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How Much Does an Electric Furnace Cost?

About All-Electric Furnaces

As the name suggests, an all-electric furnace runs solely on electricity, rather than fossil fuels such as oil or natural gas. The furnace draws in cold air, which is heated by the electric components. The furnace blower then distributes that hot air through the home’s ductwork.

All-electric furnaces are technically very energy efficient because there’s almost no heat loss; however, due to the high cost of electricity compared to fossil fuels, they’re much more expensive to operate. Electric furnaces are used in rare cases when natural gas is not available, oil is not feasible and where it does not get very cold.

Electric furnaces are more practical (read: affordable) when they’re part of a heat pump system. If electricity is the only choice in your area, a heat pump is preferable to an all-electric furnace.

About Heat Pumps

Heat pumps operate as both heating and cooling systems, replacing the need for a separate furnace and central air conditioning system. They do have an electric furnace component, but the electricity does a small percentage of the work.

Essentially, heat pumps use a small amount of energy to move heat from one location to another. To cool the home, they take heat from the inside and pump it outdoors. In heating mode, they pull heat out of the air, water or ground and move it indoors. However, heat pumps are not practical in very cold climates because they do not provide enough heat.

Cost of an Electric Furnace

All-electric furnaces are very inexpensive upfront, but again, the long-term heating costs are very high, negating the initial savings. The smallest electric furnaces start at about $500, but most fall in the range of $1,000 to $1,500.

The average heat pump costs $6,000 to $7,000, but your monthly energy bills will be about 50 percent less. Geothermal heat pumps start at about $10,000, but they are eco-friendly and even more efficient.

Electric Furnace Pros

We’ve discussed all of the drawbacks, but there are some benefits to an all-electric furnace. They are safer than gas- or oil-fired furnaces because they do not use combustible fuels. There’s no pilot light to deal with, and they operate quietly. Also, electric furnaces are less likely to break because they have fewer parts.

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