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How Much Does a Furnace Installation Cost in Phoenix, AZ?

November 17, 2016

Updated June 2024

So you’re in the market for a new furnace and want an idea of average installation prices. Well, installing a new furnace in Phoenix, AZ costs anywhere from $5,000 to $8,500.

But you’re a smart shopper and want to know what factors affect the overall pricing.

So, let’s take a closer look at what determines the price you’ll be quoted once you start making calls to local contractors.

Ready for specific prices? Contact us for a free quote on a furnace installation in Phoenix.

The cost of a furnace installation in Phoenix depends on 3 things…

The furnace unit itself

The cost of furnace itself changes based on the following factors:

Furnace type (gas or electric)

How it affects price: Gas furnaces have a higher upfront cost than electric furnaces but usually provide lower monthly heating costs.

For the most part, homeowners can choose from 2 furnace type options: a gas furnace or an electric furnace.

If your home doesn’t have gas lines, then you’re going to get an electric furnace. But if you have access to natural gas, you’ll need to choose between a gas furnace and an electric furnace.

So, how do you choose? Well it really comes down to what matters most to you. Gas furnaces generally have a shorter lifespan (10-20 years), a higher installation cost and pose the risk of leaking dangerous gases. But they are cheaper to operate, which means lower monthly utility bills.

Electric furnaces are cheaper to install, last longer (20-30 years) and don’t pose the risk of leaking dangerous gases but they are more expensive to operate, which means higher monthly heating costs.


How it affects price: The larger the furnace size, the more expensive it is.

Furnaces are sized according to how much heat they can provide in a given time. The higher the “BTU’s” (British Thermal Unit), the more heat they produce in a certain time. Residential furnaces are typically anywhere from 40,000 to 120,000 BTUs.

The important thing to remember is that you don’t have a say in what size furnace your house needs. A professional needs to perform a Manual J calculation to determine the correct furnace size for your home.

AFUE Rating

How it affects price: For gas furnaces, the higher the AFUE rating, the more expensive the furnace. But higher ratings also mean higher monthly savings.

Every furnace comes with an AFUE rating (Annual Fuel Utilization Efficiency) that measures how much of your furnace’s fuel is converted to heat. All electric furnaces have an AFUE rating of 100% but gas furnaces have varying AFUE ratings. Gas furnace ratings vary from 80% to 98%.

Let’s say you have a gas furnace with an AFUE rating of 90%. That means that 90% of the gas it consumes is converted into heat but 10% of the gas is wasted during the process. That means that for every dollar you spend on natural gas for your furnace, $.90 goes toward heating while $.10 is wasted.


How it affects price: Bigger brands are generally more expensive than lesser-known brands.

Just like clothes, tech products or shoes, the bigger, better-known brands cost more when it comes to furnaces. But the payoff is in knowing that you’ve purchased from a company that you can trust to stand by their product.

Our advice is to do some research on various brands. See reviews on the top-ranking furnace brands in this article.

Advanced features

How it affects price: The more advanced features your furnace has, the more comfort it will provide but the more expensive it will be.

Newer furnaces come with advanced features that increase your comfort and the efficiency of your furnace. Some of these advanced features include:

  • Modulating heat stages. This refers to how hot a furnace’s burners get. While standard furnaces offer 1 or 2 stages of heat (high and low), modulating furnaces have burners that incrementally adjust the level of heat they give off. This saves you money in the long run but also provides precise, steady temperatures.
  • Variable speed blower motor. Standard furnaces come with pre-set fan speeds. Think of the low, medium and high settings on a typical oscillating floor fan. Now, imagine a fan that allows you to speed up or slow down the fan blades according to exactly how much air at any given time. That’s how a variable speed blower motor works.
  • Programmable thermostat. A programmable thermostat automatically adjusts the temperature of your home according to a pre-set schedule you set up. While these thermostats aren’t technically a part of the furnace itself, they can be installed alongside your new furnace to improve its performance.

2. Cost for labor

How it affects price: Higher quality, more experienced contractors are typically more expensive than less experienced (and sometimes untrustworthy) contractors.

When it comes to the overall furnace installation price, the bulk of that total cost goes toward the labor. That’s because installing a furnace correctly takes time, experience and knowledge.

Research various local contractors and get several estimates but beware contractors who offer very low prices. Make sure the professional you hire is licensed, insured, experienced and has a good reputation.

3. Warranties & advanced features

How it affects price: The better the warranty (longer & more coverage) and the more advanced features a furnace offers, the more expensive it will be.

Furnaces have 2 types of warranties:

  1. Manufacturer’s warranty
  2. Extended warranty

The manufacturer’s warranty is often incorporated into the initial price of the furnace and include the parts warranty as well as the heat exchanger warranty. Parts warranties typically last anywhere from 5-10 years while the heat exchanger warranties usually last for 15 years (lifetime of the heat exchanger).

An extended warranty is purchased by the consumer alongside the manufacturer’s warranty and usually cover the cost of labor for repairs throughout the life of the warranty.

Ready for a furnace installation quote from an AZ tech?

Live in the Phoenix area and looking for an estimate on your furnace installation?

Just contact us today and we’ll give you specific pricing.

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By Ty Lindsay

Ty Lindsay is the Director of Field Operations at Patrick Riley | Isley’s and a 15-year veteran of the plumbing and HVAC trades. In 2010, Ty earned his Journeyman’s plumbing license. He became a Master Plumber five years later and earned his Journeyman HVAC technician’s license that same year. Ty’s breadth of knowledge in plumbing and HVAC includes both residential and commercial work. He’s been a loyal member of the Patrick Riley | Isley’s team since 2016.