How much does it cost to install a propane furnace?

Reviewed by Adam Graham remodeling expert. Written by Fixr.com.

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, qualities, and efficiencies, creating a range of prices. The average range for propane furnace installation is between $5,000 and $8,000, with most homeowners paying $6,000 for a replacement high-efficiency unit for a 2,000 sq.ft. home installed with a new drain and vent. This project’s low cost is $1,800 for a basic standard-efficiency furnace with no modifications in an 800 sq.ft. home. The high cost is $14,000 to replace a high-efficiency furnace with a new drain, vent, and ducts in a 2,000 sq.ft. home.

Propane Furnace Prices

What Is a Propane Furnace?

Propane furnaces are a heating system that uses propane. It burns fuel to heat air. This air is forced through ducts and exits into each room. This is called a forced 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. Many natural gas furnaces also burn LP, with some specifically designated as propane/natural gas furnaces. They must often be set up to burn one or the other fuel. Others may be specifically sold to burn LP from the start. These can also be converted to burn natural gas later with a conversion kit.

Propane Furnace Cost By Type

Like natural gas furnaces, propane units come in three basic types - single-stage, two-stage, and modulating. These furnaces cost $800 to $8,000 per unit. The type refers to how the furnace turns on and off and at what level it operates. Single-stage units operate continuously, while two-stage units have two levels. Modulating units may operate on multiple levels. Switching between levels can make yours more efficient. This means that while single-stage furnaces cost the least to purchase, they cost the most to operate. Below are the uninstalled costs for each type.

Single-Stage Propane Furnace

The price of a single-stage propane furnace averages $800 to $2,000. 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. Your home may feel colder at times 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

The price of a two-stage propane furnace ranges from $1,200 to $4,800. Two-stage units have high and low settings. When bringing the temperature up, it uses a high setting. It 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 low temperature.

Modulating Propane Furnace

The price of a modulating propane furnace is $2,000 to $8,000. A modulating unit is also called a continuous furnace. Once on, it stays on, providing continuous heat. However, it can switch between higher and lower settings, meaning your home stays warm with no temperature drops. While the unit runs continuously, it does so at much lower levels, so your fuel bills are lower.

New Propane Furnace Cost by House Size

While your furnace size is determined by several factors, home size is a big contributor. Furnaces of different sizes cost from $800 to $8,000. It is important to ensure your furnace is correctly sized for your home. If it is too small, it will work too hard, costing more money while your home stays cold. If it is too large, it will cost you more to run each month than it should and may wear faster than a properly sized furnace.

In addition to your home size, your furnace size is dictated by your climate and insulation. However, you can get a basic understanding of costs based solely on the square footage being heated. The following costs are for homes of varying sizes and assume a home in climate zone 4.

High-Efficiency Propane Furnace Cost

High-efficiency propane furnaces range from $800 to $8,000 for the materials. 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 for the furnaces approaching 100% efficiency. Modulating and condensing units provide the best efficiency but cost the most.

If you upgrade 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 to avoid flooding. This takes additional time, increasing your installation costs.

Propane Furnace Prices by Brand

One of the biggest factors driving the costs of your furnace is the brand, ranging from $1,000 for more basic models to $8,500 for high-end furnaces. 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, ranging from low to high, based on 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.

Coleman Propane Furnace

The cost of a Coleman propane furnace ranges from $1,000 to $2,400. Coleman units are made by the same company that produces York furnaces. Both share the same parts, bodies, and appearances, but they may have different qualities. 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.

Goodman Propane Furnace

The cost of a Goodman furnace is $1,100 to $2,200. Goodman is considered a good-quality budget brand for furnaces. They primarily make one-stage units, with a few two-stage 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 consistent performance.

Bryant Propane Furnace

The price of a Bryant propane furnace averages $1,100 to $4,500. 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.

York Propane Furnace

The cost of a York propane furnace is between $1,200 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.

Rheem Propane Furnace

Rheem propane furnaces cost $1,500 to $4,500. 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 less expensive than other similar units.

American Standard Propane Furnace

The price of American Standard propane furnaces is $1,600 to $6,000. American Standard also owns Trane. The two brands share many parts and casings. Like Trane, American Standard units come in many types and sizes, including several one-stage furnaces and a handful of two-stage and modulating. They have many high-efficiency models of 98% and slightly above.

Lennox Propane Furnace

Lennox propane furnaces cost $1,800 to $5,100. Lennox is considered a high-end furnace line. Some of their units reach efficiencies of slightly above 98%. Even their stage-one furnaces reach efficiencies of roughly 94%. They have many choices for the unit size, type, and efficiency. They are also considered one of the leaders in furnace innovation.

