Interior Heating & Cooling

Heat Pump Cost Guide: Installation and Replacement

In moderate climates, heat pumps can be more energy-efficient than furnaces. They typically range in price from $4,206 to $7,688, with a national average of about $5,947.
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Visual 1 - HomeAdvisor - Heat Pump Cost - Cost Range + Average - November 2023

Photo: bobvila.com

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Highlights

  • The typical range for heat pump costs is $4,206 to $7,688 with a national average of $5,947.
  • Cost factors for installing a heat pump include the unit size, type, and efficiency; labor and permits; and geographic location.
  • There are many benefits to installing a heat pump, such as increased energy efficiency, better use of space, environmental benefits, improved air quality, versatility, and increased safety.
  • Installing a heat pump is a complex project that could be dangerous for DIYers. It’s highly recommended that homeowners leave this job to a professional.
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Heat pumps are less expensive to operate than furnaces in regions where winter temps don’t get bitterly cold. According to Angi, the price to have one installed typically ranges from around $4,206 to $7,688, with a national average cost of a heat pump is $5,947. However, a homeowner’s individual cost (and energy savings) will vary.

Installing a heat pump is often considered an eco-friendly way to heat and cool a home because it saves electricity or gas costs. Homeowners will want to learn more about this energy-saving way to keep their home comfortable and find out how to locate a heat pump installer if they decide a heat pump is the right choice.

What is a heat pump?

A furnace uses gas or electricity to power a heating element and then blows forced air over the hot element and into the home to warm it. But what is a heat pump? A heat pump pulls heat from surrounding natural sources (air, soil, or water) and uses it to produce heat to warm up a home. In addition, a heat pump also acts as an AC to keep a home cool by drawing heat out of warm indoor air during the summer. So, instead of needing two units—a furnace and an air conditioner—a heat pump does the work of both.

Some heat pumps are dual fuel units, meaning that they can run on electricity or gas at different times. “[Homeowners] could … work with their contractor to make the decision based on their local utility rates and what their local climate looks like, when it makes sense to run that system in electric mode, and when it makes sense to run it using gas,” says Heidi Gehring, director of residential HVAC product management at Carrier, a manufacturer of HVAC systems. “For instance, when it gets super super cold it makes sense to run it in gas, but if you’re at 30 degrees, it might make sense to heat your home with the heat pump.”

Factors in Calculating Heat Pump Cost

While a heat pump system costs $5,947 on average, the final heat pump cost varies widely. A heat pump cost calculator factors in the size of the unit, the type of heat pump purchased, and its level of efficiency.

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Heat Pump Size

Like an HVAC system, for a heat pump to efficiently warm and cool a home, it must be sized to the home’s living space. According to Gehring, the right heat pump capacity “can be based on the size of the home, the location, the direction the home is facing, how many windows [it has], what trees are in the area—even the layout of the home can play into it. It’s really important to make sure that [homeowners] don’t just guess or look at the size they had previously, but bring in a professional to do that full analysis to give them a quote for what is the right system for their home.”

In discussions about heat pumps, “tonnage” refers to the amount of heat the heat pump can move into and out of the home in a given time. In addition to living space, a professional installer will factor in the climate in the region when determining size. A 2-ton heat pump runs $3,500 to $5,500 and can heat 1,000 square feet. A midsize 3.5-ton unit for a 2,500-square-foot home averages $3,900 to $6,400, and a large 5-ton unit that heats up to 3,500 square feet can cost $4,500 to $8,800, not counting heat pump installation costs.

Visual 2 - HomeAdvisor - Heat Pump Capacity Cost - Cost per Capacity - November 2023
Photo: bobvila.com

Heat Pump Type

The type of unit, meaning whether it’s designed to pull heat from the air, water, or soil (or whether it’s designed to run on solar energy) also factors in. A geothermal ground-source heat pump can run as little as $6,000 (installation included), while a solar heat pump can run as much as $39,000, primarily due to the expense of the solar panels.

Heat Pump Efficiency

A Seasonal Energy Efficiency Rating (SEER) is how heat pump efficiency is measured. The higher the SEER rating a heat pump has, the more efficient (and typically more expensive) it is. Heat pumps are very efficient in warmer regions where the unit’s refrigerant lines can draw from abundant ambient heat. This means heat pumps are most efficient in southern states in the U.S. and also in Hawaii. While they become gradually less efficient as regions become cooler, they can be supplemented with an electric or gas furnace.

