Cost of a New Furnace and Central Air Installation

The cost of a new furnace and central air installation varies widely based on equipment, labor, home size, and efficiency. This guide provides detailed cost ranges, factors that drive prices, financing and rebate options, and tips to choose the right contractor for a U.S. home. Accurate budgeting and comparison of quotes help homeowners avoid surprises.

Component	Typical U.S. Cost Range	Notes
Furnace (Gas, Mid-Efficiency)	$2,500 – $5,500	Includes basic installation for standard homes
Furnace (High-Efficiency Gas)	$4,000 – $8,500	AFUE 95%+ units cost more but save energy
Central Air Conditioner (SEER 14-16)	$3,000 – $6,000	Split system; excludes furnace or air handler
Heat Pump (Air Source)	$4,000 – $10,000	Can replace furnace and AC in mild climates
Full Furnace + Central Air Installation	$7,000 – $18,000	Depends on equipment, ductwork, and labor

How Costs Are Calculated

Installation costs for a new furnace and central air are a combination of equipment price, labor, materials, permit fees, and any necessary home modifications. Ductwork repair or replacement, electrical upgrades, gas line work, and disposal of old equipment increase total cost. Regional labor rates and supply chain conditions also influence final prices.

Average National Cost Ranges

Typical combined replacement of a furnace and central air ranges between $7,000 and $18,000 for most single-family homes in the U.S. Lower-end projects use standard-efficiency units and minor modifications, while higher-end installs use top-tier equipment plus extensive duct or structural work.

Breakdown By Equipment Type

• Standard Gas Furnace: $2,500–$5,500 installed. Good choice for budget-focused replacements in colder climates.

• High-Efficiency Gas Furnace: $4,000–$8,500 installed. Higher AFUE delivers better annual fuel savings.

• Central Air Conditioner (Split System): $3,000–$6,000 installed. Efficiency measured by SEER; higher SEER costs more upfront.

• Heat Pump (Air Source): $4,000–$10,000 installed. Can provide heating and cooling, ideal in moderate climates and for electrification goals.

• Air Handler (Electric) or Matching Coil: $800–$2,500. Required when pairing new AC with existing furnace in some configurations.

Major Factors That Affect Price

Several variables change the cost of a new furnace and central air installation. Understanding them helps homeowners evaluate quotes and prioritize spending.

Equipment Efficiency And Features

Higher-efficiency furnaces (AFUE ≥95%) and air conditioners (SEER 16+) cost more for equipment and often require more complex installation. Variable-speed blowers, modulating gas valves, two-stage compressors, and smart thermostats add to equipment costs but can improve comfort and reduce utility bills.

Size And Capacity Requirements

Correct sizing (measured in BTU for furnaces and tons for AC) is critical. Oversized or undersized systems cause inefficiency and comfort issues. A proper load calculation (Manual J) may add $150–$400 to upfront costs but prevents expensive mismatches.

Ductwork Condition And Modifications

Existing ducts in poor condition require sealing, insulation, or replacement. Simple sealing and insulation run $300–$1,500, while extensive duct redesign or replacement can be $3,000–$10,000 depending on home layout.

Labor And Regional Differences

Labor rates vary by region. Urban or high-cost-of-living areas typically see higher labor charges. Expect labor to represent 30%–60% of the total project cost depending on complexity.

Additional Home Upgrades

Electrical panel upgrades, new gas line installation, permit fees, condensate drain modifications, and permit inspections can add several hundred to several thousand dollars to the total price.

Energy Efficiency And Long-Term Savings

Choosing higher-efficiency systems increases upfront cost but reduces operating expenses over time. Calculating payback involves fuel costs, local climate, and usage patterns.

Estimating Annual Savings

Upgrading from an 80% AFUE furnace to a 95% AFUE unit could save roughly 10%–20% on annual heating fuel bills depending on fuel type and climate. Switching to a high-SEER AC can lower cooling bills by similar percentages.

Payback Period

Typical simple payback for high-efficiency equipment ranges from 5 to 12 years. Homes with high usage or in climates with long heating or cooling seasons see faster payback. Incentives shorten effective payback.

Incentives, Rebates, And Tax Credits

Federal, state, and utility rebates often help offset costs for high-efficiency equipment and heat pumps. Programs change regularly, so checking current offers is essential.

Federal Tax Credits And Programs

Federal tax credits and energy-efficiency incentives have historically supported heat pumps and high-efficiency systems. Homeowners should consult IRS guidance and utility program pages for current eligibility rules and credit amounts.

