How Much Does It Cost to Install a Propane Furnace?

National Average Range:
$3,000 - $6,000
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Reviewed by Adam Graham. Written by

Forced hot air furnaces are not a recent invention. They have been around for decades with many different types of fuel used over the years, from wood and coal to newer materials like liquid propane (LP). These are some of the cleanest burning and efficient furnace types on the market and are a good choice for homeowners who do not live near a gas line.

Propane furnaces come in a range of sizes, quality, and efficiency, which creates a wide range of prices. The average range for propane furnace installation is between $3,000 and $6,000, with most homeowners paying around $4,000 for a replacement high-efficiency unit for a 2,000 sq.ft. home, installed with no modifications. This project’s low cost is $1,800 for a basic standard-efficiency furnace with no modifications. The high cost is $7,000 to replace a high-efficiency furnace with a new drain and HEPA air filter.

Propane Furnace Prices

Propane Furnace Installation Costs
National average cost$4,000
Average range$3,000-$6,000

Propane Furnace Installation Cost by Project Range

Basic standard-efficiency furnace installation with no modifications
Average Cost
High-efficiency furnace replacement for a 2,000 sq.ft. home with no modifications
High-efficiency furnace replacement with a new drain added and HEPA air filter

What Is a Propane Furnace?

Propane 1 furnaces are a heating system that uses propane. It burns fuel to heat air. This air is forced through a system of ducts in the home and exits into each room. This is called a forced hot air system.

Propane, also known as liquid propane or LP, is a fuel delivered to your home and stored in tanks. A fuel line connects these tanks to your unit, allowing it to burn the fuel for the system to work.

Many natural gas furnaces also burn LP, with some specifically designated as propane/natural gas furnaces. Often in order to work, they must be set up to burn one or the other fuel. Othes may be specifically sold to burn LP from the start. These can also be converted to burn natural gas later with a conversion kit.

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Propane Furnace Cost By Type

Like natural gas furnaces, propane units come in three basic types - single stage, two stage, and modulating. This refers to how the furnace turns on and off and at what level it operates. Single-stage units operate at a continuous level, while two-stage units have two levels. Modulating units may have multiple levels to operate on. Switching between levels can make yours more efficient. This means that while single-stage furnaces cost the least, they also cost the most to operate. Below are the uninstalled costs for each type.

Cost per Unit of a Single-Stage, Two-Stage, or Modulating Propane Furnace

Cost per Unit of a Single-Stage, Two-Stage, or Modulating Propane Furnace

TypeAverage Costs per Unit (Materials Only)
Single-Stage$600 - $1,300
Two-Stage$800 - $2,800
Modulating$1,300 - $3,600

Single-Stage Propane Furnace Cost

The price of a single-stage propane furnace averages $600 to $1,300. Single-stage units have two settings - on and off. When they are on, they blow at top speed to warm your home and shut off once they reach temperature. This can mean periods when your home feels colder because the temperature must drop a few degrees to turn it on again. This can mean your unit uses more LP to bring the temperature up constantly. So, while they are less expensive to purchase, they cost more per month in energy bills.

Two-Stage Propane Furnace Cost

The price of a two-stage propane furnace ranges from $800 to $2,800. Two-stage units have high and low settings. When bringing the temperature up, it uses a high setting. It then uses a low setting to maintain the temperature. This results in a more comfortable home. The unit uses less fuel because it can switch to a lower setting while having fewer hours of letting the temperature drop.

Modulating Propane Furnace Cost

The price of a modulating propane furnace is $1,300 to $3,600. A modulating unit is also called a continuous furnace. Once on, it stays on, providing continuous heat. However, it has multiple settings to switch between higher and lower settings. This means your home stays warm all the time with no temperature drops. While the unit runs continuously, it does so at much lower levels, so your fuel bills are lower.

What Size Propane Furnace Do I Need?

The size you purchase needs to match the size of the area you are heating. An undersized furnace will struggle to heat your home and often wears out too soon. An oversized furnace costs you more in energy bills each month. Ensure that yours is correctly sized to your property to get the most out of your system.

Your installer calculates the best size for your home based on your needs, but making a few simple calculations yourself narrows it down. First, determine your home’s square footage because furnace sizes are measured in how many BTUs they produce per hour. BTU stands for British Thermal Unit, which is the amount of energy needed to heat a pound of water one degree Fahrenheit.

