How Much Does an Electric Furnace Cost? (2023)

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Highlights 

  • The typical cost range for an electric furnace is $1,682 to $7,036. Nationally, homeowners pay an average of $4,359.
  • The size, type, and brand of furnace will affect the final price to install an electric furnace, as will the cost of labor.
  • Electric furnaces have several notable benefits, including safety, efficiency, and affordability.
  • Experts generally recommend that homeowners hire a professional to install an electric furnace—and in some areas, professional installation may be required.

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An estimated 10 percent to 15 percent of American homes are heated with an electric furnace. These affordable heating units offer some impressive benefits, including higher safety and efficiency levels compared to gas and oil furnaces. Electric furnaces are also more durable and cost less to purchase and install.

According to Angi and HomeAdvisor, the national average electric furnace cost is $4,359. This falls within a typical range of $1,682 to $7,036. Various factors influence the final cost of installing an electric furnace, such as the furnace size and type. Additional considerations such as ductwork repair or old furnace removal fees can also play a role in how much it costs to install or replace an electric furnace.

This cost guide will help homeowners estimate a new electric furnace cost, understand why switching to electric heating can be beneficial, and learn how to save on installation costs.

Electric Furnace Cost

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Factors in Calculating Electric Furnace Cost

There are multiple factors that influence electric furnace cost. Considerations such as furnace size, type, and brand all play a role in determining how much a residential electric furnace will cost to buy and install. While the national average electric furnace cost is $4,359, local influences can push the cost up or down. Understanding the following factors can help a homeowner accurately estimate their electric furnace installation budget.

Furnace Size

The size of a furnace may be the most influential factor for homeowners to consider when estimating electric furnace cost. Generally speaking, the larger the furnace, the bigger its price tag.

If smaller furnaces cost less, why doesn’t every homeowner simply buy the smallest unit on the shelf? It all comes down to the square footage of the home. Larger homes need larger furnaces, and figuring out the right size furnace for a home is crucial in the unit’s ability to maintain comfort levels year-round.

Electric furnace sizes are measured in British thermal units (BTU). The higher a unit’s BTU rating, the more heat it can produce. The following chart will help homeowners learn more about how an electric furnace’s size impacts an installation cost.

Square Footage Electric Furnace Size (BTU) Price Range
Less than 1,000 40,000 $800–$2,600
1,500–2,000 50,000–70,000 $1,100–$2,800
2,500–3,500 90,000–100,000 $1,400–$4,500

Furnace Type

There are several different types of electric furnaces available to consumers. Each type has a main feature that can make it the ideal choice for one home and eliminate it as an option for another. As one may assume, these different features offer unique pros and cons along with assorted price ranges.

For example, mobile home electric furnaces cost anywhere from $800 to $1,200. They include a blower and downflow installation, which is practical, since most mobile home ductwork runs beneath the floor.

High-efficiency units have a higher price range, costing between $800 and $4,500. Heat pumps are the best choice for homeowners on the hunt for an electric heater that offers lower running costs and less maintenance. However, their price range is even higher, starting at $4,200 and costing as much as $7,500.

Furnace Brand

There are multiple electric furnace manufacturers for a homeowner to consider when purchasing a new unit. Some brands are known for higher-quality units, while others are known for more affordable prices. Homeowners will want to take the time to research prices, warranties, reviews, and customer support when choosing a brand. The following are several for homeowners to consider.

When choosing between different price ranges, homeowners will want to consider how long they plan to be in their residence. Buying an electric furnace for a forever home warrants a higher price range with a focus on quality, while purchasing a similarly priced unit for a starter home may not be a money-savvy choice.

Labor

Homeowners who are trying to determine how much to budget for an electric HVAC system cost will want to consider labor in their equation. Electric furnace installations are very labor intensive, which can increase the total installation price tag.

When installing a brand-new unit, homeowners can expect to pay for 8 to 12 hours of labor. Replacements are usually a bit easier and can take as little as 3 or 4 hours.

