Top 8 Furnace Replacement Cost Factors
Summary:
• The cost to replace a furnace includes much more than the price of the furnace itself.
• Efficiency, home size, ductwork, electrical needs, and the complexity of the installation can all impact the cost of furnace replacement.
• Work with a Trane dealer for an accurate natural gas furnace replacement cost.
By Anne Fonda
#1: AFUE rating, or Condensing vs non-condensing furnace
AFUE stands for Annual Fuel Utilization Efficiency. The higher a furnace’s AFUE rating, the more efficient it is at using the fuel it burns to heat your home. The table below gives a comparison between various AFUE levels when they’re performing at their highest potential.
| AFUE Rating | Percent of Fuel Used in Heating | Percent of Fuel That Vents as Flue Gas |
| 80 AFUE | 80% or 80 cents for each dollar | 20% or 20 cents for each dollar spent |
| 96 AFUE | 96% or 96 cents for each dollar | 4% or 4 cents for each dollar spent |
| Up to 97.3 AFUE | 97.3% or 97.3 cents for each dollar | 2.7% or 2.7 cents for each dollar spent |
There’s another term you need to know: condensing furnace. Today’s condensing furnaces typically have an AFUE of 90 or higher. Conventional non-condensing furnaces have one heat exchanger. When a furnace burns natural gas, its exhaust/combustion by-products enter and travel through the primary heat exchanger.
The hot flue gas heats the metal as the gas makes its way to the exhaust outlet of the furnace. As this occurs, the hot metal heats the air circulating over the exterior of the heat exchanger. These systems typically vent through the chimney. The vent gas temperature is just barely high enough to avoid excessive condensation before discharging from the vent.
A condensing furnace has a secondary heat exchanger. When the combustion exhaust gases leave the primary heat exchanger, instead of exhausting to the outside, they enter the secondary heat exchanger. In the secondary heat exchanger, the flue gas releases additional heat, causing water vapor to form.
This change of state from water as a vapor to a liquid releases latent heat in the secondary heat exchanger, bringing the furnace to an even higher level of efficiency. Condensing furnaces can vent through the roof or an exterior wall.
A high-efficiency condensing furnace will cost more upfront than a non-condensing furnace with a lower AFUE. But greater fuel efficiency means you may be able to save money on your long-term natural gas bills.
Upcoming regulatory changes
The Department of Energy (DOE) mandates that residential gas furnaces manufactured after December 17, 2028, must meet a minimum efficiency standard of 95% annual fuel utilization efficiency (AFUE). This rule, recently upheld by a federal court, phases out non-condensing furnaces, many of which have an AFUE of 80%.
#2: Number of heating stages
The number of heating stages a furnace has will affect the price of the unit as well. The more stages, the more it will cost. Similarly, a furnace with a variable-speed blower motor will cost more than other models. But a two-stage or modulating furnace will generally provide more even heating and better comfort throughout your home than a single-stage furnace.
If you live in a warmer climate, you might be able to get by with a single-stage furnace, but your lifetime operating costs will be higher, and you might not be as comfortable.
#3: Home size & layout
The size and layout of your home will also affect the cost of the replacement furnace you need, as well as the air conditioner or heat pump you need for a system replacement. Work with an HVAC professional to accurately determine the number of BTUs you need for your replacement furnace, and the capacity in tons you need for a heat pump or AC unit.
Accurate system sizing is crucial to your long-term comfort and energy savings.
#4: Ductwork needs
Along with system sizing calculations, an HVAC contractor should assess the current condition of your ductwork, especially if your home is more than 20 years old. You may have leaky ductwork or deteriorating ductwork.
It should be repaired or replaced to help ensure your new furnace or HVAC system provides the heating and cooling you expect. This will add to the overall installation cost but should provide you with better comfort and reduced energy bills.
#5: Electrical needs
A gas furnace needs a dedicated circuit breaker and a safety disconnect switch. These may already be in place.
“Every furnace installation is different. You could look at system cost alone, but you must also include installation differences. Will the installers need to cut into walls? Where will the furnace be located? Is there electrical wiring already there? Is the electrical high enough? Answers to these questions will help determine your furnace replacement cost.”
- Amy Gulas, Senior Product Manager, Furnaces
Contact an HVAC professional to assess these questions with you and make a recommendation.
#6: Installation complexity
“Installation complexity can also affect the cost of furnace replacement. Is the furnace in the attic, closet, basement, or crawlspace? Is it in a conditioned area, or will there be freezing? There are so many variables,” said Amy Gulas, Senior Product Manager, Furnaces.
Again, work with your local Trane dealer to get accurate pricing.
A condensing furnace may require more work to install
Replacing a single-stage or two-stage non-condensing furnace with one of the same type is generally a simple switch-out. But replacing an older non-condensing furnace with a new high-efficiency condensing furnace requires more work, making installation more expensive.
That includes:
- Installing a condensate drain line
- Drilling two holes in an exterior wall or roof the size of the PVC pipe
- Installing PVC intake and exhaust pipes that vent to the outdoors above the snow line
Condensing furnaces have been around a while. If you’re replacing a condensing furnace, it may not require additional work on the drain line or intake and exhaust lines.
HVAC system replacement vs furnace replacement
The cost to replace an air conditioning unit and furnace will be more expensive than just replacing the furnace, but it can be the right move for system efficiency. This project will include the cost of the outdoor AC unit and the indoor evaporator coil.
Or, you may choose to install a hybrid heating system, where you pair an electric heat pump with a gas furnace. This option can help increase your energy efficiency and further decrease your carbon emissions.
#7: Local labor costs
Labor costs can vary widely across the country. If your area has a higher cost of living, your labor costs will be higher than areas with a lower cost of living. HVAC companies need to pay competitive wages to keep experienced HVAC technicians on their team.
#8: How you pay for your new furnace or HVAC system
Most people don’t pay cash when replacing a furnace. There are many HVAC financing options out there, with varying interest rates. Keep in mind that the higher the interest rate and the longer the payment period, the higher your total costs will be.
At Trane, we want you to get the comfort you need, now. That’s why we offer 0% APR financing through participating dealers.
What’s included in a Trane furnace installation cost?
At Trane, we like to quote you the installed cost. This includes:
- The price of the unit you choose
- The price of an AC unit or heat pump if you’re replacing the whole system
- Removal and disposal of old equipment
- New thermostat
- Needed electrical work
- Needed ductwork upgrades
- Installation of condensing line if applicable
- Reconnection of gas line and testing
- Reconnecting ductwork
Get accurate furnace replacement pricing from your local Trane dealer
If you’re looking to replace your furnace or upgrade your entire HVAC system, your local Trane dealer can help. Reach out today to get the home comfort you deserve.
Anne Fonda, Content Writer
A Content Writer with Trane Technologies, Anne Fonda researches topics and writes for Trane® and associated residential HVAC brands. She works in collaboration with Trane Technologies subject matter experts, offering easy-to-understand, informative content on complex topics. Her goal is to help consumers make informed decisions on the products and services they need.
She has written for HVAC and other service provider websites for over 16 years. Before transitioning to web content writing, Anne had a 14-year stint as an award-winning journalist. She graduated cum laude from the University of Missouri-Columbia School of Journalism.
When she’s not working, Anne enjoys playing word games, reading, gardening, spending time with family, and visiting gardens and museums.
Expert review by Amy Gulas, Senior Product Manager, Furnaces
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