Introduction
There are five types of furnaces defined by their fuel sources: electric, natural gas, oil, propane, and geothermal furnaces. Electric and natural gas furnaces are the most common, however, that doesn’t necessarily make them the best.
In this blog post, we will cover the five different types of furnaces and what they do, what makes them different, and their costs. We will also be discussing which furnace type might be the best for you and your heating system needs.
Electric Furnaces
As the name suggests, electric furnaces are powered using electricity. They tend to be cheaper and safer than the other types of furnaces, which are some of the big reasons why they are so popular.
Electric furnaces, like natural gas ones, are available nearly everywhere. Although they may be cheaper to install than natural gas furnaces, electric furnaces cost more in the long run. As stated by Modernize Home Services, it costs 63% more to heat a home using an electric furnace than a natural gas furnace. Nevertheless, electric furnaces have one huge pro: they have long lifespans. They can last up to thirty years, while other types of furnaces usually last fifteen to twenty years. They also do not require a venting system for fuel, unlike other furnaces such as natural gas, oil, and propane ones.
How Much Do Electric Furnaces Cost?
According to Home Advisor, the average new electric furnace installation costs $5,002 as of March 2025. The new furnace itself costs between $800 to 4,500, but the additional costs for installation come from labor, drywall repair, permits, and more.
Electric furnace installations usually cost less to install than other furnaces. Although, they end up costing more in the long run, as mentioned above. Electric furnaces have a cheaper installation, but how much it costs to run them quickly overrides it.
Natural Gas Furnaces
Natural gas furnaces are the most popular furnaces. They work by burning natural gas to generate heat. Natural gas furnace types are separated by their fan speeds and efficiency. There are single-stage furnaces, two-stage furnaces, variable speed furnaces, and modulating furnaces.
Gas furnaces require a venting system to transfer fuel, leading to an additional cost when installing them. They are, however, more affordable to run than electric furnaces. As mentioned in the “Electric Furnace” section, running a gas furnace costs significantly less than running an electric furnace. Gas furnaces do cost more to install than electric ones.
How Much Do Natural Gas Furnaces Cost?
According to Carrier, the average cost of natural gas furnaces after installation is between $3,800 to $12,000. The prices for them vary drastically based on several factors: efficiency rating, brand, size, complexity of installation, additional features, and more.
Gas furnaces end up being cheaper than electric furnaces because they cost less to run. Gas is cheaper than electricity so you will find your energy costs will be less overtime than if you decided to go with an electric furnace.
Your maintenance costs will be more with a gas furnace than an electric furnace. Gas furnaces require more maintenance than electric furnaces because they burn fuel and produce carbon monoxide as a byproduct. Carbon monoxide is deadly in large doses and must be monitored carefully.
When shopping for a natural gas furnace, it’s important to take into account the many factors that influence its price. Ask the HVAC company you choose a breakdown of costs to ensure that you are getting the best value for your money. If an HVAC company refuses to provide this information, seek out a different HVAC company to install your natural gas furnace.
You can read more about natural gas furnaces here in this blog post.
Oil Furnaces
Due to the regional availability of oil, oil furnaces are not accessible to all customers. Oil has to be stored in a tank and refilled regularly. The tank has to be checked frequently. Depending on the size of the oil tank will depend on how often it will have to be refilled. Expect to refill an oil tank at least twice during the winter.
A major reason why customers choose not to go with oil furnaces is because they are less efficient than natural gas and electric furnaces. Not only are they less efficient, but the oil in them can give off a distinct smell. The oil can also be dangerous because it is highly flammable. Oil prices are subject to supply and demand which can make calculating the cost of using oil furnaces long term difficult.
How Much Do Oil Furnaces Cost?
Like natural gas furnaces, the price of oil furnaces varies significantly. Modernize has calculated that the average oil furnace costs between $2,905 – $7,450. This cost includes the installation, the HVAC unit, and the energy efficiency rating of the unit.
One of the biggest reasons why the price of oil furnaces varies is because of different brands. Some brands offer longer warranties, higher energy efficiency ratings, and lower costs associated with installation. Depending on your HVAC needs, these factors may or may not be worth the cost.
Propane Furnaces
Propane furnaces are only available to customers in certain regions, like oil furnaces. Most propane furnaces are used in rural areas. They are similar to natural gas furnaces, but they have a different opening and a different spring. Propane furnaces have smaller openings. Their springs have a different spring tension than the ones in natural gas furnaces as well.
Like natural gas furnaces, propane furnaces require a venting system, so they can transfer the fuel from the tank to the furnace itself. Propane furnaces, also like oil ones, require a tank. Depending on if you own the propane tank or not depends on how often you will have to refill it. If you don’t own it, then the company that does should refill it with liquid propane a couple of times a year. If you own it then you should take into account the size of it and check it frequently.
How Much Do Propane Furnaces Cost?
Propane furnaces’ price and installation vary because of their demand. Home Advisor estimates that the average cost to install a propane furnace in 2025 is $4,000, with $3,000 – $6,000 being the typical range.
Just like in the “Oil Furnace” section, the prices of units aren’t set in stone due to several factors. These factors are the same as oil furnaces in that energy efficiency ratings, longer warranties, and costs play a role in why the prices vary. The price of the propane tank is a factor as well. Whether you are buying or renting your propane tank can influence how much you have to pay for fuel.
Propane furnaces may be right for you if they are available in your area, but they have several downsides.
Geothermal Furnaces
Geothermal furnaces heat homes by bringing heat up from the ground and transferring it. Unlike other furnaces, they don’t work through combustion as they take the heat already available from the ground. Geothermal furnaces work through a series of hoops that can be different shapes and sizes. The hoops are usually vertical, horizontal, or open. The hoops are buried underground or under a water source.
Geothermal furnaces help homeowners to save money as they do not require fuel. As mentioned before, they take what is already available to them. They are available everywhere, as they can work in any climate.
Geothermal furnaces have the longest lifespan out of any furnaces currently on the market. A geothermal furnace can last more than fifty years with regular maintenance, however, certain parts of the unit will have to be replaced during that time.
How Much Do Geothermal Furnaces Cost?
Most geothermal furnaces aren’t like traditional furnaces; they are usually only one small part of a geothermal HVAC system. A geothermal system is capable of heating and cooling a home. It’s important to take that into account when looking at the price. EarthRiverGeothermal estimates that the cost of a geothermal system and the installation of it is $12,000 – $30,000. The factors that influence the cost of geothermal systems are the efficiency of the units, the type of loops used, and the brand of the units.
Geothermal systems cost more than other systems due to their longevity and fuel efficiency.
Which Furnace Type is Best?
There is no best type of furnace for everyone. The right furnace depends on your price range, your needs, and what is available to you. For example, oil and propane furnaces would likely be more popular if they were available everywhere. Natural gas, oil, and propane furnaces both cost less to run than electric furnaces. Electric furnaces are the cheapest to install, but quickly surpass their low cost because of how much it costs to run them. In the end, each type of furnace has its pros and cons.
Conclusion
The five types of furnaces may differ, but all share the same purpose in heating a home or building. While electric and gas furnaces are the most common they aren’t the only options.
In this blog post, we talked about the five different types of furnaces and what they did, what made them unique, and what factors play into how much they cost.
Do you live in Jefferson County or the surrounding areas and need to install a furnace or service your current one? We can help! Our phone number is 636-475-9384. We offer free estimates and same-day service when viable.