Visual 3 - HomeAdvisor - Heat Pump Cost - Cost per Service - November 2023
Photo: bobvila.com

Labor and Permits

The labor expense is a substantial part of the cost to install a heat pump—each worker is charged at a rate of between $75 to $125 per hour. If a permit is needed, homeowners can expect to pay around $50 to $300.

Geographic Location

The climate is also a factor in determining the price of a home heat pump—in warmer locations, such as Miami, Florida, having a heat pump installed costs an average of $2,200 to $3,700 because the temperatures are mild and a smaller air-to-air unit is all that’s usually needed. In contrast, having a heat pump installed in a home in Denver, Colorado, could cost as much as $10,000 because refrigerant lines may need to be buried, and a larger unit may be called for. It’s also worth noting that SEER requirements vary by state, with residents of southern states typically requiring units with a SEER rating of at least 15 and those in northern states benefiting from units with a rating of 14 or higher.

City Heat Pump Cost (Materials and Labor)
Chicago, Illinois$4,500 to $5,500
Denver, Colorado$2,800 to $10,000
Houston, Texas$3,800 to $7,100
Miami, Florida$2,200 to $3,700
Minneapolis, Minnesota$3,200 to $5,400
New York City, New York$3,300 to $7,300
St. Louis, Missouri$4,200 to $8,000

Additional Costs and Considerations

The materials and quality in a heat pump vary from average to high-end, and homeowners can expect to pay more for a unit from a nationally known manufacturer. Some additional costs may apply; for example, it may be necessary to purchase a special heat pump thermostat for $140 to $350. Whether or not ducts need to be installed is another cost consideration.

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Tax Credits

Homeowners whose geothermal heat pump installation falls between 2021 and 2033 are eligible to receive a 30 percent federal tax credit. The same credit percentage is available for air source units installed between 2023 and 2032. State and local heat pump tax credits may also be available, and a heat pump installer is likely to know if any are available locally.

Heat Pump Brand

In addition to the size of the unit and efficiency level, the brand name can make a difference in heat pump prices. While a typical air-source heat pump starts at around $1,000, some well-known, high-end brands will run as high as $11,200. Before going with a lower-end brand, it’s worth checking out the warranty the various units offer. A well-known brand may be more likely to back up the quality of its product to preserve its good reputation.

Heat Pump Brand Average Cost (Unit Only)
Amana$1,800 to $2,800
American Standard$2,000 to $3,200
Bosch$1,300 to $8,200
Bryant$1,600 to $2,700
Carrier $2,300 to $3,900
Coleman$1,300 to $3,200
Daikin$1,000 to $10,000
DuctlessAire$1,000 to $1,800
Goodman$1,500 to $3,900
Lennox$2,700 to $4,500
Mitsubishi$1,700 to $11,200
Panasonic$1,300 to $2,700
Rheem$1,600 to $3,200
Ruud$1,600 to $3,200
Trane$2,600 to $4,200
York$1,300 to $2,300

Duct System

A heat pump can replace a home’s existing HVAC system and—in some cases—make use of the existing ductwork. If this isn’t feasible due to the ducting configuration or the ducts not being in good shape, homeowners can opt for a mini-split system that doesn’t require ducting. During heat pump replacement, having new ducts installed could add $3,000 to $7,500, depending on the project’s complexity.

Maintenance and Repairs

It’s a good idea to have a heat pump inspected and serviced annually, and this service will cost $50 to $180 per visit. If the heat pump needs to be repaired, costs are about $150 to $600 on average. Failing to maintain a heat pump or other type of HVAC system is one of the biggest home heating mistakes that can spike energy bills.

Heat Pump vs. Furnace

For those who are torn between a heat pump vs. a furnace, it’s worth noting that heat pumps typically have a higher initial cost. A new heat pump will run an average of $5,947, and the cost to install a new furnace typically runs from $2,800 to $6,800. Still, homeowners stand to save a substantial amount on utility bills with a heat pump. Homeowners will want to keep in mind that a furnace only heats the air, while a heat pump not only heats but also cools the air, so it removes the need to buy a separate AC unit.