Square footage narrows down your BTUs, but there is a wide range for each home size. For example, a 2,000 sq.ft. home may need between 63,000 and 126,000 BTUs to heat it comfortably. To narrow this down, you also need to know your climate zone.

The U.S. Energy Information Administration’s climate map is used to discover your zone. Each zone has a calculated range of BTUs per square foot, with the lower number being best for well-insulated homes and the higher number for homes that are not well-insulated.

Propane Furnace: BTUs per Square Foot by Zone

ZoneBTUs per Square Foot
Zone 130 - 35
Zone 235 - 40
Zone 340 - 45
Zone 445 - 50
Zone 550 - 60

Once you determine your zone and square footage, multiply your square footage by one of the two numbers in your zone. Below are the average BTUs that you will likely need based on your square footage.

BTUs per Hour Needed to Heat a 800, 1,000, 1,200, 1,500, 2,000, or 2,500 Sq.Ft. House

BTUs per Hour Needed to Heat a 800, 1,000, 1,200, 1,500, 2,000, or 2,500 Sq.Ft. House

Square FootageBTUs
800 sq.ft.36,000 - 40,000
1,000 sq.ft.45,000 - 50,000
1,200 sq.ft.54,000 - 60,000
1,500 sq.ft.67,500 - 75,000
2,000 sq.ft.90,000 - 100,000
2,500 sq.ft.112,500 - 125,000

Ideally, you should be within 10% of these figures for your home’s size and region when purchasing a furnace for the best efficiency. Do not go more than 20% over because this can cause your unit to work harder than necessary, increasing energy bills and lowering its lifespan.

High-Efficiency Propane Furnace Cost

Propane furnaces have a minimum efficiency rating of 80%, but most have higher ratings, with 80% to 89% considered standard efficiency. However, you can upgrade to one with 90% efficiency or above, with slightly above 98% being the best available. The price of high-efficiency furnaces is higher than standard efficiency, with the highest prices being given to the furnaces approaching 100% efficiency. Modulating and condensing units provide the best efficiency but cost the most.

If you upgrade from a lower-efficiency to a higher-efficiency unit, your installer may take additional steps to ensure it is installed properly. New high-efficiency units condensate water from the air as they heat, meaning they need a drain properly installed to avoid flooding. This takes additional time, increasing your installation costs.

Cost per Unit of a Propane Furnace by Efficiency

Cost per Unit of a Propane Furnace by Efficiency

EfficiencyAverage Cost per Unit (Materials Only)
80% - 89%$600 - $1,800
90% - 98%$800 - $3,600

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Propane Furnace Costs by Brand

One of the biggest factors driving the costs of your furnace is the brand. Many large companies make two, three, or more different brands of furnaces, which are often made using the same parts on the same assembly line. Some brands cost dramatically more than others. For the price, you get a better warranty and better-trained installers because they need to be certified to install certain brands.

In addition, many brands have varying prices for each unit, which ranges from low to high based on things like the housing quality and the unit's energy efficiency. More efficient units are usually more expensive than less efficient units. The following are the average price ranges for some of the more popular brands.

Cost per Unit of a Propane Furnace by Brand: Goodman, Coleman, Bryant, Rheem, Carrier, Trane, Lennox...

Cost per Unit of a Propane Furnace by Brand: Goodman, Coleman, Bryant, Rheem, Carrier, Trane, Lennox...

BrandAverage Costs per Unit (Materials Only)
Goodman$800 - $1,900
York$900 - $2,200
Coleman$900 - $2,400
Bryant$1,100 - $2,500
Rheem$1,200 - $3,000
Carrier$1,200 - $3,200
Trane$1,400 - $3,600
Lennox$1,500 - $4,100
American Standard$1,800 - $3,600

Goodman Propane Furnace Prices

The cost of a Goodman furnace is $800 to $1,900. Goodman is considered a good-quality budget brand for furnaces. They make primarily stage-one units, with a few stage-two and modulating lines. Builders frequently favor these because they provide good performance at a lower price. They are readily available at most big box stores, and many installers carry the line. They may not offer the same efficiency as more expensive brands but offer good and consistent performance.

York Propane Furnace Prices

The cost of a York propane furnace is between $900 and $2,200. York is another good-quality budget brand for furnaces. They also make several stage-one units and a smaller range of stage-two and modulating ones. York is owned by the same company that makes Coleman furnaces. They are also often a favorite choice among builders for their solid quality at a lower price. They have a range of efficiencies from basic to high efficiency.

