Replacing the gas furnace

Heating is most of your gas

The furnace burns more gas than everything else in the house combined. It's the biggest swap and has the most choices, so decide before it fails.

Three ways to do it

Heat pump with the furnace as backup. The heat pump sits where the AC was and heats the house through most of the winter. On the coldest days, the furnace takes over. With a new furnace, most Xcel gas customers in the Denver metro pay $14,800 to $18,200 out of pocket, on a typical price of $21,000 to $28,000.

Ducted heat pump, no new furnace. A heat pump on your existing ducts, with the old furnace kept as backup or an electric air handler in its place. Out of pocket it runs $10,500 to $14,000 when the old furnace stays, and $15,300 to $19,000 all-electric. Bosch systems sit near the low end and Mitsubishi near the top.

Ductless. Wall or floor units for houses without ducts, or for the room the ducts never reached. One room usually runs $10,400 to $12,200, and several rooms $23,400 to $36,200 (about $17,000 to $30,000 after typical rebates).

Out-of-pocket figures are for Xcel gas customers in the Denver metro; homes with Xcel electric only get about half of Xcel's part. Xcel changed its programs on October 1, 2026, so check current rebates before you compare.

If the AC dies first

That's the easiest time to start. The heat pump goes where the AC was and works with the furnace you already have. When the furnace gives out years later, most of the electric system is already in place.

Check the chimney

In many older Denver basements the furnace and water heater share one metal flue into the chimney. A new furnace vents through plastic pipe out the side wall, and a heat pump doesn't vent at all. Either way the water heater is left alone in a flue sized for two, which often means a liner. Price the water heater at the same visit.

For a price on your house, send photos of the furnace, its label and the outdoor unit, or read more about heat pump installation.