How Much Does a Propane Furnace Cost?

Average Propane Furnace Costs

What Is a Propane Furnace?

A propane furnace burns propane or liquid petroleum gas (LPG) to heat air. Once heated, the air moves through the ducts and into the rooms of your home. The propane is stored in a tank outside your home and connected to the furnace by a fuel line known as a forced air system. Unlike with a boiler system, there's no need for radiators with a forced air furnace. 

Read more about the difference between boilers versus furnaces here.

Propane Furnace Prices by Size

You primarily determine the cost of a propane furnace by its size or British thermal unit (BTU) output. You need the right size furnace to heat your home. If you go too small, you'll find the house always cold, and you'll overwork the furnace as it tries to keep up with demand. Too big, and you'll unnecessarily waste propane as the furnace burns more propane than it needs. 

To figure out how many BTUs you need, multiply your home's square footage by your zone's recommended BTUs per square foot. For example, if you're in Zone 3, multiply 2,500 by 45 for a BTU output of 112,500. 

Take a look at the recommended BTUs per square foot for each climate region in the U.S. and how many BTUs per hour you'd need for a typical 2,500-square-foot house in each zone: 

Once you know how many BTUs you need, you can use the table below to get an idea of the cost of the furnace you need to heat your home adequately:

Propane Furnace Cost per Type

The type of propane furnace you choose impacts costs, regardless of size. There are three types: single-stage being the least expensive, two-stage the happy medium, and modulating the most expensive. However, differences in installation costs are often offset by long-term running costs. 

Single-Stage

Single-stage furnaces cost between $1,600 and $4,400, with most people paying around $3,000. These are the simplest furnace types with only two settings: on and off. When the temperature drops sufficiently, the furnace starts up at full speed to raise the temperature and immediately switches off when it reaches it. It stays dormant until the temperature drops a few degrees below the target, then turns back on at full force. 

This simple system is the least expensive to install but the most expensive to run since it consumes more propane per hour than other types.

Two-Stage

Two-stage propane furnaces range from $1,800 to $5,900. On average, homeowners spend around $3,850 to install a two-stage propane furnace. These units have three settings: off, low, and high. If the house is cold, the furnace uses the high setting to reach the desired temperature, then switches to the low setting to maintain the temperature. 

This setup keeps your home more consistently comfortable and uses less propane, so it’s more affordable to run than a single-stage furnace.

Modulating

A modulating propane furnace costs approximately $2,300 to $6,700, with an average price point of $4,500, installed. Also known as a continuous furnace, a modulating model runs continuously with multiple settings. 

Although it's always on, it has more finesse than other types, consumes less fuel, and is much more efficient. Although these units cost more to install, they're much more energy-efficient and cost-efficient over time.

Propane Furnace Cost by Brand

The brand you go with can have a big influence on cost. Don't just go with the least expensive option. Shop around, choose the right furnace for your home, and look at the extras you get for your money, such as service agreements or extended warranties. 

Propane Furnace Cost by Efficiency

You can choose between a standard-efficiency furnace or a high-efficiency one. Standard-efficiency models cost less up front but only achieve between 80% and 90% efficiency. That means that for a 100,000 BTU-rated furnace, you'd only get between 80,000 and 90,000 BTUs of heat into your home. The rest is wasted energy. 

On the other hand, a high-efficiency propane furnace achieves 90% to 99% efficiency, so there's much less wasted energy. Although a high-energy propane furnace costs more up front, it's less expensive to run per hour, adding significant savings over time. 

Propane Furnace Cost Breakdown

There are many different tasks and costs involved in installing a propane furnace. For a standard installation, labor costs between 30% and 50% of the project. However, the extent of the work, any repairs, adding ductwork, and other related tasks can significantly change the project price.

Materials

The furnace itself costs between $600 and $3,600. Standard-efficiency, single-stage furnaces are priced toward the lower end of the range, while high-efficiency, modulating furnaces fall on the upper end. The cost of additional materials—such as ductwork, pipes, insulation, propane tank, and drain lines—can add an extra 25% to 50% to your material costs.

Labor

Typically, labor costs between $1,000 and $3,100 for an average propane furnace installation. But you'll pay more for HVAC pros near you who charge between $75 and $150 per hour, with standard installations taking between 10 and 20 hours. You'll pay more for extra work like installing new intake lines, exhaust pipework, insulation, new ductwork, and HVAC zoning.

Other Propane Furnace Cost Factors

You'll pay more in labor and materials if you need anything other than a standard installation. Take a look at some common tasks that influence the price of furnace installation. 

Installing a New Furnace and Ductwork

If instead of replacing an old furnace, you're facing the cost of installing a new furnace and all the necessary ductwork, you'll spend between $5,000 and $12,000, including labor. This includes new ductwork, priced at about $2,000 to $6,000, alongside the furnace. 

Converting to Propane

If you already paid for the cost of a natural gas furnace, it may be able to burn propane instead with minimal setup needed. Alternatively, you may have to buy a conversion kit, which costs between $75 and $250. 

If you want to convert an electric furnace to propane, expect to pay between $4,500 and $10,000. And if you have an oil furnace, you'll spend between $6,500 and $13,000 to convert it to a propane model. 

Running Costs

Propane costs more per hour than natural gas but less than oil and electricity. To work out exactly what you'll pay, you need to do some calculations. First, find the current average propane cost in your area, according to the U.S. Energy Information Administration. Then, take the average national price, which is currently at $2.66. The BTUs per gallon is 91,547. And lastly, you’ll need to know your home's square footage and climate zone. 

For example, a 2,500-square-foot house in Zone 3 requires 40 to 45 BTUs per square foot. We'll use the higher per-square-foot number. Multiply the square footage by the per square foot BTUs, or 2,500 x 45 = 112,500 BTUs per hour.

Take that figure, which is the required number of BTUs per hour, and divide that by the BTUs per gallon to find out how many gallons we'll use per hour: 112,500 / 91,547 = 1.23 gallons per hour. Multiply the cost of propane per gallon in your area by the required gallons per hour: 1.23 x $2.66 = $3.27. So, it would cost $3.27 per hour to run a propane furnace in a home with these specifications.

Maintenance Costs

Maintenance costs on a newer furnace should be minimal. However, hiring a pro for annual or biannual furnace service, inspection, and tune-up is advisable. This costs around $200 to $400 but helps to stave off significant problems and keeps your furnace working at peak efficiency. Repairing a furnace costs considerably more than regular servicing.

Adding Central Air

If you have a furnace, you can use the same ductwork to add central air. Installing central air costs between $3,900 and $7,900. It's a good option for cooling the air in your home year-round, using propane and forced air in the winter and electric air conditioning during the warmer months.

Installing a Propane Tank

If you don't already have a propane storage solution in place, you'll need to rent or buy one. Installing a propane tank costs between $280 and $8,150, depending on whether it's above-ground or below. If you want a buried tank, you'll pay considerably more for the installation because of the excavation cost. Propane tanks are priced at about $30 to $3,500, depending on the size and type.

DIY Propane Furnace Installation vs. Hiring a Pro

Installing a furnace isn’t a job you should tackle yourself. It requires the skills of a qualified, licensed pro. Hire a local furnace installer who can take care of all the permit requirements, safety considerations, and the installation itself. 

Propane furnace installers require specific certifications from the North American Technician Excellence (NATE); the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE); or the National Propane Gas Association (NPGA). 

Additionally, your state may have separate licensing requirements, so make sure you do your due diligence before you commit to a contract.