What a new furnace costs in Michigan, and what we can and cannot tell you

Why efficiency is the first decision

Michigan’s heating season is long: NOAA’s 1991 to 2020 normals put Detroit Metro Airport at about 6,067 heating degree days a year. A furnace that runs that much makes the efficiency rating, not just the purchase price, part of the cost. Two ratings matter on a quote.

The federal floor for a non-weatherized gas furnace is 80 percent AFUE (annual fuel utilization efficiency, the share of fuel that becomes heat). ENERGY STAR certifies gas furnaces at 97 percent AFUE or better in the North, and Michigan is on the North list. We do not state the federal figure that takes effect in 2028, because the regulation may have been changed since the version we read.

What the federal sources say about the gap

ENERGY STAR says certified gas furnaces in the northern half of the country are up to 18 percent more energy efficient than baseline models and can save $160 a year. That is an ENERGY STAR estimate, and the page does not state the baseline, the fuel price or the house.

The Department of Energy’s Federal Energy Management Program (FEMP) gives a worked illustration for the Northern region and a 70,000 Btu/h furnace. Annual energy cost comes to $597 at 80 percent AFUE, $503 at 95 percent ENERGY STAR, and $482 at 99 percent. FEMP says an ENERGY STAR furnace saves money if it costs no more than $1,345 above the 80 percent model, in 2023 dollars. Its lifetime figures ($8,520, $7,174 and $6,885) assume 21 years, which is FEMP’s assumption and not a Michigan lifespan.

One caveat matters more than the rest: FEMP uses $0.961 per therm, the federal-facility average for July 2024, and not a Michigan household’s gas price. Use the illustration to see the method, which is whether the extra purchase cost buys back enough in energy, and then run it with the price on your own bill.

What we have, and what we are still collecting

No company prices are in the table yet. We are gathering what Michigan heating and cooling companies publish on their own sites and will add it with the number of companies and the date we read them. For now the table holds wages and permit fees.

Row	Figure	What it is
Michigan, statewide	$31.01 mean, $29.26 median an hour	Pay for heating, air conditioning and refrigeration mechanics and installers
Detroit-Warren-Dearborn	$32.06 mean an hour	Same occupation, metro area
Grand Rapids-Kentwood	$30.86 mean an hour	Same occupation, metro area
Lansing-East Lansing	$30.49 mean an hour	Same occupation, metro area
Ann Arbor	$35.94 mean an hour	Same occupation, metro area
Grand Rapids permit	$52 application plus $21 for a replacement furnace	Fee schedule effective July 1, 2026
Sterling Heights permit	$55 application plus $57 (up to 75,000 BTU) or $64 (75,001 to 500,000 BTU)	Application for 2026 to 2027
Dearborn permit	$100 administrative fee plus an $80 minimum; heating up to 75,000 BTU $50, 75,001 to 500,000 BTU $75	HVAC form dated October 2025
Westland permit	$100 administrative fee; furnace up to 75,000 BTU $83, 75,001 to 155,000 BTU $99	Form revised July 1, 2026
Warren permit (older form)	$80 for a residential furnace	Form revised April 2023, so confirm with the city

Source: U.S. Bureau of Labor Statistics, May 2025 wage release; the city fee schedules named, read October 19, 2026. Wages are what technicians are paid, not what you are charged. Whether Westland’s $100 minimum replaces its $83 line is our reading, so ask the city.

Permit, inspection and plans

LARA’s list of work exempt from a mechanical permit is short: portable equipment under 30,000 Btu/hr, self-contained refrigeration, window air conditioners of not more than 1.5 hp, and oil burners that need no flue connection. Furnace replacement is not on it, so a permit is needed. That conclusion is ours, drawn from the list, and LARA does not print a furnace sentence.

The licensed mechanical contractor secures the permit. An owner who lives in a single-family house may do the work and secure it personally, and must get the inspection after the equipment runs. LARA also says plans are required for a home when total heating input exceeds 375,000 BTU/H, a threshold a replacement furnace in an ordinary house will not reach. Our permit guide goes through who pulls what.

Rebates as of October 19, 2026

DTE’s furnace rebate for gas customers lists $400 for 98 percent AFUE or higher, $200 for 97 and 96 percent, and $100 for 95 percent. A $300 promotional bonus applies to qualified installs from October 1 to December 15, 2026, with applications due by December 18, 2026. DTE’s page carries a Limited Funds Available banner, and rebates are first come, first served.

Consumers Energy’s 2026 chart lists $100 for a gas furnace at 95 to 96.99 percent AFUE and $300 at 97 percent or more, for installs between January 1 and December 31, 2026. The chart says amounts can change without notice and that funds are limited. The rebate finder and our DTE and Consumers rebate guide keep these lines dated.

What a good quote lists, and what to ask

A written quote should name the equipment model and its AFUE, state the labor, and show the permit and any disposal as their own lines. It should say who files the rebate paperwork and what happens to the price if the ductwork needs changes. Ask each company for the license number, the efficiency of what it proposes, and whether the quote assumes a rebate you may not receive.

Ask for two or three quotes at different tiers, so that you are comparing the same decision rather than three different ones. On the size of the unit, ask what calculation was done for your house.

If you are weighing repair against replacement, ENERGY STAR says equipment over 10 years old, or not keeping the house comfortable, should be evaluated by a professional HVAC contractor. ENERGY STAR gives that as a cue for an evaluation and attaches no lifespan to it. Furnace replacement describes the job, and furnace repair cost covers the other side of the decision. A heat pump is a different system with different rebates; see heat pump installation cost.