What Is an Electric Furnace and How Does It Work?

What Is an Electric Furnace and How Does It Work?
Luke Watson
Residential Sales Professional

I am a Residential Sales Professional for Fire & Ice. I provide customized solutions based on a customer’s home needs and desired comfort.

About This Article

What is an electric furnace and how does it work? We compare electric furnaces to gas furnaces, talk about efficiency, fan types, sizing, capacity, and factors that can lengthen or shorten a furnace’s life.

During the winter, your electric furnace is a workhorse. As the temperature drops outside, it works even harder inside, striving to keep your home warm and cozy.

Hopefully, it does its job quietly and without fuss. But maybe it needs maintenance. Maybe it’s not quite heating the upstairs bedroom as it did in the past. Maybe it’s making a bit more noise.

Maybe you’re spending more and more time thinking about its lackluster performance, and you’re wondering what to do next.

And maybe you’d like to be better prepared when you talk to your local HVAC expert when it comes time to explore options.

If so, this article is for you.

We’ll explore how your electric furnace works, how it differs from a gas furnace, talk about issues it might be having and why, and, finally, explore the costs of a replacement.

The more you know, the better your questions. The better your knowledge, the better your understanding of your options.

So let’s start with some of the basics.

How Electric Furnaces Work

An electric furnace consists of an air handler that has heating coils added to it (sometimes called a heat package or heat strips). Often, an electric furnace will act only as auxiliary or “emergency” heat, with the main heating coming from the electric heat pump.

RELATED: Air Conditioner, Heat Pump, Furnace & Air Handler: What’s the Difference?

In a few ways, electric furnaces work a bit like a toaster. The heated coils act in much the same way, even glowing red when they’re hot. If there were an airstream flowing through your toaster, pushing the warm air into your home, you’d have a miniature electric furnace.

When the thermostat notices a difference between the indoor temperature and its settings, it will “call” for heat from the central heating system. The heating coils in the air handler will begin to warm up, and your blower fan will push the heat at a specific rate through your ductwork and into your home.

Once the desired temperature has been reached, the thermostat relays another signal to the system to shut down until the next call for heat.

A furnace.

Electric Furnaces vs. Gas Furnaces, Pros & Cons

  • PRO: Electric systems can be amazingly cost-effective in warmer climates. Some homes with solar panels can run electric systems at little-to-no cost.
  • PRO: The environmental impact is lower than some gas furnaces.
  • PRO: High-efficiency heat pumps can provide reliable heat even in freezing temperatures, if the climate is warm and friendly.
  • CON: Entry-level or even mid-grade heat pumps will often struggle in cold climates, necessitating expensive supplemental heat from the heat strips in your electric furnace.
  • CON: The cost of electricity is currently much higher than natural gas.

Unlike a gas furnace, which can operate at 80 - 96% efficiency, an electric furnace runs at 100% efficiency. Nothing is wasted during the heating process.

 Even an electric furnace with a single-stage blower operates at around 96 AFUE, with 100 being the highest level. AFUE stands for Annual Fuel Utilization Efficiency. It is a measure of furnace efficiency. AFUE uses percentages (up to 100%) that signify how much usable heat is produced by a furnace. For example, an 80 AFUE furnace will produce 20% waste gas, while 80% of the fuel it burns will go toward heating your home.

It was created by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) and has been implemented as a mandatory rating standard by the Department of Energy.

Electric Furnaces Paired With Heat Pumps

Electric furnaces are traditionally paired with heat pumps, which provide both heating and cooling. Electric systems are popular in the southern United States where the heating burden is lower in the winter months. This allows the heat pump to handle a larger portion of the overall heating.


  • Hyper-efficient and environmentally friendly. A byproduct of gas furnaces, for example, is carbon monoxide. No such gas is created by an electric furnace.
  • Fewer internal parts than most gas furnaces, which makes maintenance easier.


  • The cost of electricity is historically high, creating exorbitant energy bills for some.
  • A high-efficiency heat pump should be paired with an electric furnace in colder areas. The initial cost of these units may put a large dent in your budget.

An efficiency meter at 100% efficiency.

What Size Should Your Electric Furnace Be?

The “size” of your furnace, which is more easily understood as the power or heating capacity of a furnace, is an important factor in any home.

The appropriate size for your furnace is determined by a calculation called the Manual J Load Calculation. This is a fancy name that just means an HVAC contractor measures things like the square footage of your home, the number and size of the windows, what condition those windows are in, the height of the ceilings, the condition of the insulation, and more.

The result of the calculation is a tonnage, which is measured in British Thermal Units (BTUs). One “ton” is equal to 12,000 BTUs of heating capacity. Residential furnaces generally range from one ton to five tons. Any greater need would likely require multiple furnaces, but this is generally only for businesses and the largest houses.