Carrier Propane Furnace

Carrier propane furnaces range from $2,000 to $7,000. 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 of between 80% and 95% on most models. They also have more product lines, with most being one-stage. They have a single line of modulating units and a few two-stage lines. Like Bryant, Carrier is considered dependable and a high-quality unit.

Trane Propane Furnace

The cost of a Trane propane furnace averages $2,000 to $8,500. Trane is made by the same company that produces American Standard furnaces. The two brands share many parts and casings, but Trane is usually considered more luxurious. Trane is considered a good high-end unit with a range of products at differing efficiency levels. Some of their top units are slightly above 98% efficiency, reaching 98.7% under ideal circumstances.

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 installation or requires adding vents and drains for condensers, and the unit type 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 $75 and $200 an hour per person, with many installations needing at least two workers. The typical labor cost per project is $1,000 to $3,000, with the average cost at $2,000.

Many factors impact the price of installing a unit. Furnaces of different sizes and brands have different 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 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. New ductwork costs $1,900 to $6,000, while the average cost of a new propane furnace installed is $5,000 to $8,000. This makes the total cost of installing a new unit and ducts $6,900 to $14,000. Replacing existing ducts is generally less expensive than adding new ducts. This is because to add ducts to an existing home, you may need to run them through closets, under stairs, and other areas not designed to hold them, increasing labor.

Cost to Replace a Propane Furnace

The price to replace a propane furnace is similar to installing a new one, but many variables change the price. For example, when upgrading to a newer, more-efficient model, the installation may take longer than if you replace it with the same model you had. If you switch to a different brand, your installation may vary somewhat. Replacement costs typically average $5,000 to $8,000 for a 2,000 sq.ft. home. While replacement can be easier than a new installation, several variables can increase the cost, making the two projects similar. You need to remove the old furnace, costing $50 to $200. Newer furnaces frequently need drains installed or vents, which older furnaces did not require. Adding them can increase the project costs, making the cost similar to a new installation.

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

Propane Furnace Installation Cost by Location

Propane furnaces can be used in various residential settings, ranging from $1,500 to $8,000. Homes that store propane in tanks can use it for heat. This includes single-family homes, tiny homes, townhouses, cottages, and mobile homes. Each setting has a range of costs based on the unit size, accessibility, and how and where the propane is stored. For most townhouses, mobile homes, and cottages, the installation can be similar to a house. The only difference is the unit size. So, mobile home propane furnace prices typically reflect that of a small home, with some potentially higher costs for the small space that the furnace is installed in, raising labor costs.

Costs for condos and apartments vary depending on whether you are installing a furnace for one or several units. For apartments, you can have a lower per-unit cost if you install several at once. For duplexes and condexes, costs can be similar to a small home, but you may have other costs for larger units, depending on where in the unit or on the property the furnace and propane tanks are installed. A furnace needs ducts to work, so the costs increase if you need to add new ducts. The one exception may be for tiny homes. Because they are so small, you may not need a way to distribute the heat from the furnace. 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 Convert to Propane Heat

Propane heat is a 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. Below are the average prices for installing a new propane furnace when you have another type purchased or installed.

Convert a Furnace From Natural Gas to Propane

Converting a natural gas furnace to propane costs $75 to $250. 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 $4,075 to $8,250 for parts, labor, and installation. Any gas furnace is convertible to 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 convert it 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 $5,500 to $11,750. These prices include the installation of new propane tanks, the fuel line extending to the furnace, and the new unit, installation, and modifications, including new vents or drains. Most electric units are smaller than average because they are not typically used in cold climates. Your costs could be lower when installing a smaller-than-average propane tank. 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

The cost to convert an oil furnace to propane averages $7,500 to $13,750. This includes removing the old oil tank and installing a new propane tank and fuel line. Prices also include the furnace, installation, and required modifications. Conversions usually require regular cleaning, including cleaning vents or drains and the ducts, because oil produces soot. 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. This is a separate unit that installs on your home’s exterior and interior. Central air conditioning runs off electricity, not propane, but it can use existing equipment. The average price of adding central air to a home with ducts in good condition is $5,000 to $12,000. Your propane furnace may need to be modified for the central air conditioner to use the same blower and ducts. Most air conditioners have part of the system installed outdoors, while the rest is bundled with your furnace, which can mean modifying the area for the best fit.

Residential Propane Tank Installation Cost

You need to store propane on your property to run your heating system. This is done in large storage tanks that are installed beside your home or buried underground nearby. Some propane supply companies provide storage tanks as a courtesy, while others rent them. This varies by region and your fuel company. 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 install one. There are several propane tank sizes and types. 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 system. Prices depend on the tank size and distance from your home. The cost to install a 500-gallon underground tank is $1,500 to $3,750. In most cases, the company installing the tanks runs a line to your home from the tanks during installation. From there, your furnace installer can finish the connection.