Heat Pump Costs
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Heat Pump Cost by Type of System

All heat pumps have one thing in common: They all draw heat from their surroundings and use it to create either warm or cool air. But that’s where the similarities end. The best heat pumps can be installed in the ground, underwater, or sit out in the open. Some require electricity from a home’s wiring to power an air handler, while others depend on energy from solar power. The best one for an individual household will depend on a homeowner’s needs and budget.

Heat Pump TypeAverage Cost (Materials and Labor)
Air source$4,500 to $8,000
Geothermal$6,000 to $20,000
Hybrid$2,500 to $10,000
Mini-split$1,300 to $8,000
Solar$18,000 to $39,000

Air Source

Slightly less expensive than geothermal, an air-source heat pump costs $4,500 to $8,000. This type of heat pump costs less because it’s cheaper to install. With an air-to-air unit, there’s no need to excavate to bury refrigerant lines.

Geothermal 

Designed with refrigerant lines buried in the ground or located beneath the water in a pond, geothermal heat pump costs (including heat pump installation costs) range from $6,000 to $20,000 on average.

Hybrid 

A heat pump can be used to supplement a separate electric furnace, which allows the homeowner to run the heat pump when the temperatures are suitable, yet still have the comfort of a furnace when it gets colder. Hybrid heat pumps can run $2,500 to $10,000.

Mini-Split

A mini-split heat pump is just as efficient as a central system, and it often includes multiple air handlers that serve different zones of the home. The difference is that the air does not run through ducting. Expect to pay between $1,300 to $8,000 to install a mini-split system, depending on how many zones are necessary.

Solar

This type of heat pump requires the installation of solar panels that power the unit’s compressor. Some solar heat pumps do double duty and heat fluid in the lines to supplement the unit’s efficiency. Solar heat pumps are pricier than other types and range in cost from $18,000 to $39,000. Much of that cost is due to the price of the solar panels.

Benefits of Choosing a Heat Pump

As the price of electricity keeps going up, some homeowners decide to put in a heat pump to save on energy costs. Still, there are other benefits, including potential tax credits and conserving essential floor space in the home.

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Improved Energy Efficiency 

Homeowners will save more on utility bills if they live in a moderate climate—in fact, they can save up to 50 percent, making heat pumps an eco-friendly way to reduce a carbon footprint. In the past, heat pumps were less effective in colder climates. However, “You can run these heat pumps in some of the coldest climates. Dual fuel systems make it so that heat pumps can make sense in pretty much any area where you might have a couple of days here and there where it’s the coldest,” says Gehring. “[When you think about] our parents’ and grandparents’ heat pump of the past, we’ve improved from there, and they can really make sense in most regions at this point.”

Better Use of Space

The cost of building a house today is much higher than just a decade ago, so homeowners want to put every square foot to good use. A 3-foot by 3-foot furnace will take up 9 square feet of real estate in the home, and it could potentially stand up to 6 feet high. Replacing a furnace with a heat pump frees up space for a utility closet, storage, or other suitable uses. Heat pump lines run outside the house, and their air handlers install out of the way on the upper portion of exterior walls.

Environment Benefits

When less energy is used to heat and cool a home, there’s less demand on the electric grid, making heat pumps an environmentally friendly option. Heat pumps come with a seasonal energy efficiency rating (SEER), and the higher the rating, the more energy-efficient the unit. Higher ratings also come with bigger price tags. A 14 to 15 SEER unit runs about $1,600 to $5,900, not counting installation, while a high-efficiency unit over 20 SEER runs $3,600 to $9,500.

Improved Air Quality and Decreased Humidity

In addition to temperature control, heat pumps are great for controlling air quality and humidity levels. They have powerful filters that remove allergens such as dust and pollen from the air. They can also regulate a home’s humidity levels, which is vital to residents’ health and comfort.

Versatility

Heat pumps both cool and heat a home. During the winter, they draw heat from the soil, water, or air and use it to warm the home’s interior. In the summer, they draw warmth from the heated air inside the house, and via the use of refrigerant lines, they produce cooler air. In summer, a heat pump works similarly to a traditional air conditioner. For those comparing the heat pump vs. AC costs, it’s worth noting that while heat pumps are pricier, they eliminate the need to purchase a furnace.