HVAC professionals charge between $50 and $150 per hour, so labor costs for an electric furnace replacement or first-time installation can range from $300 to $2,500.

Additional Costs and Considerations

When homeowners are installing an electric furnace, there are several potential costs and considerations to keep in mind. While not every project requires steps such as gas conversion or thermostat replacement, it’s important for homeowners to take into account the following scenarios to avoid going over budget.

New Furnace Installation vs. Replacement

The cost of a new furnace installation will almost always be higher than the cost of a furnace replacement. When an electric furnace is being replaced, either due to necessity or an optional unit upgrade, it’s likely that all the necessary ductwork and wiring are already in place. When a new furnace is being installed, there’s a high possibility that more than just the furnace will need to be installed.

Installing new ductwork or wiring involves additional materials and labor, both of which drive up the cost. Homeowners can expect to pay between $1,300 and $8,400 to replace a unit or between $4,700 and $19,100 to install a new furnace for the first time.

Gas or Oil to Electric Conversion

The cost to switch from gas heat to electric heat costs between $2,600 and $4,200, which includes disconnecting and capping off the gas line and removing and disposing of the gas furnace. It also includes installing any new wiring. However, it does not include the potential cost of upgrading an electrical panel (a new circuit dedicated to the furnace can cost between $500 and $2,000) or the complete removal of the gas main line (which is not always necessary).

The cost to convert an oil furnace to electric is a bit higher, ranging from $3,600 to $5,200. This covers the full disconnection and removal of the oil line and oil tank; also included are the removal and disposal of the oil furnace. In addition, conversion costs cover the cleanup of any soot left behind by the oil furnace, along with wiring for the new electric unit. But again, this does not include a circuit upgrade if required.

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Electric Furnace and AC Installation

When an electric furnace is being installed in an area where there is also a great need for central air conditioning, it can make sense from a timing and financial perspective to install both at once. This process isn’t as complicated as it sounds, since both systems use the same ducts.

It costs between $3,750 and $9,800 to install central air conditioning without ducts, adding up to a total of $5,350 to $13,000 with a furnace. Packaged HVAC systems are another option, which include both the furnace and AC in one unit. These models cost between $10,000 and $14,000 with installation. Homeowners will want to remember that any additional ductwork will increase the total installation price by $1,900 to $6,000.

Old Furnace Removal and Disposal

One cost many homeowners don’t think to add to their electric furnace replacement cost is the removal and disposal of the old unit. Most contractors will include the cost of removing and disposing of an old furnace as part of their labor. The typical price range is $100 to $300 and may or may not be listed as a separate charge on a detailed invoice of a furnace installation job.

If, for some reason, a contractor will not dispose of an old furnace, a homeowner still has some options. Scrap yards will often take furnaces, depending on the type and model, to salvage for parts. Otherwise, a homeowner will need to reach out to their local garbage company or recycling program to learn about the options and related costs.

Permits and Inspections

Permits and inspections ensure construction and renovation work is completed correctly and safely. Without these checks and balances, an inexperienced homeowner could complete home improvement projects that aren’t up to code, leaving the residents and any future residents of the home in danger.

Not all home improvement projects require permits, but furnace installations typically do. Whether it’s a first-time installation or a replacement, permits ensure a furnace and any required electrical or ductwork installations are completed in a safe manner and in accordance with federal, state, and local codes.

Homeowners can expect to pay between $200 and $500 for a permit when installing an electric furnace, depending on where they live. Most contractors work this cost into their quote.

Thermostat Replacement

Homeowners replacing their electric furnace will want to consider replacing the thermostat as well. Signs that a thermostat is in need of replacement include frequent temperature fluctuations, energy bill spikes, and temperature readings that seem incorrect based on a home’s comfort level. It’s also recommended that any thermostat over 10 years old be replaced.