Coleman Propane Furnace Prices

The cost of a Coleman propane furnace ranges from $900 to $2,400. Coleman units are made by the same company that produces York furnaces. Both share the same parts and bodies. Coleman is considered a slightly better line of furnace than York while still having the same durability and quality. They make a range of furnaces, including stage-one and stage-two units, with a few modulating. Coleman units are readily available at several places, including big box stores and installers.

Bryant Propane Furnace Prices

The price of a Bryant propane furnace averages $1,100 to $2,500. Bryant furnaces are made by the same company that produces Carrier. Both use the same parts and bodies. Bryant is considered a slightly more affordable option than Carrier while still providing a good-quality unit. Bryant makes a range of furnaces in several efficiencies up to 98%. They carry stage-one, stage-two, and modulating units in many types and sizes.

Rheem Propane Furnace Prices

The cost of Rheem propane furnaces is $1,200 to $3,000. Rheem makes a series of LP burning units. Most are single-stage, with a small number of two-stage and modulating. Rheem units have efficiency values of between 80% and 96% for some of their top lines. This is another preferred brand by builders. It is often considered a less expensive option to other similar quality units.

Carrier Propane Furnace Prices

The price of a Carrier propane furnace ranges from $1,200 to $3,200. Carrier units are built by the same company that builds Bryant furnaces. Both brands share parts and furnace bodies. Carrier is considered the more efficient version of Bryant furnaces, with ratings between 80% and 95% on most models. They also have more product lines, with the vast majority being one-stage. They have a single line of modulating units and a few two-stage lines. Like Bryant, Carrier is considered good quality and dependable.

Trane Propane Furnace Prices

The cost of a Trane propane furnace averages $1,400 to $3,600. Trane is made by the same company that produces American Standard furnaces. The two brands share many parts and casings. Trane is considered to be a very good high-end unit. They have a wide range of products at differing levels of efficiency. Some of their top units are slightly above 98% efficiency, reaching 98.7% under ideal circumstances.

Lennox Propane Furnace Prices

The price of a Lennox propane furnace ranges from $1,500 to $4,100. Lennox is considered a good-quality high-end furnace line. Some of their units can reach efficiencies of slightly above 98%. Even their stage-one furnaces reach efficiencies of roughly 94%. They have many choices for unit size, type, and efficiency. They are also considered one of the leaders in the field of furnace innovation.

American Standard Propane Furnace Prices

The price of American Standard propane furnaces is $1,800 to $3,600. American Standard is the company that also owns Trane. The two brands share many of the same parts and casings. Like Trane, American Standard units come in a range of types and sizes. This includes several stage-one furnaces and a handful of stage-two and modulating. They have many high-efficiency models of 98% and slightly above.

Labor Costs to Install a Propane Furnace

Your propane furnace is installed by an HVAC technician. Your installation cost varies depending on several things, including the location, whether your home is set up properly for the install or requires adding vents and drains for condensers, and the type of unit and brand. Some brands take longer and cost more to install than others.

HVAC professionals usually charge by the hour for installation. Depending on your area, this is between $50 and $150 an hour, with installation taking at least 4 hours and possibly up to 8. This gives you a labor price of $200 to $1,200, with $900 being about average.

Many factors impact the price of installing a unit. Furnaces of different sizes and brands have differing installation needs, with some brands requiring installers to take classes. Those brands may cost more to install because the installers are well-trained. Larger units without proper vents and units being moved to new locations have different prices impacting your final price.

Cost to Install a Propane Furnace and Ductwork

Your propane furnace needs ducts to function properly. The ducts carry the air from the unit to your home. If you do not already have ducts installed or the ducts are old and leaky, you need new ones installed with your furnace. The price of new ductwork is $1,900 to $6,000, while the average cost of a new one is $3,000 to $6,000. This makes the total cost of installing a new unit and ducts $4,900 to $12,000.

Cost to Replace a Propane Furnace

The price to replace a propane furnace is similar to that of installing a new one, but many variables change the price. For example, when upgrading to a newer, more efficient model, the install may take slightly longer than if you replace it with the same model you had previously. Likewise, if you switch to a different brand, your installation may vary somewhat as well. For the most part, replacement costs average around $3,000 to $6,000 for a 2,000 sq.ft. home, with labor costing between $200 and $1,200, depending on modifications.