How Much Does It Cost to Run a Propane Furnace?

Like oil and natural gas, propane costs fluctuate. Propane is a byproduct of oil and gas, and the price is impacted by the cost of those. 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.

Propane heating costs vary tremendously, depending on your unit’s efficiency. High-efficiency furnaces use less propane to heat the same space. National averages for the cost of propane per gallon over the winter of 2021 to 2022 were around $3.30 per gallon. The average 100,000 BTU furnace uses 1.09 gallons of propane an hour. Assuming you run the furnace for 8 hours a day, this costs about $28.80 a day, making the propane furnace cost per month around $864. Your furnace may use more or less propane, and you may use it for more or fewer hours per day, impacting your final cost.

What Size Propane Furnace Do I Need?

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

Your installer will calculate the best size for your home based on your needs, but making a few simple calculations yourself narrows it down. 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 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. Use the U.S. Energy Information Administration’s climate map 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. Below are the average BTUs that you will likely need based on your square footage.

Maintenance Cost

Your propane furnace lasts the longest and works more efficiently with regular maintenance. Change your filter at least once every three months and have regular maintenance performed by a certified technician. The technician checks the blower and pilot light, ensures the heat exchanger is working properly, and tests to see if the unit heats at the correct rate. They also clean the furnace. This service is generally recommended once every two to three years and costs $200 to $400. Because most propane furnaces do not require service every year, most companies do not offer maintenance contracts unless you pair your furnace with another appliance like central air or a generator.

Pros and Cons

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. Propane is more expensive than natural gas. It must be stored in tanks on your property, which has safety concerns and requires regular deliveries. If you run a generator off your propane tanks and a heating system, you may find yourself paying emergency fuel delivery charges in a major storm.

Propane is less expensive per gallon of oil, however. It is also cleaner than oil, meaning lower maintenance and less of an environmental impact. Propane can also heat homes in very cold climates, where electricity cannot meet the same needs. They can also be extremely efficient, approaching 99% efficiency. So, you may be able to use less fuel than with oil.

Natural Gas vs Propane Furnace Cost

Many furnaces today burn 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, 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. A low-gas pressure switch is installed, and the exhaust pipe handles intake rather than requiring two separate pipes. Most of the time, a propane furnace is slightly more expensive than a gas furnace because it is a gas unit that has been converted and is ready for installation. If you purchase a gas furnace, your installation costs are slightly higher for using it with propane. Purchasing a furnace designed for propane may have a slightly higher price tag, but the installation costs are lower. 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 system’s cost. Natural gas units are slightly cheaper, costing $4,000 to $8,000 installed. Propane furnaces of the same size cost $5,000 to $8,000 installed. Below are the average installation costs for both systems without new ducts or significant modifications.

Electric Furnace vs Propane Furnace Cost

Propane is usually used in areas where natural gas is not an option. An alternative is using an electric furnace. Electric furnaces range between $3,400 to $5,000 compared to the $5,000 to $8,000 for propane units. Understand that these are not the most efficient or cost-effective ways to heat your home. In most cases, if you are using electricity to heat your home, you likely live in a warmer climate and only need occasional heat. Electric furnaces are not large enough to meet the needs of a home in a cold climate because they are too costly to run at that size. For that reason, most electric furnaces are only used in areas that do not use propane. Propane furnaces are typically used in very cold climates with access to natural gas. Therefore, electric furnaces are less expensive but smaller and more costly to run. Below are the average costs of both furnaces at their most common sizes.

Propane vs Oil Furnace Cost

Oil furnaces are another option for heating your home when gas is unavailable. Like propane, oil is mostly available in the Northeast and 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. In addition, oil produces soot when burning, requiring regular cleaning of the vents, drains, furnace, and ducts. Propane burns much cleaner than oil, so your overall maintenance costs are lower. Both materials require a tank installed on your property to store fuel. They also require a delivery contract with the fuel supplier. The oil unit costs slightly more, ranging from $7,000 to $10,000 installed. For the same-size propane unit, prices are $5,000 to $8,000.

Enhancement and Improvement Costs

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 $400 and $1,200 and may be higher, depending on the system size. Both additions have several options, impacting your total costs.

Insulation

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 $3,000 and $5,000.

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.
• Inspections. If you are unsure if your current furnace needs to be replaced, you can schedule an inspection. This costs $100 to $600. Installing a new furnace requires an inspection from your state in most areas.
• 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 depend 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.