How Much Does It Cost to Replace a Furnace in Phoenix, AZ?

Updated April 2024

If it’s time to replace your aging gas furnace, cost is the first thing on your mind, right?

So how much will replacing your furnace cost you when all is said and done? Well, in the Phoenix area, a furnace installation costs anywhere from $5,000 to $8,500.

We know that’s a big price range. But without inspecting your home and heating needs, it’s tough to give an accurate price.

But we can give you 4 rules of thumb for estimating your furnace installation cost:

• The higher the furnace’s AFUE, the higher the cost.
• The bigger the furnace size, the higher the cost.
• The more comfort features your unit has, the higher the cost.
• The more duct issues and installation difficulties your tech encounters, the higher the cost.

We’ll explain each of these factors below.

Every furnace has an “AFUE” (Annual Fuel Utilization Efficiency) rating. And the higher the AFUE rating, the higher the cost of the furnace.

Why? Well, a higher AFUE rating means a more efficient unit (and lower monthly heating costs).

Here’s how it works:

The AFUE rating is a ratio of how much heat the furnace provided over the course of a year divided by the amount of fossil fuel energy it consumed.

For example, an AFUE of 80% means that:

• 80% of the energy in the fuel becomes heat for the home
• 20% of the energy is lost via condensation or flue gases

Another way of looking at it is an AFUE of 80% means that for every dollar you spend on heating your home, 80 cents goes toward actual heating and the other 20 cents is wasted.

AFUE ratings range from 80% to 98.7%.

At the very minimum, we suggest you get an 80% AFUE furnace (the federal minimum). But we suggest going even higher. Why? Well, come 2021, the federal minimum standard for gas furnaces could be raised to 92% AFUE.

Ultimately, though, you’ll want to ask a professional HVAC tech for advice on the AFUE rating you really need.

A furnace is sized by how much heat it provides in an hour. This measurement of heat output is measured in BTUs (British Thermal Unit).

Residential furnaces typically range in size from 30,000 BTUs to 100,000+ BTUs.

But the most important thing to remember is that you don’t get to pick the size furnace you want. Instead, a professional needs to perform a load calculation that will determine the size furnace you need.

A load calculation will tell you how quickly hot air escapes from/cold air enters your home. And this will tell you the correct size furnace you need.

Without a load calculation, you’ll likely end up with either an:

• Oversized furnace, which means you’ll pay more than you need to for the unit. It also means the unit will “short-cycle” (turn on then off quickly) which increases energy bills and decreases the unit’s lifespan.
• Undersized furnace, which means the unit will run longer than it should to keep you warm. And this results in high energy bills and frequent repairs.

Pro tip: Don’t assume that you’re fine replacing your current furnace with one of the same size.

Most furnaces in Phoenix homes were sized incorrectly from the very beginning. And that’s usually because a lazy tech didn’t bother to perform a load calculation. Instead, they cut corners and only looked at the home’s square footage when sizing the furnace (which is only one factor out of many you should consider).

The bottom line? Make sure that you hire a professional who performs a true load calculation to ensure you get the right size furnace.

Not all furnaces are the same. Some come with advanced features that increase your comfort but also raise the price of the unit.

Some of these advanced “comfort features” include:

• Variable speed blowers. Standard furnaces come with fans that have either 1 or 2 pre-set modes (HIGH and LOW). But more advanced furnaces come with variable speed blowers that can ramp up or down to any speed according to how much heat is needed. These advanced blowers increase your comfort but also lower the furnace’s operating costs.
• Modulating heat stages. Furnaces with modulating heat stages can control just how hot the burners in the furnace get. This allows for very precise heating temperatures and lowers your monthly bills. Other standard furnaces come with only 1 pre-set heating modes—HIGH.
• Smart/programmable thermostats. Some homeowners opt to upgrade to a smart or programmable thermostat when they replace their furnace. These thermostats allow you to set heating schedules to lower your monthly bills and can even allow you to adjust your home’s temperature remotely.

The more difficult it is to replace your furnace, the more you’ll have to pay for time and labor (and possibly materials).

Some examples of “difficult” furnace replacements include:

• Homes that have ductwork issues (leaky or very dirty ducts)
• Furnaces that are installed in hard-to-reach areas like the attic or basement
• Switching from an electric to a gas furnace