You may need to replace yours if the heat exchanger breaks. If you notice cold air blows when you turn it on, it is generally a good idea to replace the old one rather than repair it. Similarly, if your unit is more than 10 - 15 years old, you may want to replace it with a more energy-efficient model to lower your monthly energy costs.

Cost of a New Propane Furnace Installed by Location

Propane furnaces can be used in various residential settings. Homes that store propane in tanks can use it for heat. This includes single-family homes, tiny homes, townhouses, cottages, and mobile homes. The following costs are based on the home’s average size with the system fully installed. Prices do not include the addition of propane tanks.

Cost to Install a Propane Furnace in a Tiny House, Apartment, Mobile Home, Condo, Townhouse, Cottage, or House

Cost to Install a Propane Furnace in a Tiny House, Apartment, Mobile Home, Condo, Townhouse, Cottage, or House

LocationAverage Costs (Installed)
Tiny House$1,000 - $2,500
Apartment$1,200 - $1,500
Mobile Home$1,200 - $1,500
Condo$1,500 - $1,700
Townhouse$1,700 - $2,500
Cottage$1,700 - $4,500
House$3,000 - $6,000

Tiny Home Propane Furnace Prices

The cost to install a propane furnace system in a tiny home is $1,000 to $2,500. Tiny homes typically range from 100 to 400 sq.ft., with some reaching 500 sq.ft. This system can be a good heating solution for those built on a foundation without access to natural gas. These units require you to have a tank on the premises. This can be a shared tank with a larger home if the tiny home is built in a backyard. Otherwise, a tiny home can install a small 40 or 50-gallon tank.

Apartment Propane Furnace Cost

The price of installing a propane furnace in an apartment averages $1,200 to $1,500. This assumes the unit is installed inside a single apartment and not a complex. Due to the need for a nearby propane tank, the most common installation is in a home that has been converted to apartments. Most units installed in apartments of this type are installed in a closet or shared basement. Total costs are impacted by the apartment size and how accessible the installation location is. Larger apartments and those with tight installation situations may cost more.

Mobile Home Propane Furnace Prices

The price of installing a propane furnace in a mobile home ranges from $1,200 to $1,500. They are common for mobile homes. It makes the most sense for homes in rural areas where natural gas is piped in. This is because propane tanks are usually smaller and easier to place near a mobile home than oil tanks. When installed in mobile homes, they are generally placed inside a utility closet. The total price depends on the mobile home size and accessibility.

Condo Propane Furnace Replacement Cost

The cost to replace a propane furnace in a condo is $1,500 to $1,700. This assumes the unit heats a single unit and not the entire building. Due to how propane tanks are installed, this heating system is most often used in condexes and other small building condominiums. Propane makes good alternative fuel for condos located in areas where natural gas is unavailable. The furnace is typically installed in a utility closet or shared basement, in some rare cases. Prices depend on the condo size and the accessibility of the installation area.

Townhouse Propane Furnace Prices

The cost of a propane furnace installation for a townhouse averages $1,700 to $2,500. They make a great option for many townhouses. They are commonly used for townhouses in areas without access to natural gas. Most townhouses are ideally set up for a propane tank to install outside. The unit itself may be in a basement or utility closet. The unit generally must be larger than those used for apartments and condos because townhouses are usually two stories and need more power to move the air.

Small Propane Furnace for a Cottage

The cost of a small propane furnace for a cottage is $1,700 to $4,500. While many people associate cottages with small homes, cottages come in many sizes. Some cottages are larger than the average single-family home. For that reason, the price of a unit ranges tremendously. Even assuming a smaller cottage than the average single-family home, this still encompasses a wide range of sizes. Other than size, cottages have the same considerations for furnace installation in a single-family home.

House Propane Furnace Cost

The average cost to install a propane furnace in a single-family home is $3,000 to $6,000. They are common in rural areas and spaces without access to natural gas. They operate similarly to gas units, with a small kit necessary to convert from burning one fuel to another. Propane furnaces are easy to install and commonly located in basements within a few feet of their tanks. The unit type and size impact your final costs.

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Cost to Convert to Propane Heat

Propane heat is a very common heating method for homes in rural areas and places where the cost of electricity or oil is high. Making the switch to propane can lower your energy bills each month. Most gas units can convert to propane furnaces, so you may also find that a gas-to-propane conversion is right for your next furnace, even if you have never used natural gas at your house. Below are the average prices for installing a new propane furnace when you have another type purchased or installed.