The average thermostat replacement cost is between $100 and $250. Generally speaking, more advanced thermostats, like smart designs, cost more than traditional models. Homeowners will also want to keep in mind that installing a replacement thermostat in a new location, compared to in an existing one, can cost an additional $300 for new wiring.

Electrical Panel and Wiring Replacement

There are several electrical upgrades that may need to occur during an electric furnace installation. The first is a new circuit. A circuit is a closed path that allows for the safe flow of electricity. Located in a home’s electrical panel, circuits ensure that electricity can safely reach each area and appliance in a home. In a home with an existing electric furnace, replacing the unit doesn’t require the installation of a new circuit.

But when an electric furnace is being installed for the first time, it’s likely that a dedicated electrical circuit for the appliance will need to be installed. The new circuit cannot supply power to anything else in the home other than the furnace. Otherwise, it will likely violate building codes and can leave a homeowner subject to fines and potential safety hazards.

The cost to add a brand-new electrical circuit to a circuit breaker box costs between $500 and $2,000. If the entire box needs an upgrade, a homeowner can expect to pay between $500 and $1,800 for a new circuit breaker box, while rewiring a house can cost up to $1,500.

Ductwork Repair or Installation

Electric furnaces are very efficient, yet while the appliance converts to heat nearly all the power it takes in, some of this heat can be lost as it travels through a home’s ductwork. This lessens the efficiency of the unit and can increase a homeowner’s electric furnace monthly cost. Keeping ductwork clean and in good working condition can minimize heat loss and boost the unit’s efficiency.

Cleaning ductwork costs between $250 and $500. If damaged ductwork needs to be replaced or if new ductwork needs to be installed, homeowners can expect to pay between $35 and $55 per linear foot. On average, this adds an additional $500 to $2,000 to the total cost of an electric furnace installation.

Framing

Framing isn’t a necessary step when homeowners are installing an electric furnace; if a budget is already stretched to the max, this cosmetic option can be put off for as long as necessary. However, there are benefits to building a dedicated furnace room. Blocking off the direct view of a home’s furnace can make the basement or associated space more aesthetically pleasing; a furnace room can also dampen the sound of a furnace kicking on and shutting off.

A properly built furnace room should have ventilation and be large enough to allow a contractor sufficient space to complete future repairs and maintenance on the unit. The cost to frame out a furnace room costs between $1,000 and $3,000, depending on the desired size and layout.

Running and Maintenance Costs

To ensure an electric furnace lasts as long as possible, homeowners will want to schedule routine maintenance. At $100 to $200, the cost of a furnace tune-up is generally low. An inspection can cost anywhere from $150 to $500, depending on what it includes.

Most inspections focus on ductwork, heating elements, and the electrical system. The cost of furnace cleaning is sometimes built into a maintenance fee. Homeowners may want to search online for “furnace inspection near me” and ask their chosen HVAC professional how to prepare for a furnace inspection to ensure every step of the process can be completed.

Is electric heating expensive? It depends, so homeowners considering an electric furnace installation are advised to take the cost of electric furnace heating bills into consideration. According to the U.S. Energy Information Administration (EIA), the average residential U.S. electricity price was 16.09 cents per kilowatt-hour in October 2022. Most electric furnaces vary in power between 10 and 50 kilowatts, which means a cost-per-hour between $1.61 and $8.05. If the average furnace runs 4 hours per day between all of its heating cycles, a homeowner can expect to pay the following to heat their home:

  • $6.44–$32.20 per day
  • $195.89–$979.42 per month
  • $2,350.60–$11,753 per year

However, homeowners are advised to keep in mind that it’s rare for any geographic location to require heating 365 days a year.

Tax Credits

There are several federal and state tax credits a homeowner may be able to take advantage of when installing an electric furnace. While most tax credits are applicable only to gas, propane, or oil furnaces, there are some electric furnaces, including heat pumps, that may qualify.

