2025 Electric Furnace Installation Costs: Full Breakdown for Homeowners

🏡 Introduction: Know Before You Buy

Installing a new electric furnace is a major investment, and understanding the full cost picture is essential to making an informed decision. In this comprehensive guide, Tony Marino breaks down every element of electric furnace costs in 2025, from equipment prices to installation, electrical upgrades, and hidden fees you might not expect.

💸 Average Installed Cost of an Electric Furnace in 2025

• Low-end basic systems (5-10 kW): $2,500 - $4,000 total installed

• Mid-range systems (10-15 kW): $4,000 - $6,000 total installed

• High-capacity systems (15-20+ kW): $6,000 - $9,000+ total installed

HomeGuide - 2025 Furnace Installation Cost Guide

🏰 Breaking Down the Components of the Total Cost

1. Furnace Equipment Cost

   • $1,000 - $3,500 depending on kW size and brand

   • Popular brands include Goodman, King, Stelpro, and Rheem

2. Installation Labor Cost

   • $800 - $2,500 for most residential jobs

   • New construction is often cheaper than retrofit replacement

3. Electrical Work (Panel Upgrades, Wiring)

   • $500 - $3,000 depending on your existing electrical panel

   • Dedicated circuit and heavy-gauge wiring often required

4. Permits & Inspections

   • $100 - $500 depending on local codes

   • Some regions require electrical inspections as well

5. Additional Materials

   • Thermostats, ductwork modifications, electrical boxes, disconnect switches: $200 - $1,000

Forbes Home - Furnace Replacement Costs

🔧 Cost Differences: New Construction vs. Replacement Installations

• New Construction:

  • Simpler install when framing is open

  • Easier ductwork runs

  • Lower labor cost

• Replacement:

  • Removing old unit adds labor hours

  • May require adapting ductwork

  • Electrical system may need upgrading to handle modern furnace amperage

Furnace Installation Guide

🌡️ Electrical Panel Upgrades: A Major Cost Driver

• Older homes with 100-amp service may need 150 or 200-amp upgrade

• Typical panel upgrade cost: $1,500 - $3,500

• Furnace breakers alone may require 40-80 amps depending on furnace size

Furnace Size	Amps Required	Breaker Size
10 kW	~42 amps	50 amp breaker
15 kW	~63 amps	70 amp breaker
20 kW	~84 amps	90-100 amp breaker

 

The Spruce - Electrical Panel Upgrade Costs

🤝 Ductwork Costs If Modifications Are Needed

• Minor duct adjustments: $200 - $600

• Full duct redesign: $1,500 - $5,000

• Poor ductwork reduces efficiency and comfort drastically

HVAC.com - Ductwork Costs

🌕 Hidden Costs Many Homeowners Miss

• Thermostat upgrades (smart models often required for rebates): $150 - $400

• Condensate pump installation (for humid climates): $200 - $500

• Air filter and filtration system upgrades: $200 - $1,000

• Temporary electric space heating if your old system fails before install date

🌬️ Are Electric Furnaces Cheaper to Install Than Gas?

YES in most cases:

• No gas lines needed.

• No venting, flue pipes, or combustion air intake

• Simpler permitting in many jurisdictions

NO if major electrical upgrades are required:

• High amperage requirements can be costly for older electrical systems

• Rural areas with older infrastructure often require significant upgrades

Consumer Reports - Furnace Buying Guide

🌧️ Does Climate Affect Electric Furnace Installation Costs?

• Southern states: Often cheaper due to smaller kW requirements

• Northern states: Higher kW systems mean bigger panels, more wiring, larger labor bills

• Cold climate heat loss drives up both equipment and installation costs

🥇 Do Rebates and Tax Credits Offset Installation Costs?

• Federal Inflation Reduction Act rebates (up to $2,000 or more)

• State energy efficiency programs

• Utility rebates for high-efficiency equipment

• Manufacturer promotions

Energy Star - 2025 Tax Credits

🏦 Cost of Running Your Electric Furnace After Installation

• Electricity is generally more expensive per BTU than gas, but prices vary greatly by state

• Operating cost depends on:

  • Local electric rate ($/kWh)

  • Furnace size (kW)

  • Winter severity

  • Home insulation

Region	Avg. Electric Rate	20 kW Furnace Daily Cost (8 hrs/day)
Pacific NW	$0.12/kWh	~$19/day
Midwest	$0.16/kWh	~$25/day
Northeast	$0.20/kWh	~$31/day
South	$0.14/kWh	~$21/day

 

U.S. Energy Information Administration - 2025 Electricity Prices

🔄 Can You DIY Electric Furnace Installation to Save?

• Legally risky in most areas

• Electrical codes require licensed electricians for panel and wiring work

• Improper sizing and wiring can void manufacturer warranties

• Liability risks for fires or injuries

• Insurance companies may deny claims if DIY-installed systems fail

National Electrical Code (NEC) Compliance Guide

🔓 How to Get the Best Value on Installation

1. Get at least 3 detailed quotes from licensed installers

2. Ask specifically about electrical upgrade needs

3. Factor rebates and incentives into pricing

4. Verify contractor licensing and insurance

5. Avoid rock-bottom bids that skip important safety items

🖐 Tony Marino’s Pro Tips to Control Your Furnace Budget

• "Don’t automatically size your new furnace to match your old one. Get a load calculation first."

• "If your electrical panel is already maxed out, factor that upgrade into your decision early."

• "Watch for hidden fees like permit costs and disposal of your old furnace."

• "Rebates often require specific paperwork—don’t leave money on the table!"

• "Bundle projects if you’re already upgrading your electrical system or adding solar."

📍 Get a Free Cost Estimate from The Furnace Outlet

Every home’s situation is different. The Furnace Outlet’s team of HVAC experts can help you estimate your full project cost, including any necessary electrical work. Visit The Furnace Outlet Electric Furnaces Collection to explore models or request a personalized quote.

In the next topic we will read about: The Real Cost of Keeping Your Old Furnace: Repair or Replace?