Installed Furnace Cost in Minnesota
The cost of a new furnace and installation in Minnesota ranges from $6,200 to $11,600. This is more than the national average. Higher costs are due to homeowners needing larger furnaces due to colder climate demands and high labor costs.
Average Cost of New Furnace and Installation in MN – Table
| Furnace Type | Typical Size (BTU) | AFUE | Equipment | Install | Total Installed |
|---|---|---|---|---|---|
| Single-Stage Gas | 80–120k | 80–95% | $2,200–$3,400 | $3,000–$4,400 | $6,200–$7,800 |
| Two-Stage Gas | 100–120k | 92–96% | $3,200–$4,200 | $3,600–$4,800 | $7,400–$9,600 |
| Modulating / VS | 100–140k | 95–98% | $3,800–$5,400 | $4,000–$6,200 | $8,600–$11,600 |
Methodology: Based on ~180 recent installs/leads in Minnesota + MSRP bands, adjusted for MN labor and climate loads. Last updated Oct 2025. Standard installs include removal, install, minor ducting, and permit. Exclusions: major duct replacement, asbestos abatement, electrical upgrades.
Gas & Electric Rates in Minnesota
At $1.10/therm, heating with a 95% AFUE gas furnace costs roughly $1,600–$2,500 per heating season for a 2,000 square foot home.
At 14.2¢/kWh, heating with an electric furnace costs roughly $5,000–$8,500 per heating season for a 2,000 square foot home.
Minnesota Climate Zones & Heating Degree Days
- Zones: CZ 6A (Minneapolis, Rochester), CZ 7 (Duluth, northern MN). The colder your zone, the larger the furnace you will need. You can use Modernize’s furnace size calculator to get a ballpark estimate for your own furnace size.
- State HDD average: 8,400. HDD stands for “heating degree days” and measures how much energy you need to heat your home based on far below 65 degrees the average daily temperature is in winter. At 8,400, Minnesota has the fifth highest HDD in the country.
- Coldest metros: Duluth, International Falls, Bemidji
Home Heating Incentives and Rebates in Minnesota
As of October 2025, here are some of the state’s utility providers’ rebates and federal rebates (or other incentives) you may be able to take advantage of when replacing your furnace.
- Xcel Energy rebates: Up to $400 to $500 for high-efficiency gas furnaces. They also offer reduced electric rates if your home’s primary heating source is electric.
- Minnesota Energy Resources: Rebates for 92%+ AFUE furnaces ranging from $200 to $500. If you install a qualifying heating system by November 30th, 2025, they will add a bonus to your rebate, bringing the total range to $350 to $800.
- Federal 25C credit: Up to $600 for home energy-efficiency improvements, like a high-efficiency furnace. Be aware this credit expires at the end of 2025.
Codes & Permitting
Minnesota follows the 2020 Minnesota Energy Code, based on IECC 2018 with state amendments. Per this code, furnace permits are required in most municipalities.
City-Level Cost & Permit Guides
Minneapolis — higher labor rates, rebate info →
St. Paul (coming soon!) — local cost info, permit links, rebates →
Duluth (coming soon!) — colder climate load guidance and pricing →
Rochester (coming soon!) — Mayo utility programs and city-specific costs →
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Methodology
To supply the cost and energy information we provided above, we used 180+ Minnesota installations, national MSRP bands, RS Means labor data, ICC codes, EIA utility rates, and NOAA HDD data. This page is updated quarterly, and will next be updated in January 2026.
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