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.
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 operating costs. Propane furnaces cost about as much as natural gas furnaces do, though they offer the homeowner the ability to run independently of natural gas lines.
Cost of Natural Gas Furnaces
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.
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. 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.
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.