State And Local Rebates

Many states and local utilities offer rebates for ENERGY STAR equipment or qualifying heat pumps. Rebates can range from a few hundred to several thousand dollars depending on the program.

How To Find Incentives

Use tools like the Database Of State Incentives For Renewables & Efficiency (DSIRE) and local utility websites to identify current programs. Contractors often assist with paperwork to claim rebates.

Financing Options And Cost Management

Various financing methods make replacing a furnace and central air more affordable by spreading payments over time.

Home Improvement Loans And HELOCs

Home equity lines of credit (HELOCs) and home improvement loans typically offer larger sums at varying interest rates. Suitable for homeowners seeking longer-term financing with potentially lower monthly payments.

Manufacturer Or Contractor Financing

Many HVAC dealers offer promotional financing, zero-interest periods, or low monthly payment plans. Read terms carefully to avoid deferred-interest traps and high long-term rates.

Energy-Efficiency Loans

Some states and municipalities offer low-interest loans specifically for energy upgrades. These programs often include favorable terms for qualifying homeowners.

Choosing The Right Contractor

Selecting an experienced, licensed HVAC contractor ensures proper installation and protects the homeowner’s investment. Quality of installation often matters as much as equipment choice.

Licensing, Insurance, And References

Verify contractor licensing and insurance. Request references and check online reviews. Confirm that the installer has experience with the selected equipment brand and local codes.

Detailed Written Estimates

Obtain multiple written estimates that outline equipment models, capacities, efficiency ratings, warranty terms, labor details, and any extra costs. Avoid low-ball bids that lack details.

Ask About Load Calculations And Commissioning

Ensure the contractor performs a Manual J load calculation and commits to proper system commissioning after installation. Proper balancing and startup reduce callbacks and maximize efficiency.

Common Installation Scenarios And Example Costs

Scenario	Typical Cost Range	Notes
Replace existing furnace and AC with similar mid-efficiency units	$7,000 – $10,000	Minimal ductwork changes; straightforward swap
Upgrade to high-efficiency furnace and high-SEER AC	$10,000 – $15,000	Includes possible electrical/gas upgrades
Install heat pump to replace furnace + AC in mild climate	$8,000 – $14,000	May reduce or eliminate natural gas use
Major remodel requiring new ductwork and structural access	$12,000 – $25,000+	Higher labor and containment work costs

Maintenance, Warranties, And Lifetime Costs

Maintenance and warranty coverage influence long-term value. Regular tune-ups extend equipment life and keep efficiency high.

Routine Maintenance

Annual or biannual HVAC tune-ups typically cost $100–$300 per visit. Tasks include filter changes, refrigerant checks, airflow inspection, and safety tests. Maintenance reduces breakdown risk and preserves warranties.

Warranty Types

Equipment warranties vary: standard parts warranties are common, while extended and labor warranties cost more or require dealer maintenance plans. Verify warranty registration and required maintenance to maintain coverage.

Frequently Asked Questions

How Long Does Installation Take?

Typical replacement installations take one to three days. Complex jobs involving ductwork or structural modifications can take longer. Planning helps minimize homeowner disruption.

Is It Better To Replace Both Furnace And AC At Once?

Replacing both ensures matched equipment for efficiency and longevity. Mixed-age systems can stress components; single replacements sometimes require adapter components that reduce efficiency.

What Is The Lifespan Of New Equipment?

Furnaces last 15–25 years depending on maintenance and usage. Central air conditioners typically last 12–20 years. Heat pumps often last 10–15 years depending on climate and maintenance.

Checklist For Getting Accurate Quotes

1. Ask for a Manual J load calculation and system sizing details.

2. Request model numbers, efficiency ratings (AFUE and SEER), and installation scope in writing.

3. Confirm ductwork assessment, permit requirements, and disposal of old equipment.

4. Compare warranties, maintenance plans, and post-installation commissioning steps.

5. Check contractor licensing, insurance, and three references or online reviews.

Key Takeaways

Replacing a furnace and central air is a significant investment. Typical combined costs range from $7,000 to $18,000, but exact pricing depends on equipment, ductwork, labor, regional market, and incentives. Homeowners who prioritize proper sizing, quality installation, and available rebates will find the best long-term value.

For tailored estimates, obtain at least three written quotes from licensed HVAC contractors, confirm load calculations, and research current federal and local incentives to reduce net cost.