How Much Does It Cost to Install a Propane Furnace?

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). Propane furnaces 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 high-efficiency furnace for a 2,000 sq.ft. home.

Propane Furnace Prices

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 cost, 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 costs for each furnace, which ranges from low to high based on things like the housing quality and the furnace’s energy efficiency. More efficient furnaces are usually more expensive than less efficient furnaces.

The following are the average cost ranges for some of the more popular furnace brands:

Propane Furnace Sizes

The furnace 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 your furnace is correctly sized to your property to get the most out of your system.

Your installer calculates the best furnace 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.

Once you determine your zone and square footage, multiply your square footage by one of the two numbers in your zone. For a well-insulated, 2,000 sq.ft. home in Zone 4, this gives you 90,000 BTUs for a well-insulated home. Do your best to get within 10% of this number, but do not go beyond 20% of it. Rounding up slightly is better than rounding down.

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 furnace 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 cost of $200 to $1,200, with $900 being about average.

Factors Affecting the Cost of Installing a Propane Furnace

Many factors impact the cost of installing a propane furnace. Furnaces of different sizes and brands have differing installation needs, with some brands requiring their installers to take extra classes. Those brands may cost more to install because the installers are well-trained.

If you upgrade from a lower efficiency to a higher efficiency furnace, your installer may need to take additional steps to make sure it is put in properly. New high-efficiency furnaces condensate water from the air as they heat, which means that they need a drain properly installed to avoid a flood later. This takes additional time, which increases your installation costs.

Larger furnaces that do not already have proper vents installed and furnaces being moved to new locations all have different costs that impact your final installation cost.

Residential Propane Tank Installation Cost

Some propane supply companies provide storage tanks as a courtesy while others rent them. If you want your own tank so that you can shop around for the best propane prices, you can have one installed. The cost to install a 500-gallon underground tank is around $3,000 fully installed.

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 furnace. 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 2019 - 2020 was around $2.12/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 $9.61 MCF. Converting propane to MCF, you would pay $23.74 MCF for the same amount, making gas significantly less expensive.

Oil prices were around $2.92 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 higher costs for electricity over propane. National averages for the winter of 2019 - 2020 show that people paid the following for heating their homes:

Keep in mind that these numbers vary by region, and the cost of each fluctuates constantly.

Cost to Replace a Propane Furnace

The cost 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 $4,000 for a 2,000 sq.ft. home.

You may need to replace your furnace 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 furnace rather than repair it. Similarly, if your furnace 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.

High-efficiency Propane Furnace Cost

Propane furnaces have a minimum efficiency rating of 80%, and most have higher ratings than that. However, it is possible to upgrade to a furnace that has 94% efficiency or above, with 98% being the best available. The cost of these furnaces usually starts at around $2,000 to $3,000, depending on the size and brand. While it is possible to find an average-efficiency furnace for under $1,000, expect to have higher upfront costs for high-efficiency ones.

Cost to Convert a Gas Furnace to Propane

Any gas furnace is convertible to using propane. If you find a gas furnace with features you want at a price in your budget, purchase a kit to convert it to propane for around $25 to $100. This adds another $50 to $150 to your install as well.

Cost to Convert a Propane Furnace to Natural Gas

Propane is usually the best option if you do not have a natural gas line in your area. However, once a gas line becomes available, you may want to make the switch for the significant savings on your heating bill each year. Natural gas costs less than half of what propane does each year.

Most furnaces are easily converted, with conversion kits costing $25 to $100, and they take only about an hour of work at $50 - $150. This makes the furnace conversion cost $75 to $250, assuming your current furnace is adequate for your needs. If not, you will need to install a new furnace, at a cost of roughly $4,000 installed.

The other costs come in running the gas line. Just because gas runs to your street, it does not mean it will connect to your home automatically. You need to run a new line, and this is the biggest upfront cost, costing up to $1,200 depending on how far the line needs to run.

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 electric furnaces 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 $2,400 for a 68,000 BTU furnace. The same-size propane furnace costs around $800 - $1,200 for the furnace, plus around $900 for install, for a total of $1,700 to $2,100, while also being less expensive to heat the space.

Propane vs Oil Furnace

Oil furnaces are another option for heating your home when gas is not available. Oil costs are higher than propane, so using oil means higher heating costs each winter. The oil furnace unit costs slightly more, with total costs of about $4,800 installed. For the same-size propane furnace, prices are around $4,000.

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 furnace 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.

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. This allows it to adjust the blower speed to the temperature, saving you money. Furnaces with a variable-speed blower have starting costs of around $2,000.

Removal or Disposal of Old Furnace

Some HVAC technicians remove and dispose of your old furnace at no charge. Others charge a fee between $50 and $200, depending on the furnace age and how far it needs to be carried.

Hepa Air Filter for 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.

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 $3,500 to $4,500.

Additional Considerations

• 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.
• If you install a more efficient furnace, you may be eligible for a tax credit, depending on your home’s efficiency and age.
• 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.
• 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.
• 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 the burner does not require electricity.
• 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.