For example, according to ENERGY STAR, qualified HVAC improvements can earn federal tax credits equal to 30 percent of the installation cost (up to a maximum of $3,200 annually) until 2032. Homeowners will want to mention the installation of energy-efficient appliances, including furnaces, when discussing their taxes with a tax professional, who can then ensure they receive any available tax credits through current federal or state programs.

Electric Furnace Cost

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Types of Electric Furnaces

Homeowners can choose from multiple types of electric furnaces. Each type offers unique features and benefits, which influence the installation cost. The following are some of the top electric furnace types for homeowners to consider.

Forced-Air

A forced-air electric furnace is likely the type most homeowners are familiar with. It’s a compact unit containing both a heating element and a blower to move air over the element.

Electricity is used to heat air that is then forced through ductwork, entering different rooms of a home at the same time. Forced-air units heat entire homes at once, but they cannot cool a home. If air conditioning is a necessity, a separate unit will need to be installed.

A standard forced-air electric furnace costs between $700 and $1,100, depending on the brand and unit size. This estimate is for materials only and does not include labor.

High-Efficiency

AFUE, or Annual Fuel Utilization Efficiency, is a metric used to measure how efficiently a furnace converts fuel to heat. A standard-efficiency furnace provides 80 percent AFUE, while a high-efficiency gas furnace can offer between 90 percent and 95 percent AFUE. However, an electric furnace always has a 100 percent AFUE. In other words, electric furnaces convert 100 percent of the electricity they use into heat.

High-efficiency electric furnaces cost between $800 and $4,500. When purchasing a high-efficiency electric furnace, homeowners will want to have ductwork, window and door seals, and insulation inspected and updated to ensure heat isn’t lost as it circulates throughout the home, reducing the heating system’s efficiency.

Mobile Home

Mobile or manufactured homes offer unique challenges when it comes to installing furnace systems. They don’t offer the same floor space for the unit, and their ductwork systems tend to be more compact. Electric furnaces are ideal for mobile homes; they don’t require gas lines or venting, since there’s no risk of carbon monoxide leaks.

A mobile home furnace costs anywhere from $800 to $1,200. These smaller units are usually downflow furnaces, which means they take in air at the top of the home, warm it, and then disperse it into the home’s ductwork. They can operate on a main level of a home, compared to an upflow furnace, which needs to be placed in a basement to function efficiently.

Heat Pump

Heat pumps are smarter, cleaner heating systems that take heat from the ground or air around a home and redistribute it inside. When homeowners are deciding between a heat pump vs. a furnace, there are some important differences to know.

First, depending on the model, installing a heat pump can be less expensive than installing a forced-air electric furnace, and heat pumps tend to cost less to operate than standard furnaces. Heat pumps can also cool a home during the warmer months, while a furnace is only designed to generate heat.

Furthermore, heat pumps require less space and are typically installed outdoors, making them ideal for smaller homes that could lose valuable living space from a traditional furnace installation. One downside of heat pumps is that they’re often noisier than electric furnaces, but if they’re located far enough away from a living area or bedroom, the noise usually isn’t an issue.

Heat pumps cost between $4,200 and $7,500, depending on the unit’s size and type.

Benefits of Choosing an Electric Furnace

With multiple types of furnaces available to homeowners, which one offers the best heating features? There are pros and cons to every type of furnace; the following factors can help a homeowner determine the right one for their home.

Safety

Electric furnaces are safer than other types of furnaces because they do not use gas or oil, so there’s no need to worry about oil or gas leaks, which can lead to deadly explosions. They also can’t produce carbon monoxide (leaking furnaces are one of the most common causes of death from carbon monoxide poisoning). And since they don’t use fire to heat a home, electric furnaces have much less fire risk.

While most HVAC systems, no matter the type, are statistically and relatively safe, an electric furnace offers fewer risks than other types of furnaces, making safety one of the most important benefits to keep in mind.

Energy Efficiency

While it’s true that electricity costs more than gas or oil, electric furnaces are incredibly efficient. It takes far fewer units of energy to run a gas furnace. This means that when switching to an electric furnace, a homeowner has the opportunity to lower their heating bills and dependence on energy.

