An electric furnace typically costs $2,000-$7,000 installed, while a propane furnace usually costs $3,500-$10,000. Equipment capacity, ductwork, local labor rates, fuel prices, and whether a propane tank or electrical upgrade is needed can shift the final quote substantially.
| Item | Low | Average | High | Notes |
|---|---|---|---|---|
| Electric furnace installed | $2,000 | $4,500 | $7,000 | Standard replacement with existing compatible ducts |
| Propane furnace installed | $3,500 | $6,500 | $10,000 | Standard replacement; tank work may cost extra |
| Electric furnace equipment | $800 | $2,000 | $4,000 | Common residential unit, before installation |
| Propane furnace equipment | $1,500 | $3,500 | $6,000 | Residential unit, excluding tank and installation |
| Annual heating expense | $600 | $1,400 | $3,000+ | Highly dependent on climate, home, rates, and use |
Installed prices for common home furnace sizes
For a straightforward replacement in a home with usable ductwork, an electric furnace costs about $2,000-$7,000 installed. A typical 10-15 kW unit in a 1,200- to 2,000-square-foot home often lands near $3,500-$5,500. Larger homes, difficult access, or electrical service upgrades can push the total higher.
A propane furnace commonly costs $3,500-$10,000 installed. A standard 60,000- to 100,000-BTU unit with an existing propane connection often falls around $5,000-$7,500. High-efficiency models, venting changes, or tank installation can add considerably to the project budget.
For the furnace alone, electric usually has the lower purchase and installation price; propane may deliver stronger heat output with lower operating costs in some locations.
Assumptions: U.S. contractor installation, standard-efficiency equipment, existing ducts in serviceable condition, and no major structural work.
What electricians, HVAC crews, and fuel lines add
Installed quotes combine the equipment with labor and any required electrical, venting, fuel-line, or site work. The table gives common ranges; a project may not need every listed item, and regional labor rates can change the total.
| Quote component | Electric furnace | Propane furnace | What changes the charge |
|---|---|---|---|
| Equipment | $800-$4,000 | $1,500-$6,000 | Capacity, efficiency, brand, and controls |
| HVAC labor | $700-$2,000 | $900-$2,500 | Replacement complexity and crew hours |
| Electrical work | $0-$2,500 | $150-$800 | Dedicated circuit, breaker, or wiring changes |
| Venting or propane line | $0-$500 | $300-$2,000 | Venting route, pipe length, and code requirements |
| Removal and disposal | $100-$500 | $150-$600 | Old unit size, access, and disposal fees |
| Permits and inspection | $50-$400 | $75-$500 | Local rules and project scope |
Electrical upgrades and propane-system work are the most common add-ons that make a basic replacement estimate rise.
Electric furnace installation labor is often $700-$2,000, while propane furnace labor commonly runs $900-$2,500. These amounts may include removal and startup, but contractor estimates do not use a uniform labor breakdown. Ask whether the quote includes thermostat setup, testing, permits, and disposal.
For an estimate that separates labor from materials, a rough labor calculation is . HVAC labor rates commonly run $75-$150 per hour, though a fixed installation quote is more typical than an hourly bill.
How capacity, efficiency, and wiring change the quote
Capacity should be selected through a home heat-load calculation, not floor area alone. Electric furnaces are commonly rated around 10-25 kW; moving from a smaller unit to a 20-25 kW model can increase equipment cost and may require a larger circuit or service. A panel or service upgrade can add roughly $500-$2,500, depending on the work.
Propane furnaces are generally sized by output in BTUs. A 60,000-BTU model may suit a smaller or well-insulated home, while a larger or leakier house may require 100,000 BTU or more. Larger capacity can add $500-$1,500 for equipment and may require changes to duct sizing, gas piping, or venting.
Efficiency also affects upfront price. Standard propane furnaces may have an annual fuel utilization efficiency (AFUE) rating near 80%; high-efficiency models rated around 95%-98% often cost $800-$2,500 more before installation. They can require condensate drainage and compatible venting, which may add $300-$1,200. Electric resistance furnaces convert electricity to heat at the point of use, so they do not have AFUE tiers comparable to combustion furnaces.
Check the electrical panel, propane line, and vent route before comparing equipment prices; a low-cost unit can become an expensive fit if those systems need alteration.
Existing ducts matter for both choices. Sealing or minor duct repairs may cost $300-$1,500, while substantial replacement can exceed $2,000. A furnace with mismatched airflow can run inefficiently or unevenly, so a quote should identify any proposed duct changes rather than treating them as an unexplained allowance.
Which furnace costs less to run in your climate?
Annual heating expense depends on local electricity and propane rates, winter severity, insulation, thermostat settings, and furnace use. A rough national planning range is $600-$3,000 or more per year for either system. In a mild climate or a well-insulated home, costs may be near the low end; a large, drafty home in a cold region can exceed the high end.
Electric furnace operating cost can be estimated from electricity use. A 15 kW unit running at full output for 1,000 hours uses 15,000 kWh; at $0.15 per kWh, that would cost $2,250. Actual usage is usually lower or higher depending on the home’s heat loss, run time, and whether the furnace cycles at full capacity.