Cost to Convert a Natural Gas, Electric, or Oil Furnace to Propane

Cost to Convert a Natural Gas, Electric, or Oil Furnace to Propane

ConversionAverage Costs (Labor Included)
Natural Gas to Propane$75 - $250
Electric to Propane$4,500 - $9,750
Oil to Propane$6,500 - $12,750

Cost to Convert a Furnace From Natural Gas to Propane

The price to convert a natural gas furnace to propane is $75 to $250 for the conversion. These are the costs if you already own and have installed the furnace. If you purchase a new one, convert it from gas to propane, and install it, your total cost range is $3,075 to $6,250 for parts, labor, and installation. Any gas furnace is convertible to using propane. If you find a gas unit with features you want at a price in your budget, you can purchase a propane-converter kit from the manufacturer. Your HVAC technician can make the conversion for you when they install it.

Average Cost to Convert an Electric Furnace to Propane

The price to convert an electric furnace to a new propane one is $4,500 to $9,750. These prices include the installation of new propane tanks and the fuel line extending to the furnace. Costs include the new unit, installation, and modifications that may be required, including new vents or drains. Most electric units are smaller than average because they are not typically used in cold climates. When installing a smaller-than-average propane tank, your costs could be lower. The prices above are for the average-sized propane tank and furnace required for a 2,000 sq.ft. home.

Convert an Oil Furnace to Propane Cost

The cost to convert an oil furnace to propane averages $6,500 to $12,750. This includes removing the old oil tank and installing a new propane tank and fuel line. Prices also include furnace, installation, and required modifications. Conversion also usually requires regular cleaning of the area because oil produces a lot of soot. This includes cleaning vents or drains and cleaning the ducts. You may need additional modifications for drains because propane units are more efficient.

Cost of Adding Central Air to a Propane Furnace

If you already have a propane furnace in your home, you can use the same ductwork to run central air conditioning as well. This is a separate unit that installs on the exterior and interior of your home. Central air conditioning runs off of electricity, not propane, but it can use some of the existing equipment. The average price of adding central air to a home that has existing ducts in good condition is $3,750 to $9,800.

Residential Propane Tank Installation Cost

Some propane supply companies provide storage tanks as a courtesy while others rent them. This varies by region and the company you get your fuel from. Speak with them about which options are available. Generally, if you lease a tank or use a courtesy tank, you are tied to that company for your propane delivery.

If you want your own tank so that you can shop around for the best propane prices, you can have one installed. There are several different sizes and types of propane tanks. Some are installed beside your home, while others are installed underground. If you have been leasing tanks and want to install your own, consider whether you want the same type of system. Prices are dependent on the tank size and how far they are from your home. The cost to install a 500-gallon underground tank is around $1,500 to $3,750.

How Much Does It Cost to Run a Propane Furnace?

Like oil and natural gas, propane costs fluctuate over time. Propane is a byproduct of oil and gas, and therefore, the price is impacted by the cost of those two materials. However, it often takes time for changes in the cost of the other materials to trickle down to propane, so a reduction in heating oil costs does not automatically mean a drop in propane prices right away.

Propane heating costs vary tremendously, depending on the efficiency of your unit. High-efficiency furnaces use less propane to heat the same amount of space. National averages for the cost of propane per gallon over the winter of 2020 - 2021 was around $2.22/gallon. Propane is sold by the gallon, unlike natural gas, which is sold by MCF or a measurement of 1,000 cubic feet. The national average cost for natural gas last winter was $9.55 MCF. Converting propane to MCF, you would pay $24.86 MCF for the same amount, making gas significantly less expensive.

Oil prices were around $2.35 a gallon over the same period, so while propane is more expensive than gas, it is cheaper than oil. Electricity is priced in kilowatt-hours (kWs), with a national average of 0.128/kW. This translates to slightly lower costs for electricity over propane. National averages for the winter of 2020 - 2021 show that people paid the following for heating their homes. Keep in mind that oil and propane are not widely used. Over the previous year, fewer people used oil in general than other fuels, while the number of households using propane went up in equal measure. So while the overall costs of oil appear lower, this is due to the lower number of households using oil versus other fuels in the winter of 2020 - 2021.

Comparison of the Cost to Heat a House with a Gas, Electricity, Oil, or Propane Furnace

Comparison of the Cost to Heat a House with a Gas, Electricity, Oil, or Propane Furnace

FuelCost to Heat a Home

Keep in mind that these numbers vary by region, and the cost of each fluctuates constantly. They reflect the averages across all regions, based on the number of households using each fuel to heat their homes.

