What Determines the Cost of a Furnace?

No matter if you need to replace a furnace or are simply researching furnace cost for a later date, the price might shock you. Furnaces can easily go for thousands of dollars. But what goes into this high price? Surely the parts alone can’t be that expensive, right?

The answer is that it’s complicated. Several factors impact the cost of a furnace, including the fuel source, size of your home, and climate.

Fuel Source

Much of the cost of a furnace is dependent on what type of fuel runs it. Oil tends to be the most expensive upfront, with the main benefit being that the cost to run it can be paid once or twice a year rather than for a monthly cost.

Natural gas furnaces are among the most common. They’re cheaper both upfront and monthly than oil furnaces, though are often more expensive upfront than electric models.

Electric furnaces tend to be one of the cheapest options upfront but are the most expensive monthly. However, this cost can be offset by solar panels or other renewable energy methods or reducing electricity cost.

Furnace Size

But what size furnace should you get? That is entirely dependent on the size of your home and how much space the furnace would have to heat. If you have a large home, you will need a large furnace.

If you get a furnace that’s too small, it will struggle heating the space and may experience excess wear and tear on components. On the other hand, if you get a furnace that’s too large for the space, it’ll shut off and on repeatedly and be far less efficient.

If the furnace is either too big or too small, the maintenance costs will rise, and it may break down more often.

Energy Efficiency

The United States’ Department of Energy states that the lowest efficiency furnace has an 80% efficiency rating. However, the majority of furnaces are between 83% and 89% efficiency.

The higher efficiency a furnace has, the less money it’ll lose in wasted fuel. A 90% efficient furnace, for example, wastes 10% of the fuel it consumes. However, the higher efficiency rating, the higher the cost of the furnace upfront. It is a long-term investment.

That is why it is highly recommended to get a furnace that’s above 90% efficiency, as it will save you a vast amount of money in the long run. Although, if you are planning to move in a few years, it might be more cost-effective to buy a cheaper, less efficient furnace for the time being.

Installation Cost

One of the biggest surprise costs is during furnace installation. This is especially true if you are switching fuel sources, which often requires replacing ductwork, wiring, and even drywall.

You might consider trying to install the furnace yourself, but we would strongly recommend against that. Incorrect installation can lead to a variety of risks, including fire and potential life-threatening gas leaks.

Other Factors to Consider:

Warranty

Many furnaces have up to a 10-year warranty, so be sure to check if yours does before purchasing a furnace replacement. However, keep in mind that most warranties require proof that you have kept up with maintenance in order to be valid.

Maintenance

Be sure to keep up with the routine maintenance of your furnace. Like most things, they require regular cleaning in order to stay in good condition. If issues are left unresolved, they will become far worse over time and lower the efficiency of the furnace.

Tax Credits

If you do end up going with a high AFUE furnace (above 95%), you may be entitled to a $150 tax credit. Be sure to check what tax credits may apply to your circumstances.

Insulation

Another thing to consider is if your home is well-insulated. If you live in a cold climate, insulation is especially important. Updating your insulation may be a worthwhile investment before choosing the best furnace for your home.

Have any questions or concerns? Schedule a call or appointment with one of our HVAC specialists.