Propane cost depends on delivered price per gallon and consumption. A gallon contains roughly 91,500 BTU, and an 80%-efficient furnace delivers about 73,000 BTU of heat from it. At $3 per gallon, that is about $41 per million BTU of delivered heat, before accounting for distribution losses or the home’s heating load.
Compare local utility rates and delivered propane prices using the same heat requirement; national averages alone cannot determine which furnace will be cheaper to operate.
A contractor or utility energy audit can help estimate the home’s annual heat demand. For a meaningful comparison, use the same insulation assumptions, thermostat schedule, and indoor temperature for both systems. If the household already pays a propane tank lease or delivery fee, include those recurring charges in the propane estimate.
Labor time and installation conditions in older homes
A like-for-like furnace replacement commonly takes one workday, or about 6-10 crew hours, when the equipment is accessible and connections are compatible. A propane installation with new venting or line work may take 8-16 hours. Electrical panel upgrades, duct modifications, or difficult basement access can extend the job to two days or more.
Labor cost varies by market. Urban areas and regions with high contractor demand can run about 10%-25% above national midrange quotes; rural areas may have lower hourly rates but higher travel or minimum charges. In cold-weather regions, busy fall and winter schedules can also reduce appointment availability.
Ask for the estimated crew size, working hours, and any separate travel or minimum charge before accepting a labor allowance.
In older homes, technicians may find undersized wiring, outdated breakers, unlined chimneys, or propane piping that does not meet current requirements. A basic diagnostic or site assessment may cost $75-$250 if it is not credited toward installation. Do not assume an existing connection is reusable until it has been checked for capacity and safety.
Three realistic electric and propane replacement quotes
These examples illustrate how scope affects the price; they are not fixed national rates. The labor-hour figures describe approximate crew time and do not include every contractor’s overhead or local taxes.
| Project | Equipment and scope | Labor and extras | Estimated total |
|---|---|---|---|
| Electric replacement | 12 kW unit, existing ducts and panel; $1,500 equipment | 8 hours at $110 per hour; $300 removal and permit | $2,680 |
| Propane replacement | 80,000-BTU, 95% AFUE unit; $3,200 equipment | 10 hours at $120 per hour; $600 venting and disposal | $5,000 |
| Propane conversion | 100,000-BTU furnace; $4,000 equipment, new line and vent work | 14 hours at $125 per hour; $1,800 system work and permits | $7,550 |
The conversion example costs more because it includes new fuel and venting work, not simply a more expensive furnace.
When comparing quotes, check that each includes the same furnace capacity, efficiency, thermostat, removal, disposal, permit allowance, and startup testing. A quote that excludes a propane tank or panel work is not directly comparable to one that includes those items.
Regional price differences for furnace installation
Installation prices can vary by roughly 10%-25% between lower-cost and higher-cost U.S. markets. Higher contractor wages, permit fees, and demand often raise prices in major metro areas and parts of the Northeast and West Coast. Rural markets can have lower labor prices but may add mileage or delivery fees, especially for propane equipment.
Climate changes the equipment choice and project scope as well as the price. Cold regions may require higher-capacity equipment or better insulation, while mild regions can often use smaller units. Propane delivery costs also vary by supplier competition, distance, tank ownership, and seasonal demand.
Request at least two local quotes based on the same load calculation and written scope rather than adjusting a national average by itself.
Permits are commonly $50-$500, but some jurisdictions charge more or require separate electrical and mechanical inspections. Confirm which party will obtain permits and whether the quoted fee includes reinspection if the installation needs corrections. Local code may require updated venting, shutoffs, or electrical protection.
Lower the furnace bill by controlling scope
Replacing a furnace before it fails can allow time to compare quotes and schedule work outside the busiest heating season. Avoid paying for emergency scheduling when the current unit can be safely maintained, but do not postpone repair if there is a fuel leak, unsafe venting, or electrical hazard.
Keep the project to necessary work. Reuse sound ducts, wiring, and venting when a licensed contractor confirms they are compatible and code-compliant. On propane systems, ask whether an existing tank and regulator can serve the new unit; tank replacement or installation can add $500-$2,500 or more, depending on tank size, placement, and site work.
Choose capacity from a documented load calculation, not a larger-is-better assumption that adds equipment and can worsen comfort.
Compare standard and high-efficiency propane options using the expected annual fuel savings and the full installed price difference. If the premium costs $1,500 and projected savings are only $150 per year, simple payback would take about 10 years, before maintenance and fuel-price changes. For an electric furnace, ask whether a heat pump is a practical alternative; it can cost more upfront but may use less electricity for each unit of heat in suitable climates.
Get itemized estimates from at least two or three licensed contractors. Ask for the model number, capacity, efficiency rating, labor scope, permit responsibility, warranty terms, and exclusions. Comparing identical specifications helps reveal whether one quote is genuinely less expensive or simply leaves out work another contractor included.