Both the Air Conditioning Contractors of America (ACCA) and the Department of Energy state that all HVAC contractors should perform this calculation.

Single-Stage, Two-Stage, and Variable-Speed Furnaces

A standard, single-stage furnace has exactly two settings: 100% on and 100% off. You get full heat or nothing. This is the most affordable option up front. The downside is that the fan is wildly inefficient and doesn’t offer consistent, even heat.

A two-stage furnace can run at 100%, or a lower speed: 60 or 70% of its maximum heating capacity. Why is this important? Because you don’t always need 100% of your furnace’s heating output. This saves on electricity and can provide more even heat.

A variable-speed (or modulating) furnace has numerous settings. Often, the lowest stage is 40% of the unit’s maximum output.

What Are the Benefits of Multi-Stage Furnaces?

  • It’s the most efficient, by giving you only the heating you need.
  • It can lower your utility bills, especially in more mild winter months when 100% heating output isn’t needed.
  • Lower heat stages allow the air in your home to mix more thoroughly. The fan runs longer at a lower energy rate. On a typical winter day, this means that there will be fewer cold spots in your home as a result of unmixed air.
  • Less starting and stopping for your equipment means less wear and tear on it long-term, even if it’s occasionally running longer. Imagine cruise control on your car, and how the mph you set as the cruising speed stays steady, but the inner workings of your motor will change depending on the terrain and incline.
  • It has a quieter operation at lower stages.
  • Most modulating furnaces come with learning technology, which allows the system to adjust its settings to better heat your home and provide you with optimal comfort.

A Carrier furnace.

Importance of Changing Your Filter

Changing your filter is something you can have included as part of a maintenance visit, but you can also do it yourself.

How often you change it depends on a few factors. Low-end furnace filters are sometimes good for no more than a month or two.

Most filters will need to be changed every 3-6 months.

A few can last up to a year without needing to be replaced or cleaned. Consult the materials that come with your filter for the proper length of time between replacements. It’s worth taking a look at the filter once in a while to determine how dirty it is, regardless of the suggested date when it needs to be changed.

And if you don’t change the filter when it’s due...

Your air will be dirtier, which can affect your allergies and health. Filters can (and do) trap bacteria and viruses (including coronavirus particles), so you’re putting yourself at greater risk of the flu and other illnesses. That dirty air clings to the parts inside of your furnace, lessening its life. The system loses efficiency, and must work harder to provide the same level of comfort.

Buy Your Filter

Furnace Maintenance and Tune-ups

The single most important thing you can do to ensure the longevity of your furnace is to have it tuned up yearly. DIY guides out there show you some of the steps that go into furnace maintenance, but a trained HVAC professional is going to be better able to assess your system for a variety of risks, and take steps to prevent larger problems.

The difference between getting or ignoring yearly maintenance is often the difference between a system that lasts 8-12 years and one that lasts 15-20. And during that time, the tuned-up furnace is operating more efficiently. It’s also saving you money.

So what’s included in furnace maintenance? The list below isn’t comprehensive, but includes the most common steps taken by our technicians:

  • Safety shut-off equipment
  • The condition of your system’s filter
  • Your furnace’s temperature rise
  • The condition of your system’s blower motor
  • Proper “teamwork” between the the furnace and heat pump
  • Proper operation of the heat strips and controls

Signs You May Need Furnace Repair

Your furnace isn’t always going to warn you when it needs to be repaired. You often have to look for the warning signs. What are those warning signs? They could be any of the following:

  • Changes in airflow
  • Noticing more cold spots than usual
  • Cool air (or no air) coming from a particular vent
  • Short cycling. If your furnace is kicking on and off more than usual, something is probably wrong. Your furnace might be what’s called “short cycling.” It should be able to heat evenly over a consistent period of time without a lot of starting and stopping. This not only is a warning sign, but can further damage the furnace if left unchecked.
  • Abnormally long runtime. Can’t seem to get the house warm? You likely have issues with your furnace unit. If you find your furnace running for hours without proper heat, call a professional.
  • Abnormal sounds and smells. No, it’s not normal to smell something odd whenever your furnace kicks in. It’s likely a sign of excessive dust or mold. Additionally, if it runs loud, that means one or more parts are extremely degraded or improperly tuned.
  • Higher than normal energy bills. A loss of efficiency equals more electricity usage.

The bottom line is that you need to be proactive in monitoring the health of your furnace if you want to get the most out of it. No one likes having to remember to schedule maintenance or pay the small yearly fees for tune-ups.

Related: Cost of Waiting to Repair or Replace HVAC Equipment

How to Choose the Right Electric Furnace

How do you choose the right heating system for you, your home? Simple: you ask the right questions. Then, whether you answer them yourself or with the help of an HVAC partner, you’ll be well-positioned to make the choice that’s best for you.

