When it is time to replace your home furnace you probably start by researching furnace prices. But there are many factors that contribute to the overall cost of a new furnace beyond the cost of the furnace itself. In this post we are going to start with the basics and in future posts dig in a bit deeper.

Characteristics of your new furnace, such as efficiency, size, and type, all impact how much money you are going to spend to both install and operate the unit. It takes a heating specialist to evaluate your home's sizeconfiguration, and age to determine the best and most cost-effective system to heat it. The quality of the installation effects the efficiency of the unit. Pick an experienced and well rated Heating specialist to help make this important decision. 


Gas furnaces make up the majority of systems in colder weather climates. Today's high efficiency furnaces consume at least 30% less fuel than older furnaces. New furnaces are significantly more quiet than older furnace models and as well as maintain their temperature at more constant level, resulting in more even heating. 


Heat Output

Heat output is measured in "BTUs". A higher BTU rating isn't necessarily better. A specialist can tell you what BTU and tonnage is appropriate for your home.

Furnace Efficiency

Older-model furnaces were usually rated 80 percent efficient or less. This means 20 percent of the heat generated was lost to waste. The top rated new models are 95 percent efficient or better, with some as high as 98 percent. Here is where the differences count. A small improvement in efficiency results in a decrease in utility costs.


Staging is not only about efficiency, but comfort as well. Older furnaces ran at full power, or were usually "single stage" (i.e. only ran at one setting and that setting was full blast). Newer high efficiency furnaces are one stage, two stage, or are fully modulating (meaning they use only the exact amount of power that they need to heat or cool your house at that specific moment). A two stage furnace paired with a smart thermostat usually will come on full blast to meet the earliest temperature you have set in your thermostat's schedule and then will stay on a lower BTU to keep your house at a comfortable temperature for the rest of the day, which takes less power (i.e. is more efficient). We could write an entire blog post on staging (and will). For the purpose of keeping it high level we have only covered a few aspects of staging here. Each person has their own idea of what comfort is. Some people prefer to have the heat on full blast, others value how quiet the system is above all else, and others only want the most efficient system they can buy.


Electric furnaces are usually paired with a heat pump. Heat pumps are an extremely high efficient way to heat a home.

The indoor unit is sized in the same way as a gas furnace. The indoor air handler holds electric heat strips that act as an emergency backup form of heat if the outdoor heat pump fails to work or the temperature outside gets so low that the outdoor unit cannot work efficiently. The outdoor unit not only heats the house but acts as an air conditioner as well — cooling your house in the summer heat. Heat pumps can be paired with any type of furnace, not limited to electric and gas. A heating specialist can discuss your options and associated costs.


Labor Required For Installation

The cost of installing a new furnace also includes labor costs. Here at Orbit we provide an up-front flat bid for the equipment and labor instead of charging hourly fees. Other HVAC companies will charge approximately $75 per hour for a licensed installer and $50 for a helper. This comes to $1,000 for labor alone for installation for most furnaces.

Removal And Disposal Of Old Furnace

  • If you are replacing an older unit, you must factor in the cost to remove the old equipment. 
  • Most contractors include removal of the old furnace as part of the quote, but some contractors charge an additional fee. 


  • Permitting and inspection costs vary according to the job. The HVAC contractor has to take the time to pull the proper permits and schedule the inspection. Depending on the job this could involve a visit to the City Planning office, or a return trip to your home to be present during inspection if it does not happen on the same day as installation.
  • Building codes and requirements may have changed since your last furnace installation, so prices may increase. It may be necessary to bring related equipment up to code in order to pass inspection. Your heating contractor should review the work to be done up front and tell you what work is necessary to pass inspection, including additional costs. 

Add On Costs

  • Hooking up the home for gas if there is not already an incoming line and a gas furnace is being installed
  • Insulation, duct and vent quality — Repairs or modifications may need to be made
  • If the new furnace differs in size from the existing unit, additional costs may be added to cover the additional work required for the installation
  • You may need a new thermostat. New furnaces often require more modern thermostats to function most efficiently
  • New electrical breakers or disconnects, possibly requiring an electrician and an additional permit to be legal

Gas Furnace Calculator

HomeAdvisor reports that homeowners spent between $2542 - $5299, with an average cost of $3839.

***Based on the true reported costs of homeowners in the Portland metro area.

At Orbit we provide an up-front flat bid for the total cost of installation. Our no surprise pricing includes all labor costs, removal and disposal of the old furnace, and all necessary permits. 

Contact us now for a free in-home estimate.