How Much Does an Electric Furnace Cost?


If your current heating system isn’t performing up to par, it’s time to consider a repair or replacement. Furnaces are a great option for homeowners in the market for an energy efficient system. This type of heating unit can adjust its power level to meet your home’s temperature needs rather than cycling on and off like a traditional HVAC system. It also circulates indoor air more frequently, which improves the air quality in your home.

Furnaces come are available in three main types: gas, oil, and electric. Electric is the most common, but may not work for everyone. Choosing the right system for you may be a tough decision, so let’s talk about what factors make an electric furnace a good fit.

Why Choose an Electric Furnace over Gas?

Oil furnaces are the most expensive option, and they require having oil delivered to your home. Most people prefer either natural gas or electric. When debating between these options, consider which resource is most available to you.

If your current unit is an electric furnace, you already possess the requisite electrical wiring for a new one; but if you currently use gas or oil and want to switch to electric, you will need to have some electric work done to as part of the installation process. But the setup is just one thing to consider; many homes do not possess natural gas hookups or even have access to natural gas at all. Homes that endure harsh winters are usually better off with a gas furnace, whereas electric furnaces are suited to mild winters.

You may have heard that the operating costs of an electric furnace tend to be higher, and this is true; electricity is pricier than natural gas. However, the upfront costs tend to be lower than those of gas-based units. But avoid crunching numbers without considering the labor. You may be tempted to choose gas simply because the operating costs are lower, but if this means having a professional install a gas hookup, the cost of the project may outweigh your monthly energy savings.

Electric furnaces are compatible with solar. Since the lifespan of both gas and electric is about 20 years, this is an important factor to consider if you’re planning to convert to solar anytime soon. Electric furnaces are also safer, as they do not involve a flame or potentially dangerous gases like carbon monoxide.

Cost of Electric Furnace Installation

The cost of this project can be broken into two parts: materials and installation. Take a look at the guide below to get a ballpark figure for your project.


The unit itself will most likely cost you between $1000 and $2700 dollars. While it may be tempting to choose an affordable option rather than one with advanced technology, keep in mind that you may recoup the extra investment in energy savings. If you live in a cold climate, choose a unit with an annual fuel utilization efficiency (AFUE) rating between 95 and 100 percent. If you live in a mild climate, it may be hard to justify the higher cost of high-efficiency unit when 80 to 90 percent may be the most economical. Make sure to gather all the necessary data, including electricity rates in your area and how much you are currently spending on electricity, before you make your decision on a product.


When you hire a contractor, he or she will first remove and dispose of your existing units and its components, then assemble the new unit and connect it to existing ductwork, configure the controller, and make sure it operates properly. Labor will most likely cost you between $1000 and $2000, but the cost will increase if you’re installing a completely new system or ductwork. Don’t rely on standard estimates—instead, call reputable contractors to get quotes. You won’t know the exact cost until the contractor takes a look at your home.

Overall, the costs to install an electric furnace range from $2000 to $5000, but again, don’t rely on any estimates without talking to a professional about the work that needs to be done in your home.

In order to make your electric furnace as efficient as possible, optimize the energy efficiency factor in your home. Better insulation can make a world of difference. Other upgrades, like energy efficient windows and weatherstripping, can keep that hard-earned heat where it belongs: inside your home.

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