4 Significant Factors That Go Into Furnace Installation Cost

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4 Significant Factors That Go Into Furnace Installation Cost

The first furnace was invented in 1885. These historical models burned coal to warm houses. They replaced wood-burning stoves and fireplaces as a more efficient heating method.

Since their invention, many improvements have been made. Unfortunately, even with so many improvements, furnaces do still break.

When a furnace breaks, it will often be necessary to replace the whole system. If yours has broken, you might wonder what factors play into furnace installation cost. Continue reading to find out everything you need to know.

What is a Furnace?

A furnace is one of the most popular home heating systems in the United States. It works by blowing air through ducts. These ducts deliver the heat throughout the home using air registers or grills.

A furnace can be powered in several different ways. The most common power methods include electricity, gas, and oil. If your home and furnace are older, it is likely powered by gas or oil.

4 Significant Factors of Furnace Installation Cost

Many factors contribute to furnace installation cost. The exact cost of projects can vary wildly, from a little more than $1,000 to $10,000 or more.

The four significant factors discussed below aren’t the only price considerations. They can, however, cause the price to shift greatly.

1. Type of Furnace

The type of furnace your house needs replaced factors into the total cost. The four types of furnaces you might have installed today are natural gas, oil, electric heat, and geothermal.

Some of the cheapest types of furnaces to replace are natural gas and oil. These both start at around $2,200. Natural gas burns cleaner than oil and the price of gas systems range higher than oil despite similar starting costs.

Electric heat furnaces are most common in new construction homes. Although electric furnaces only start at $1,800, they can range a lot higher than natural gas or oil systems. The starting $1,800 point is for a very small system that will only work for the smallest homes.

Geothermal systems are more advanced than their counterparts. For this reason, they are more expensive. Starting costs for these systems are about $3,000.

2. Heating System Size

The size of your heating system should correlate with your home size. The costs of a furnace for a one-bedroom home will be significantly different than the furnace installation cost for a four-bedroom.

If the heating system isn’t the right size, it isn’t going to work as efficiently as it should. If the system is too small, your furnace will need to work around the clock and still likely won’t reach the ideal temperature. This is both uncomfortable and costly.

If the heating system is too large, it will blast your home with too much heat initially and then shut off until the entire home is too cool. It will repeat this uncomfortable cycle and raise energy costs.

3. Labor

The cost of labor will vary between professional installation companies. These costs are based on many factors. The location of your home and the complexity of the project are key factors.

Don’t be surprised if you end up spending $75 or more an hour in furnace installation cost. The labor costs can end up being half the total project costs.

4. Removal Cost

If you need your furnace replaced, chances are high you also need your old furnace removed. The company you hire for installation will usually take care of this for you, but it has its own associated fees.

The costs of removal vary by state. You’ll have to consider the distance from your home to the dumpsite, ease of removal, and any environmental or dumping fees. The hourly labor costs will also be a factor.

How to Know When to Replace Your Furnace

Maybe you aren’t sure if you need to replace your furnace or fix it. Maybe nothing is wrong with the furnace but you’d like an updated model that is more efficient. Below are a few things to consider when deciding whether to replace your home furnace.


The age of your furnace is a big factor in whether it’ll need to be replaced. Most manufacturer warranties on furnaces last about twelve years. If taken care of, most high-efficiency furnaces will last homeowners anywhere from fifteen to twenty years.


The condition of your furnace is the biggest factor in determining whether it needs replacement. If a small piece breaks, you can often have a professional fix the part instead of replacing the entire system.

If pieces are breaking routinely, it might make more sense to replace the furnace. Financially, replacing the furnace will make more sense over constantly having repairs done.

Also, keep in mind major repairs can sometimes be more expensive than replacement. If your major repair will end up costing more than a new furnace, you’ll likely want to simply replace it.

Yellow Flames

In a properly working gas or oil furnace, flames will be a bright blue. This signifies the appliance is receiving enough fuel to run.

Yellow flames could indicate a serious issue like a gas leak. It might also tell homeowners that the furnace has become inefficient due to age or general wear and tear.

You can see the flames of your furnace by peaking through the vents on the appliance itself. If you see yellow flames instead of blue, call a furnace installation and repair company.

High Energy Bills

If your energy bills are higher than they should be, it could indicate a furnace that isn’t working properly. You can have a repairman check the furnace for issues.

For More Information About Furnace Installation Cost

For more information on the factors that determine furnace installation cost, contact us today. One of our associates would be happy to assist you and answer all your questions.