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Propane Furnace Maintenance

Your propane furnace lasts longest and works more efficiently with regular maintenance. Make sure you change your filter at least once every three months and have regular maintenance performed by a certified technician. The technician will check the blower and pilot light, ensure the heat exchanger is working properly, and that the unit is heating up at the correct rate. They also clean the furnace. Generally, this type of service is recommended at least once every two to three years and costs around $200 - $400.

Propane Gas Furnace Close Up

Pros and Cons of a Propane Furnace

Propane furnaces are used in many areas in the Northeast and Midwest where natural gas is not readily available. Like all fuels, it has positive and negative attributes to consider. Propane is more expensive than natural gas. It needs to be stored in tanks on your property, which has safety concerns and requires scheduling regular deliveries. If you run a generator off your propane tanks as well as a heating system, you may find yourself paying emergency fuel delivery charges in the event of a major storm.

Propane is less expensive per gallon of oil, however. It is also cleaner burning than oil, meaning lower maintenance and less of an impact on the environment. Propane can also heat homes in very cold climates, where electricity is unable to meet the same needs. They can also be extremely efficient, approaching 99% efficiency in some cases. So, you may be able to use less fuel overall than you would with oil.

Natural Gas vs Propane Furnace

Many furnaces today are designed to burn either natural gas or propane, depending on how they are set up. It may be sold as a natural gas unit, with the option of a conversion kit to allow it to burn propane. Or, you may find furnaces ready to burn propane, but which can be converted to burning gas if a gas line comes to your area.

If you purchase a natural gas furnace to burn propane, ensure that the conversion kit is available. This allows your installer to change the burner orifices to handle propane. In addition, a low-gas pressure switch will be installed, and the exhaust pipe will also handle intake, rather than requiring two separate pipes. Most of the time, a propane furnace is slightly higher in cost than a gas furnace because it is a gas unit that has been converted already and is ready for installation. If you purchase a gas furnace, your installation costs will be slightly higher for using it with propane. Purchasing a furnace designed for propane may have a slightly higher price tag, but the installation costs will be lower. In the end, this means the two usually equal out in cost when installing for propane usage. Installation for natural gas usage requires additional vents, which may raise the overall cost of the system.

Below are the average installation costs for both systems, without new ducts or significant modifications.

Comparison of the Cost to Install a Propane or Natural Gas Furnace

Comparison of the Cost to Install a Propane or Natural Gas Furnace

TypeAverage Costs (Installed)
Propane$3,000 - $6,000
Natural Gas$3,000 - $8,000

Propane vs Electric Furnace

Propane is usually used in areas where natural gas is not an option. An alternative is using an electric furnace. Understand that these are not the most efficient or cost-effective way to heat your home. They are recommended for warmer climates - zones 1 and 2, with part-time use in zone 3 - and not for colder climates. If you live in one of these zones, an electric furnace costs around $1,600 to $3,200 for a 68,000 BTU furnace fully installed. The same-size propane furnace costs around $800 to $1,200 for the furnace, plus around $200 to $1,200 for install, for a total of $1,000 to $2,400, while also being less expensive to heat the space. Propane is generally only available in the Northeast and parts of the Midwest, and in many of these areas, the climate is too cold for electricity to be used to heat a home using a furnace.

Comparison of the Cost to Install a Propane or Electric Furnace

Comparison of the Cost to Install a Propane or Electric Furnace

TypeAverage Costs (Installed)
Propane$1,000 - $2,400
Electric$1,600 - $3,200

Propane vs Oil Furnace

Oil furnaces are another option for heating your home when gas is not available. Like propane, oil is mostly available in the Northeast and in a few places in the Midwest. There may be areas where propane is available and oil is not and vice versa. Oil costs are higher than propane, so using oil means higher heating costs each winter. In addition, oil produces a lot of soot when burning, requiring regular cleaning of the vents, drains, furnace, and ducts. Propane burns much cleaner than oil, so your overall maintenance costs will be lower. Both materials require you to have a tank installed on your property for the storage of the heating fuel. They also require a delivery contract with the fuel supplier. The oil unit costs slightly more, with total costs of about $5,000 to $9,000 installed. For the same-size propane unit, prices are around $3,000 to $6,000.

