How Much Does a New Furnace Cost in Indianapolis?

As HVAC contractors in Indianapolis, we frequently field questions from homeowners who want to know, how much does a new furnace cost? It’s not a simple question to answer because there are several factors involved.

In this blog, we review the considerations for a new furnace cost as well as the cost of not investing in one. Before replacing your furnace, always check to see if a furnace repair is possible.

New Furnace Cost Factor #1 – Fuel Source

Unless you’re doing research into a new furnace cost for new construction, the fuel source is predetermined for you. Most people prefer a gas furnace because natural gas is generally less expensive for a typical household in central Indiana and many times produces a warmer air from the vents. There is a wide range, but a gas-powered new furnace cost varies between $2,500 and $7,000, depending on size and efficiency.

If your home is all electric, it’s possible your builder installed a heat pump and air handler. This scenario uses the heat pump to heat and cool your home. It’s generally one piece of equipment which operates all year.

In houses with a furnace, the furnace gets a seasonal break because the air conditioner takes over for cooling.

In more northern climates like Indianapolis, heat pumps may need to lean on a backup heat source, known as “heat strips.” This is a backup heat source when the outdoor air gets too cold for the heat pump to transfer heat.

These are considered more for “emergency” use when the heat pump can’t keep up with extra cold temperatures for an extended period. Heat strips pull more amps of electricity and are generally expensive to use.

A heat pump, which, remember, both heats and cools your house, can range from $6,000 to $15,000. Again, the figure depends on size and efficiency.

Cost Factor #2 – Size

Another variable in the new furnace cost is the size or heat output. Gas furnaces are assigned a rating based on output in British Thermal Units, or BTUs.

Do not confuse a higher rating, or greater output, with a better furnace. It’s more about the correct size for your home. We’ve found homes around and greater than 5,000 square feet benefit from two systems compared to one giant system.

Cost Factor #3 – Efficiency

Most of the time if you plan to stay in your home, a furnace with the highest efficiency you can afford is your best bet. The initial new furnace cost may be a little higher, but the more efficient, the less your furnace costs to operate. As a homeowner, you see lower gas utility bills.

Efficiency is measured by what’s called an AFUE rating. AFUE stands for Annual Fuel Unit Efficiency and means how well the furnace converts fuel to energy or heat. The minimum for new furnaces is currently 80 percent. New gas furnaces can achieve up to around 98 percent.

If you purchased a house with an older furnace, it’s possible it’s less than 80. In these cases, a high-efficiency furnace makes a big difference to your utility costs.

We offer finance options for homeowners who want to upgrade to a more efficient system. An exception to the AFUE factor is speeds.

In some cases, homeowners prefer an 80 percent multi-speed furnace over a 92 AFUE single-speed unit. That can sound like a different language, which is why we always suggest setting up a free talk with our team at HomeSense to weigh your options.

New Furnace Cost Factor #4 – Installation

Installation costs vary based on a few factors, such as:

• Furnace brand – which can fluctuate pricing up to 10-15 percent
• Location of installation in home
• Necessity of additional ductwork or ductwork repair/replacement

Installation is typically a two-person job that takes about a working day. Labor makes up a significant portion of the cost because it requires trained HVAC technicians and careful work.

Ready to Talk About Your Heating System?

If your heating system is struggling, is older than 10 years or inefficient, we can help you figure out what makes sense. We’ll look at your system, do the calculations, and talk through your options—sometimes repair makes more sense, sometimes replacement does.

Regardless of the age of your HVAC system, regular maintenance through our heating and air service agreement can help keep things running well.

Call HomeSense at 317-203-8149 or submit an appointment request form today.

Posted in: Heating, HVAC Indianapolis

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