However, it takes effort to save on electric heating costs. To benefit, it’s essential that homeowners choose a high-efficiency electric furnace, keep up on maintenance appointments, and handle repairs as quickly as possible. A homeowner can also run their electric furnace efficiently by avoiding cranking up the thermostat and by turning the thermostat down when not home.

Affordability

Electric furnaces are more affordable than other types of HVAC systems. This is due to two main reasons. First, the units themselves are less expensive. Although investing in a highly efficient brand and model is recommended, even the most expensive electric furnaces cost less than comparable oil or gas furnaces.

Second, electric furnaces cost less to install, since they don’t require a gas line. They also tend to take less time to install, reducing labor costs. Additionally, electric furnaces last longer than gas and oil furnaces. While gas and oil furnaces have a lifespan between 15 and 20 years, an electric furnace can last between 20 and 30 years.

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Availability

Homeowners in urban and suburban areas generally have choices when it comes to the fuel they use to heat their homes, as electricity and gas are readily available. However, those who live in rural areas often don’t have access to natural gas as a fuel source. Because electricity is widely available, electric furnaces are simple to install in a home regardless of its geographic location.

Electric furnaces also allow homeowners to heat parts of their home not always connected to an HVAC system without any major renovations. For example, the best electric garage heaters can heat a hobby or workspace quickly and easily.

Durability

Part of choosing a new electric furnace is deciding which make and model to go with. While it’s wise to consider efficiency ratings and reviews, homeowners will also want to consider durability. Some brands are built to last longer than others, but the good news is that electric furnaces are by their very nature durable and long-lasting.

An oil furnace can last between 15 and 20 years, and a gas model has an average lifespan 15 to 20 years. However, an electric furnace usually lasts at least 20 years and, with routine maintenance and annual tune-ups, can run as long as 30 years. Helping a furnace last as long as possible means benefitting from more time between costly and disruptive replacements.

Electric Furnace Cost

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Electric Furnace Installation: DIY vs. Hiring a Professional 

In an attempt to install a cheap electric furnace, some homeowners wonder if they can do it themselves. But installing an electric furnace is not a DIY project for four main reasons.

  • Experience: A professional brings years of experience to the table when it comes to furnace installation. Without this experience, a homeowner is more likely to make costly or dangerous mistakes. They might go over budget or extend the installation timeline. And in some cases, they may have to call out a professional anyway. Even with online guides and videos, there’s just no substitute for years of hands-on experience.
  • Equipment: Removing an old furnace and bringing in a new one require manpower and equipment that a novice won’t likely have. There are also tools of the trade that can quickly add up if a homeowner has to buy them. Furthermore, when securing the furnace itself, contractors also often have access to better unit prices than consumers.
  • Safety: Without the proper experience and equipment, installing a furnace can be a dangerous project. When a homeowner is working with electricity, serious injury or even death is a real possibility. An improper installation can also become a longstanding safety hazard for the current or future residents of a home.
  • Legalities: A DIY furnace installation can void the manufacturer’s warranty. In some areas, it could even be illegal for a homeowner to install their own furnace without the required licensing.

So while a DIY electric furnace installation may seem like the best way to save on costs or get the job done quickly, it’s a risky approach that’s never recommended.

How to Save Money on Electric Furnace Cost

The cost of electric furnaces for homes can be overwhelming to those on a modest budget. However, there are several ways to save money on electric furnace costs. The following tips can help homeowners stay within a budget without compromising on quality.