Comparison of the Cost to Install a Propane or Oil Furnace

Comparison of the Cost to Install a Propane or Oil Furnace

TypeAverage Costs (Installed)
Propane$3,000 - $6,000
Oil$5,000 - $9,000

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Enhancement and Improvement Costs

Variable Speed Blower

One way to make your furnace more efficient and have it last longer is to install a unit with a variable-speed blower 2. This allows it to adjust the blower speed to the temperature, saving you money. Units with a variable-speed blower have starting costs of around $1,300 to $3,600.

Removal or Disposal of Old Furnace

Some HVAC technicians remove and dispose of your old one at no charge. Others charge a fee between $50 and $200, depending on the furnace age and how far it needs to be carried. Always check with your installer ahead of time to find out what their fees are and how the old furnace will be disposed of.

HEPA Air Filter for a Humidifier

You can have a HEPA air filter or house humidifier added to your HVAC system to improve your home’s air quality. These start at between $600 and $1,000 and may be higher, depending on the system size. Both additions have several options to choose from, impacting your total costs.

Add Insulation to Your Home

Adding insulation to your home dramatically reduces your heating costs, so you use less propane to warm your home. The cost to insulate an entire home is around $3,000 to $7,000. Costs vary depending on the insulation type, where you install it, and how much is required.

WiFi Compatibility

Many HVAC systems today have smart features including WiFi compatibility. The bonuses of a smart system include helping you with diagnostics, sending reminders for system maintenance, and allowing you to better control things like temperature and humidity. WiFi compatible and smart furnaces have starting costs of between $2,000 and $3,000 on average.

Additional Considerations and Costs

  • Permits. In many states, installing a new furnace or making changes to your HVAC system requires a permit and inspection. Check with your HVAC technician about what is needed in your area.
  • Tax credits. If you install a more efficient furnace, you may be eligible for a tax credit, depending on your home’s efficiency and age. These are dependent on the area, so check with your accountant or a technician for more information.
  • Propane availability. Before installing a propane furnace, check the availability of propane in your area. Propane is widely abundant in some areas with many suppliers, while other regions may not have the same access. Generally, propane is available strictly in the Northeast and Midwest, but not all cities or towns may have availability.
  • Eco-friendliness. Propane produces less carbon when burned than gas or oil, which makes it a more environmentally friendly option for those choosing propane over oil or electricity.
  • Area usage. Propane furnaces are a good choice for areas where natural gas or other materials are unavailable. They are also used frequently in rural areas where power interruptions are common because while the blower requires electricity to work, the burner does not, making startup easier after an outage.
  • Space and size. Some propane furnaces are compact and can be placed in tiny homes, tight locations, such as crawl spaces or closets, and other areas where space may be a premium.


  • How much does it cost to put in a propane furnace?

The average cost to install a propane furnace is around $3,000 to $6,000. These costs are for the average 2,000 sq.ft. home. Larger or smaller homes may have different costs.

  • Are propane furnaces efficient?

Yes, it is possible to find furnaces with up to 98% efficiency. Propane is also less expensive and cleaner burning than oil, helping you save even more.

  • Is it cheaper to heat with propane or electric?

Propane is slightly less expensive to heat with than electricity. However, propane is generally used in cold climates, while electricity is only used in furnaces in moderate climates. Electric furnaces do not come in the same sizes as propane furnaces made for entire houses in cold climates.

  • How much does it cost to convert a furnace from propane to natural gas?

If you have a gas line, the furnace conversion only costs $75 to $250 on average. However, if you need a gas line installed, this has an additional cost of $500 to $2,000.

  • Are propane furnaces safe?

Yes, they must go through all the same regulations as other furnaces. Every unit has a switch that will immediately turn it off in the event of an emergency.

Remodeling Terms Cheat Sheet

Definitions in laymen's terms, cost considerations, pictures and things you need to know.
See full cheat sheet.
glossary term picture Propane 1 Propane: A hydrocarbon gas used as a common fuel source
glossary term picture Blower 2 Blower: An accessory that makes a fireplace more efficient by circulating the warm air in the fireplace to other areas of the home

Cost to install a propane furnace varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

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Close Up of a Propane Home Furnace
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The information provided by our cost guides comes from a great variety of sources, including specialized publications and websites, cost studies, U.S. associations, reports from the U.S. government, contractors and subcontractors, material suppliers, material price services, and other vendor websites. For more information, read our Methodology and sources