

If you want to protect your equipment with regular maintenance (and basic repairs), consider setting up a maintenance contract with the HVAC company that installs your new furnace. This typically costs $150–500 per year. 

Most new furnaces have a 10-year warranty on parts and a 20-year warranty on the heat exchanger. If your old furnace failed within the warranty period, be sure to explore whether the manufacturer will pay the repair costs.

Why is furnace installation so expensive? 

Furnaces are complex and highly engineered pieces of equipment that require a high level of installation training and competence. 

Can I replace my own furnace?

Licensed HVAC professional contractors are required by most states to install gas—and, in some cases, electric—furnaces because of the many safety considerations involved. Putting in a heating system is not a DIY job.

“Each HVAC system requires specific design requirements to match it to the home it’s being installed into,” says Joshua Rodriguez, installation manager at Fire & Ice Heating and Air Conditioning, Inc. in Columbus, Ohio. “This requires specialized training and tools to do the job right.” 

How long does a furnace installation take?

An average furnace installation can usually be done in less than a day. Jobs requiring new hookups or ductwork—or in difficult-to-access situations—can take 2 days. 

Find an HVAC contractor near you.