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Furnace Replacement in Watertown, MN

A furnace replacement in Watertown runs $4,500–$9,500 installed, quoted flat-rate in writing after a Manual J. Township homes on propane can get the same condensing furnaces, set up for LP.

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Furnace replacements in Watertown homes

Replacement in Watertown's newer neighborhoods is mostly first-time: an original furnace from the 1990s or 2000s coming out of a split-entry or two-story, often with the AC due at the same time. A Manual J resets the size, and the PVC venting and condensate drain are usually already in place, though pipe size and termination clearances have to match the new furnace's manual.

Near downtown, the old brick chimney decides a lot. An 80% furnace can stay on it with a proper liner; a 96–98% condensing furnace skips it entirely but orphans the water heater, which then needs its own liner or a power-vent model. Low basements can make a tall furnace and coil stack tight. In the township, a dual-fuel heat pump is worth pricing alongside a propane furnace.

Updated October 27, 2026

What affects the price of a new furnace in Watertown?

By efficiency: 80% AFUE roughly $4,500–$6,000; 96–98% AFUE roughly $6,500–$9,500. See the furnace replacement cost guide.

Are there rebates for a new furnace in Watertown?

Watertown is one of the towns where Xcel Energy supplies both gas and electricity, so rebates for a high-efficiency furnace, a heat pump or a central air conditioner all come from Xcel, each with its own rules. The gas furnace rebate points to a participating contractor, and ducted heat pump rebates call for a Trade Partner Network contractor. Township acreage on propane won't get a gas furnace rebate, but a heat pump can still qualify on Xcel electric. Rebate programs change every year, so check the utility's current terms before you buy.

Our guides: Xcel and CenterPoint rebates, heat pump rebates.

Furnace replacement in Watertown: questions

Can a Watertown township home on propane use a high-efficiency furnace?

Yes. Most 96–98% furnaces can be set up for propane with the manufacturer's conversion kit, and the condensing design gets more heat out of every gallon, which matters more at propane prices. A dual-fuel setup goes a step further: a heat pump handles milder weather and the propane furnace covers deep cold. We quote the furnace alone and the dual-fuel option side by side.

What happens to the old brick chimney when a Watertown house switches to a 96% furnace?

The furnace stops using it, but a gas water heater often still does, and a chimney sized for two appliances is too big for one small, cool flue. Condensation can damage the masonry and weaken the draft. The fix is a correctly sized liner or a power-vent water heater. If nothing else vents into the chimney, it can be capped. The written quote includes the chimney plan.

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