Improved Safety

A heat pump that runs on electricity is safer than a gas-powered furnace because there’s no fuel combustion involved and no potentially toxic fumes. In addition, a mini-ductless heat pump, which costs $1,300 to $8,000, is less likely to produce airborne allergens, so residents who are sensitive to dust and other allergens will breathe more freely.

Heat Pump Costs
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Heat Pump Installation: DIY vs. Hiring a Professional 

The labor costs to have a heat pump installed are substantial, and they often exceed the cost of purchasing the unit. That said, installing a heat pump isn’t something even enthusiastic DIYers are set up for.

Gehring advises that this is a job that’s best left to professionals who have a license to work with the refrigerants required and says that because there’s often electrical work to be done, “this is definitely something that makes sense to have a professional come in and do.” In addition, combo units that feature dual-fuel gas lines must usually be connected by a licensed plumber to ensure no gas leaks.

In general, due to the complexity, it’s a good idea to have a heat pump installer or one of the best HVAC companies (such as Aire Serv) take care of this project. “One of the benefits … with a professional is that you get warranty coverage on it, and a professional can make sure that airflow and other things that are hugely important to the overall function of the unit are set up correctly on that piece of equipment so that the homeowner is getting the best efficiency and comfort out of it as possible,” Gehring adds.

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How to Save Money on Heat Pump Cost

Installing a heat pump can be a pricey prospect, typically ranging from $4,206 to $7,688. It’s only natural to want to save some money on the cost of heat pump installation and still receive the benefits of this energy-efficient way to heat and cool a home. The following tips can help homeowners save money on the cost of a heat pump system.

  • Opt for a lower SEER rating. A 20 SEER-rated heat pump will cost $3,600 to $9,500. In comparison, a 14 SEER-rated unit will cost $1,600 to $4,900. Homeowners can save by opting for a unit with a lower SEER rating.
  • Choose an air-source heat pump in warmer climates. A ground-source unit can cost up to $20,000 to have installed, while an air-source model usually won’t exceed $8,000, including installation fees.
  • Select a less expensive brand. Homeowners who live in a warm region may not need to spend the extra money to get a high-end heat pump. Installation charges likely will not change.
  • Shop around. Homeowners can get multiple quotes to ensure they’re getting the best deal.
  • Wait for the off-season. If possible, homeowners can get the heat pump system installed in the off-season. They may save on some price surging and installation costs. The off-season will vary by region, but it’s likely in milder seasons like fall and spring.
  • Consider financing options. If paying for a heat pump out of pocket isn’t feasible, it may be worth getting a loan. If a homeowner has a series of projects to complete, it may make sense to take out one of the best home improvement loans. It’s also worth considering one of the best home equity loans from a provider such as U.S. Bank or Flagstar Bank.

Questions to Ask About Heat Pump Installation

It’s a good idea to get more than one quote when looking to have a heat pump installed, but there are a few other essential questions to consider asking the installer.

  • How long have you been in business?
  • Can I have a bid instead of an estimate?
  • Will you itemize your bid?
  • Do you offer financing?
  • How long will the installation take?
  • How many workers will this job take?
  • Are you licensed and insured? (Some states require this, while others will not.)
  • Do you have references?
  • How often do I need to have this unit serviced?
  • What are annual operating costs on this unit?
  • Will you let me know if any repairs or changes to the existing ductwork are necessary?
  • What is the average lifespan of the heat pump you’ve suggested?
  • Do you warranty your work?

FAQs

Heat pump technology has been around for a few decades, but because heat pumps are so much more efficient than a furnace in mild climates, they’re steadily gaining in popularity. For those who are considering having a heat pump installed, a few questions are likely.

Q. How much money can I save with a heat pump?

Those weighing heat pump vs. furnace costs will want to note that, despite the higher initial cost of a heat pump, they could save up to 50 percent on their utility bills by switching if they live in an area with high electric rates and they’re currently running an electric furnace.

Q. How often should I replace my heat pump?

The average lifespan of a heat pump is between 10 and 15 years. Many homeowners find heat pump replacement costs offset utility costs.

Q. What size heat pump do I need for a 1,500-square-foot house?

Depending on the climate, the number of windows in the house, and the amount of insulation, you may need a 2.5-ton or 3-ton heat pump.

Sources: HomeAdvisor, Angi, HomeGuide