There’s no doubt that replacing your heating system is stressful, in part because it’s one of the more significant expenses you’ll encounter as a homeowner. You want to make sure you’re getting what you need and that you aren’t overpaying for it.
Unfortunately, no two homes are the same. Even those with the same serviceable area may need different heating solutions. Consider the following factors that will affect how much a new heating system will cost and some expenses most homeowners don’t realize are part of the process.
Types of Heating Systems
There are multiple types of heating systems available to keep your home comfortable and safe. One factor that will affect the cost of your new installation is if you’re replacing it with a similar system or an entirely different kind that requires different a different energy source or new ductwork.
Electric resistance furnaces are the least expensive to install. However, they consume a lot of electricity to produce heat, and electricity is the most expensive furnace fuel.
Gas furnaces are next in line, with costs ranging widely depending on the model you choose. Natural gas is much less expensive than electricity, making them less expensive to run over the life of the furnace.
Gas boilers consume less fuel than furnaces, making them less expensive to run. However, they are more expensive to install and are riskier in terms of property damage if there’s a failure.
Finally, heat pumps and geothermal systems are the most expensive to install. However, they are the most energy-efficient systems, costing the least to heat your home.
Heating Capacity
The size system you need will play a significant role in how much it costs. Furnace size refers to the heating capacity measured in British Thermal Units or BTUs. Generally speaking, the larger the unit, the more it will cost.
Don’t fall for trying to undersize the unit to save a little money when you’re installing it. Trying to use an undersized system causes extended heating cycles that will never heat your home adequately. This drives up your utility costs, increases the number of repairs needed, and shortens the unit’s service life.
System Efficiency
Even among the same-sized units, the system’s efficiency rating will also factor into the price. Higher-efficiency systems are more expensive than less expensive models but will also cost less to operate.
Higher-efficiency gas furnaces have a second heat exchanger, a multi-stage burner, and a variable-speed circulating fan motor. This allows the system to produce less heat and circulate less air for about 70% of its operating time. The result is less fuel consumption and more consistent heating throughout your home.
Heat pumps are already high efficiency, transferring up to 300% more energy than it consumes. The most efficient heat pumps have two-stage compressors and a variable-speed circulating fan, similar to a high-efficiency furnace. These will run at the initial stage most of the time, kicking into the higher stage when temperatures drop, or you’re trying to raise the temperature of your home.
When You Install Your New System
The cost of heating systems is controlled as much by the law of supply and demand as any other product. The vast majority of new systems are installed over the winter when an existing heating system experiences a catastrophic failure. This means that this is the most expensive time to purchase a new system and is also when you’ll wait the longest for your HVAC company to have the time for the installation.
Spring and fall are seasons when heating system manufacturers offer various discounts and rebates to increase sales. People who plan for their system replacement rather than waiting for a catastrophic failure are rewarded with substantial savings when timed correctly. Further, some HVAC contractors offer additional incentives, such as extended labor warranties, to help increase sales during the off-season.
Are You Taking Advantage of Savings?
In addition to contractor and manufacturer savings, you may have various federal and state incentives to further reduce your cost. The Inflation Reduction Act of 2022 provides several federal tax credits and rebates for installing energy-efficient systems like heat pumps.
The Residential Clean Energy Tax Credit offers a 30% credit for geothermal systems. This is a non-refundable credit, but it allows you to roll over an unused credit into the following tax year.
The Energy Efficient Home Tax Credit offers a 30% tax credit for installing a high-efficiency heating system, up to $1,200 per year. The only requirement is that the system must meet the highest efficiency tier set by the Consortium for Energy Efficiency the year it was installed.
The Home Owner Managing Energy Savings rebate offers substantially more discounts for all homeowners who install higher efficiency systems. The rebate is based on the actual impact your new system has on your current energy use but could be as high as $8,000.
The High-Efficiency Electric Home rebate is for low to moderate-income households. This rebate offers savings on several appliances, including $8,000 for installing an electric heat pump for your HVAC system.
Do You Need New Ductwork?
Installing new ductwork will drive up the cost of replacing your heating system. However, even if your current system has ductwork, they are expected to only last 15 to 25 years, after which it can significantly reduce your system’s efficiency.
Talk with your HVAC contractor to determine whether you need new ducts or if sealing and insulating what you have is a viable option for your home. The linear feet of ductwork you have will determine the cost, but the national average is around $4,000 but can exceed $6,000, depending on the size of your system and the number of vents.
Other Costs to Consider
The most significant cost associated with replacing your furnace is the labor to professionally install it. It’s worth seeking several quotes, but use caution simply going with the lowest bidder in terms of labor rate. You want to make sure the team has the experience and will stand behind their work if there’s a problem.
Georgia law requires a mechanical permit for installing or replacing any heating or air conditioning system, which also means it needs an inspection. When you get HVAC contractor bids, be sure to look at the details as to if this is included in the cost.
Finally, if you’re moving where your heating system is located, you may need to run new electrical and gas lines, even if it’s just to the other side of your basement. These new lines will also require permits and inspections, but also require additional work not commonly included in a replacement quote. Be sure to discuss this with your HVAC contractor when discussing the details of a bid if you’re expecting the system to move.
Bardi Heating, Cooling & Plumbing has had a reputation for quality home comfort solutions around Norcross since 1989. Our award-winning team provides heating and air conditioning installation, maintenance, and repair combined with indoor air quality solutions and a host of residential plumbing services such as pipe repair, leak detection, and water heater services. Call to schedule your consultation with one of our trusted technicians to explore the cost of a new heating system for your home.