  • Receive multiple quotes. Some contractors have better access to lower-priced units than others, while some charge more in labor costs. By receiving at least three different electric furnace installation quotes, you can be sure you’re receiving the best deal without compromising on quality.
  • Check for company rebates. Many HVAC manufacturers offer company rebates. While most of these offers apply only to the most expensive models, they can still be worth it when stacked with any local or state incentives for replacing an old HVAC system.
  • Wait for the off-season. In some cases, a new furnace installation can’t wait. When possible, though, waiting until the off-season for a furnace installation can help you take advantage of special pricing or save on emergency fees.
  • Offset the cost of heating. The savings don’t have to end after installation. You can take additional steps to offset the cost of electric heating, among them ensuring that your home is properly insulated and investing in HVAC service cost. Keeping operational costs as low as possible can reduce the lifetime cost of an electric furnace.

Questions to Ask About Electric Furnace Installation

Finding the best HVAC company to install an electric furnace starts with asking the right questions. Homeowners are advised to reach out to multiple professionals and compare their answers to determine which contender offers the most experience and best value.

  • How many years of experience do you have?
  • Do you work on electric furnaces often?
  • Are you licensed and insured?
  • Can you walk me through the inspection you’re doing?
  • Are you recommending repairs or a full replacement of my unit?
  • If you’re recommending repairs at this time, how much longer until my furnace will likely need to be replaced?
  • How much does furnace repair cost, and is it worth it considering the age of my unit?
  • Will you be completing the repairs/replacement, or do you use subcontractors for your work?
  • Will your company handle pulling any required permits and scheduling any required inspections?
  • When can my installation start?
  • How long will my installation take?
  • Do I need to complete any prep work before the installation?
  • Do you offer any warranties on labor or materials?
  • Do you require a down payment?
  • Do you offer financing?
  • Can you recommend an electric furnace brand?

FAQs

An electric furnace offers unique benefits, such as a long lifespan, high energy efficiency, and added safety. But the average electric furnace installation cost can leave homeowners wondering if it’s the best option for them. The following questions and answers can offer clarity to a homeowner trying to determine whether an electric furnace cost fits their budget and lifestyle.

Q. Are electric furnaces efficient?

All electric heaters are 100 percent efficient at turning electric energy into heat. However, heat can be lost in a home’s ductwork and through its exterior, making an electric furnace feel less efficient than it actually is. Regular ductwork maintenance and proper insulation techniques are highly recommended to ensure an electric furnace can deliver heat as efficiently as possible.

Q. Which is cheaper to run: a gas or electric furnace?

It is generally cheaper to run a gas furnace than an electric furnace, since gas prices are often lower than electricity prices. However, since electric furnaces cost less to install and tend to last longer, it may be worth using a gas vs. electric furnace cost calculator to see which is the more affordable option in the long run.

Q. Are electric furnaces worth it?

Homeowners must consider the upfront and operational costs to determine if an electric furnace is worth it. An electric furnace is more affordable to install compared to other types of furnaces. However, the operational costs can be higher over the unit’s lifespan compared to the operational costs of gas and oil furnaces. If an electric furnace’s benefits, including safer and cleaner operations, offset its higher operational costs, then yes, an electric furnace is worth it.

Q. How long do electric furnaces last?

An electric furnace can last anywhere from 20 to 30 years with proper usage and regular maintenance. The average lifespan of a gas furnace is only 15 to 20 years. To keep an electric furnace operating as long as possible, investing in a high-quality furnace and HVAC system is recommended, as less expensive units tend to burn out more quickly.

Q. How much is an electric furnace for a 2,000-square-foot home?

The cost of an electric furnace depends on a variety of factors, including the size of the home it needs to heat. A larger home requires a larger (and more expensive) furnace compared to a smaller home. A 2,000-square-foot home requires an electric furnace of around 70,000 BTUs. An electric furnace this size has a cost range between $1,200 and $2,800.

Q. What is the biggest disadvantage to having electric heat in a home?

For most homeowners, the cost to run an electric furnace is the biggest disadvantage. While electric furnaces are efficient, electricity is rather pricey compared to gas or oil. The lower upfront cost of an electric furnace can make it more appealing to homeowners in need of a heating system on a budget. However, they will want to keep operational costs in mind.

Sources: Angi, HomeAdvisor, Fixr

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