Q: Does my area of the country have harsh winters?

If you’re in the southern United States, chances are you don’t need a lot of heating in the winter. Therefore, an electric system - a furnace coupled with a heat pump - is a viable option. In northern climates with frequently freezing temperatures, the cost of electric utilities can be incredibly expensive. In that case, you’re often better off with a natural gas system if you have access to a natural gas line, or a high-efficiency electric system or heat pump.

Fire & Ice operates in Columbus, Ohio, where we can have harsh winters. The “heating season” can often be around six months of the year. Electric furnaces provide high-efficiency heating, but the cost of electricity is a lot higher than natural gas. Unless your home lacks access to a natural gas line, an air conditioner and gas furnace are the cheapest long-term solution.

Q: What’s my budget? Do I care more about low utility bills long-term or upfront cost?

High-end equipment means a pricier initial investment. But depending on how long you plan on staying in your home, it can pay for the difference in upfront cost over time. That factor needs to be weighed against your initial budget.

Q: Do I want a comparable furnace to my old one, or do I want an upgrade that will provide greater levels of comfort?

How good was your old furnace? Are you replacing it because a costly part broke, but otherwise it heated your home well? A similar system may be what you want. However, if you had issues with your previous system, what’s the point in getting the same thing again?

Old problems will not go away, including:

  • Excessive noise
  • Improper heating (cold spots in your home)
  • High electric bills

This leads to the next topic...

What Is the Recommended Capacity of Your Furnace?

When a sales professional visits your home, they should perform a Manual J Load Calculation to determine the capacity needed in an HVAC system to properly heat and cool your home. The industry standards for these calculations are set by the Air Conditioning Contractors of America (ACCA). At Fire & Ice Heating and Air Conditioning, we always perform an ACCA-approved load calculation to ensure accurate sizing of your system.

This informs a homeowner of the capacity needed to properly service the home. The size of your house matters, but also things like the number and direction of the windows on the home, as well as dozens of other factors.

Naturally, larger systems are more expensive. But if it’s too big, it will “short cycle.” If it’s too small, it will seldom keep up with your thermostat setting.

Q: Do I plan on being in my home for 1-5 years? 5-10 years? 10-20 years?

If you’re leaving in the next five years, we’ll be honest: a high-end system might not be right for you. But if you just moved into a home with your new family and plan to spend 10-15 years in the house, getting a system that will be more efficient and lower utility bills can make a lot more sense. The longer you plan on being in a home, the more you should be looking at variable-speed, higher-end furnace and air conditioning options.

Q: Does my house have issues with low humidity in the winter and high humidity in the summer?

Believe it or not, both of these things can be “furnace” questions. The blower motor in your furnace moves air in both the summer and winter. If you have trouble removing humidity in the summer, getting a modulating, multi-speed system can be most efficient at removing humidity in the home.

In warmer climates, you’re probably better off with an all-electric system. Or at least it’s going to be a lot more cost-effective compared to an electric system in a colder climate.

If you have mild winters and need your furnace for only 2-3 months of the year, a heat pump can handle your heating for half of that time. You may be using a furnace for only one month every year. Properly installed heat pumps are very efficient these days. If a heat pump is providing the majority of your heat, you can usually keep your utility bills manageable.

A graphic of the inside of a furnace.

Cost of an Electric Furnace

So you need to know how much a new electric furnace is going to cost.

We can’t give you an exact price, since that depends on the brand, model, and size of your home. But we can give you an accurate range.

We’ll also explain what goes into the cost of a furnace, and a few notes on making sure you’re getting a good installation.

All prices below include labor costs. These ranges also include things such as permit and inspection fees, which are legally required in most states. All of our furnace installations come with a new filter at no extra charge. The only things it won’t include are large-scale ductwork modifications or woodwork/metalwork that may be needed. Electric furnaces with:

  • Single-stage fan: $3,400 - $4,950
  • Two-stage fan: $4,300 - $6,550
  • Modulating (variable-speed) fan: $6,250 - $7,600

What’s Next

By now, the information in this article should give you a good sense of what your options are, and what’s probably best for you.

The important part is choosing a system that you’re happy with that meets all your needs. And a good HVAC contractor can help with that.

HVAC Contractor Checklist

If you want to read further, a list of related articles is listed below. After all, you may not have found the answer to your question in this article. So maybe further research is the next step.

But if you’re ready to make your decision about an electric furnace, click below or give us a call. We’re looking forward to speaking with you.

Related content:

The Complete Guide to Home Furnaces

Heat Pumps 101: The Ultimate List of Heat Pump FAQS

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