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Everything you Need to Know about Electric Furnaces

Updated Nov. 19, 2017
By: Megan Headley

Electric furnaces use electricity as the only source of fuel to heat and distribute air throughout a home. While these furnaces are highly efficient in the sense that, unlike gas or oil furnaces, they transform 100-percent of their fuel into heat, electricity is generally among the more expensive heating options, making their efficient operation generally costly for the homeowner.

While all types electric furnaces are high efficiency, HVAC Contractor Joe Dalbey of Joe's Heating and Cooling in Urbandale, Iowa, notes there may not be a better or worse option when it comes to selecting an electric furnace. "Since electric furnaces all have the same basic heating components, they all convert heat into the home extremely effectively and offer the same level of efficiency. It just comes down to how homeowners want to heat their home," Dalbey says.

How It Works

Before you can understand exactly how an electric furnace works, you must familiarize yourself with the basic parts used in this appliance. An electric furnace contains the following parts:

  • Plenum: A small area that allows air to circulate more freely.
  • Heating relays: These control electricity flow to the heating elements.
  • Heating elements: Used for converting electricity into heat.
  • Blower and Blower motor: Responsible for pushing the heated air out of the furnace.
  • Filter: Prevents the furnace from releasing harmful materials into the surrounding air.
  • Power relay: Controls power flow through the furnace.
  • Transformer: These control voltage and transform it to the type required for the furnace.
  • Return air ducts: Suck in air for the furnace to heat.
  • Sequencers: Switches heating elements on and off in sequential pattern to avoid overloading.

Advantages and Disadvantages

The advantage of using electricity to heat your home includes its safe, clean-burning operation as compared to oil- or gas-burning furnaces. In addition, these units' low upfront cost and the wide availability of electricity in remote areas can attract homeowners to electric furnaces.

However, electricity typically is much more expensive as a fuel source than natural gas and other home heating methods. On top of that, DOE points out that electric furnaces are more expensive to operate even when compared to other electric resistance systems—such as baseboard heaters, wall heaters and electric thermal storage— because of the amount of heat lost as the air moves through your home's ducts.


According to the U.S. Department of Energy, electric furnaces tend to be the heat source of choice in areas where electricity is the only option and the dry climate results in primarily hot or mixed temperatures. In other climates, per DOE, the heat pump becomes the heater of choice since it can reduce electricity use by as much as 50 percent compared to an electric furnace.


Types of Electric Furnaces

Electric furnaces are available in a variety of sizes to heat homes of nearly any size. In addition, many dual furnaces use some form of electric furnace. For example, an oil-electric furnace uses the electric elements during the majority of the furnace use, while the oil fuel is used during peak heating times in order to lower costs.

In addition, electric furnaces often are paired with heat pumps, air handlers or added as the eating component to an air conditioner.


Costs of Electric Furnaces

According to various online reports, the upfront cost of an electric furnace averages around $600 to $700, moving closer to $2,000 for installation of the products. According to the FurnaceCompare.com Price Guide, a gas furnace, without installation, can range in price anywhere from $400 to $3,400, while an oil furnace can start at $1,100 and move as high as $3,900. The comparatively low upfront cost of the electric furnace can make it particularly attractive to homeowners in suitable climates.

While electric furnaces maintain high efficiency and have a lower upfront unit price than other options, operating prices can vary greatly depending on the part of the country in which you live and your electricity costs, as well as the size of the home you are heating.


To roughly determine the cost of operating an electric furnace, determine the cost for a kilowatt per hour from your utility bill. Then, use the kilowatts per hour it takes to heat your home (found by looking at your current utility bill) and multiply it by the cost per kilowatt to determine the heating cost per hour. You also can simplify this process by using an online energy use calculator.


Shopping for an Electric Furnace

Manual J Load Calculation

The Manual J is a calculation to determine how much heating (or cooling) a home requires. This calculation is typically performed by an HVAC contractor as part of the process of quoting you a new system.

Furnace Size

The size of the heating element in your furnace determines its BTU output. A furnace with a 5kW (kilowatt) element can generate a maximum of 17,000 BTUs.


Efficiency Rating

A furnace's efficiency rating does not necessarily reflect its impact on the environment. For example, a 100 percent AFUE (Annual Fuel Utilization Efficiency) may seem appealing because it converts 100 percent of the electricity it uses to generate heat. However, fossil fuels like gas, coal, and oil, are used to generate the electricity needed for an electric furnace. The United States Department of Energy reports that this process is only about 30 percent efficient. You may find that furnaces with efficiency ratings between 80 to 97 percent that burn fossil fuels directly have a lower environmental impact (and also save you money).

Warranty

Warranties vary between manufacturers in regards to the length of time that parts and service are covered. As you shop for an electric furnace, research the warranty on every make and model you are considering. Normally, furnace warranties cover two main areas: the heat exchanger and other components. The heat exchanger can have a 20 year or lifetime limited warranty. The window of coverage for other components can range from a single year to 10 years. While nearly all standard furnace manufacturers' warranties cover the cost of the replacement heat exchanger or other part, the cost of labor is not covered by the manufacturer's warranty. Contractors will typically offer a 100% parts and service guarantee for the first year after installation, and additional years are negotiable.

Additional Features

Some furnaces come with a cooling mode you can use to cool the house during warmer months. These operate in much the same way as any central air conditioner.

Each furnace also has a rating that tells you the maximum current it can withstand. You can choose to install overcurrent protection devices to ensure this limit is not exceeded. This ensures the continued operation of and a longer lifespan for the furnace, which might be worth the additional cost considering the size of the investment you are making into your home.


Installing an Electric Furnace

As with any type of furnace, proper installation and sizing is essential to the longevity and performance of the unit. Finding the size needed of an electric furnace can be done by following the basic calculations performed for sizing gas or oil furnaces.

  • First, use the FurnaceCompare.com sizing calculator to estimate the BTU needed for your home.
  • Next, divide the results by 3,400 (1 kw produces 3,400 BTUs of heat) to convert the needed-heat to kilowatts

While this provides a rough estimate of the size furnace you will need, it is advisable to have a contractor perform a load calculation to determine the exact size unit necessary for your home.

For help finding a qualified service technician to install your electric furnace, see our tips on how to find a contractor in your area.


Tips for Buying an Electric Furnace

You know your heating load, you understand efficiency ratings, warranties, and additional features. The following tips will help you maximize your purchase.

Get Multiple Estimates

Always speak to several HVAC contractors before choosing one to install your new electric furnace. Talk to friends and family to get referrals for contractors and always ask for quotes upfront. Get every quote in writing so the contractor cannot change it after the fact. If you can't get enough referrals, we can help you find a contractor.


Read Reviews

There are reviews for every electric furnace you may consider. Find out what other people have said before committing to a purchase. There are few sources as reliable as word of mouth. You can save yourself quite a bit of hassle by learning from other people's mistakes simply by reading reviews and discussing your purchase with neighbors and HVAC experts.

Ask About Your Ductwork

When you get an estimate for installing an electric furnace, you also want to ask whether your home's current duct systems are adequate. Additional ductwork increases the installation cost and should be factored into your budget.


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