New Furnace Installation and Replacement Pricing Guide 2023

On average, the cost for furnace replacement ranges from $1,800 to $7,000 depending on a range of different factors. In a few worst-case scenarios, the cost may rise to $40,000 as well. Figuring out the cost of a furnace replacement can be a tricky task and to make a decision you won’t regret the decision later, research is important. If you are looking for an answer to how much does a new furnace replacement cost, take the help of our calculations below to understand the pricing better.

Cost of a New Furnace Replacement

A new or replacement furnace cost mostly depends on the model and type of furnace you choose. A gas furnace costs around $3,000 whereas the cost of an electric furnace is around $2000 and geothermal furnaces go up to $40,000. Not only the purchase costs but the cost of installation and the size of your home also come into play when estimating the price.

So, to get a better understanding, let’s take a look at the installation charges of Furnaces.

Furnace Type Average Costs Cost per 100,000 BTU
Electric Furnace
$700 – $2,000
Gas Furnace
$1,200 – $2,400
Geothermal Furnaces
Upto $40,000

The Installation Cost of Furnaces

Cost of labor and professional installation range from $2500 to around $6000. The price of installation depends on the unit size, brand, and several other external features but the average amount you will have to spend will be around $4000.

Cost of a Gas furnace

Gas furnaces are one of the most popular options because you get high efficiency at a lower cost. You can get a Gas Furnace at around $1500 to $2500 along with the installation charges. With gas furnaces, you can easily convert to Propane by replacing the jets, gas valve, and burner, all of this will cost you anywhere from $30 to $100.

Cost of an Electric Furnace

Electric furnaces tend to do a pretty good job in moderate winters. Electric furnaces tend to be more expensive based on the amount of electricity needed to warm up the house. Along with the installation charges, Electric furnaces cost around $1000 to $2000. They are very capable of operating at higher efficiency and will last you for quite a while.

Cost of Oil Furnaces

Oil prices in the present day are touching the sky and this is the reason oil furnaces are not used as much as they were before. But this doesn’t make them any less efficient though. Oil furnaces cost around $2000 for just the furnace alone (you can get an electric furnace with the installation costs combined at this price). And you will end up with a $6000 final bill with the installation costs included. Oil furnaces cost the highest when compared to other types.

A Few Things that Affect the Cost of a Furnace

1. Size of the furnace

When the size is increased, the cost goes up almost immediately. While choosing a furnace, you are not just making a one-time payment, the utility bills you’ll have to pay should also be considered. If you purchase a furnace that is more than necessary for the amount of space you have, the utility bills are gonna pile up even though you are not using the furnace at its maximum potential.

To avoid getting into such an issue, make sure you have a manual load test performed to figure out which is the right size for the amount of space you have. If you go for a Gas furnace, an increase of 20,000 BTU will cost you around $400 in a small furnace. On the other hand, the same 20,000 BTU increase in a larger furnace will result in a cost of $1200. But with an oil furnace, regardless of the unit size, the increase of 20,000 BTU will only cost you around $300 to $600 dollars. So, the increase in size has a different effect on the price of the unit depending on the energy source of a furnace.

2. What is the energy source?

One of the most important choices you will have to make when it comes to buying a furnace is the energy source. What kind of energy are you going to use to heat up your house? When it comes to choosing the energy source, you need to take a lot of stuff into consideration.

For example, the cheapest out of all furnaces are electrical furnaces but the energy usage expenses are relatively high. On the other hand, Gas furnaces initially cost slightly more than electrical furnaces but as the cost of natural gas is low, the energy usage expenses are less. And in the end, as the cost of oil is out of the imagination, it’s definitely not an option. So, in our comparison, though the cost of the Gas furnace is higher, the energy usage costs are less which makes it the best choice.

3. Efficiency

The efficiency of furnaces now is relatively higher than that of the older models of furnaces used earlier. This basically means that you will have to take a lot of options into consideration. Let’s make a quick comparison to determine the best. 

The furnaces that cost higher are usually the ones with a higher fuel utilization efficiency rating and the ones that have a lower fuel utilization efficiency tend to cost low upfront money. But the thing you should note is that though furnaces with higher fuel utilization efficiency cost more upfront money, they will end up saving you a lot in the long run. Going from a medium efficiency standard to higher efficiency will cost you anywhere around $500 to $1000 but you will see instant differences in your utility bills.

4. Installation costs of the furnace

Installation of a furnace costs higher than the initial price of just the furnace. And the installation cost depends on how difficult it is to install, which city or area it is being installed in, is there any new ductwork to be installed? On average, the installation costs of a furnace reach the mark of a solid $4000. Some of the additional factors affecting the cost of installation are energy efficiency, brand, fuel type, size, etc.

Which Type of Furnace is Best For You?

1. Are the upfront cost for the furnace and its installation cost in your budget?

This is the first question you should ask yourself.

2. What are the durability and maintenance costs?

The cost of the unit mainly depends on how big the brand name is on the market.

3. What amount of heat is given out and how efficient is it?

Though a certain kind of fuel is expensive, the efficiency of a unit can either equal out the difference or overrule it.


Your home is the most important part of your life and every single decision made for it has to be done with care. Regardless of everything else, make sure you contact a qualified expert regarding which furnace will work best for you. But make sure you get as much information as possible before making a purchase.

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