How Much Does a Heat Pump Cost?

In moderate climates, heat pumps can be more energy-efficient than furnaces. They typically range in price from $4,133 to $7,294, with a national average of about $5,696.

By Glenda Taylor | Updated Oct 14, 2021 11:50 AM

Heat Pump Costs

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  • Typical Range: $4,133 to $7,294
  • National Average: $5,696

Heat pumps are less expensive to operate than furnaces in regions where winter temps don’t get bitterly cold. The price to have one installed typically ranges from around $4,133 to $7,294, with a national average being around $5,696. 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. At the low end, heat pump costs could run as little as $1,500, and at the high end, as much as $10,044. Ahead, learn more about this energy-saving way to keep your home comfortable, and find out how to locate a heat pump installer if you decide a heat pump is right for you.

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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. 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.

Factors in Calculating Heat Pump Cost  

While the national average for a heat pump runs $5,696, the final heat pump cost varies widely based on the size of the unit, the type of heat pump purchased, and its level of efficiency. Most homeowners can expect to pay somewhere between $4,133 and $7,294.

A midrange heat pump—not counting installation costs—runs from $100 to $2,800. The heftiest fees come in labor necessary to install the various types of heat pumps. Some heat pumps pull heat from the air, while others are buried and draw heat from the soil. Still others are installed underwater in a pond.

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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: a large home will need a larger unit, and a small house can get by with a smaller unit. You might hear this referred to as “tonnage” in discussions about heat pumps. This 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, a midsize 3.5-ton unit averages $3,900 to $6,400, and a large 5-ton unit can cost $4,500 to $8,800, not counting heat pump installation costs.

Heat Pump Costs 1

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Unit

The heat pump unit will vary in cost depending on its efficiency level and brand. When choosing a heat pump, compare each unit’s seasonal energy efficiency rating (SEER), indicating its efficiency level and its projected useful life. Small units may run as little as $1,000, while higher-end units can run as much as $11,200—and that’s before installation.

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

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.

Equipment, Materials, Permits, and Labor

When an installer provides a bid to install a heat pump, the cost of the excavation equipment used, all the materials, and the labor to install the unit are included. The labor expense is a substantial part of the cost to install a heat pump—each worker is charged out at a rate of between $75 to $125 per hour.

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Home Size

Like a furnace or AC unit, a heat pump has to be adequately sized to the house. The larger the living space in a home, the larger a heat pump must be to warm and cool it. Optimally, the unit should be large enough to heat the house when maximum load is necessary, designated as the coldest time of the winter. For example, in a home with less than 1,100 square feet of living space, a 1.5-ton heat pump might suffice, but in a home with 3,000 square feet, a 5-ton unit may be necessary.

Location and Climate

The climate is also a factor in determining the price of a 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.

Additional Costs and Considerations

The materials and quality in a heat pump vary from average to high-end, and you’ll pay more for a unit that’s well made from a nationally known manufacturer. Whether or not ducts need to be installed is another cost consideration.

Heat Pump Costs

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Brand Quality

In addition to the size of the unit and efficiency level, the brand name can make a difference in the cost. While a typical air-source heat pump runs an average of $4,000 to $8,000 to install,  a well-known, high-end brand will run an average of $6,000 to $12,000. Before going with a lower-end brand, check 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.

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 $5,000, depending on the project’s complexity.

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Heat Pump Cost Types

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. 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 you will depend on your individual needs and budget. In general, expect to pay from $4,133 to $7,294 for a heat pump.

Geothermal 

Designed with refrigerant lines buried in the ground or located beneath the water in a pond, a geothermal heat pump (including heat pump installation cost) ranges from $6,000 to $20,000 on average. However, some may cost as much as $30,000, depending on the extent of the excavation required.

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 $2,000 to $14,500 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.

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Air-to-Air

Slightly less expensive than geothermal, an air-source heat pump costs $4,500 to $8,000, but high-end units can cost more than $10,000, including installation fees. 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.

Dual Fuel 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. Adding a heat pump to an existing furnace can run $2,500 to $6,000, while installing a new dual-fuel combo system can run $4,500 to $10,000.

Gas System

Heat pumps paired with gas-powered motors rather than electric-powered models are more likely to be found in commercial buildings or off-grid installations. The gas motor can be connected to a municipal gas line or converted to run off liquid propane (LP). These units are also considered dual-fuel and run about $2,500 to $10,000.

Cold Climate

In regions where temperatures regularly dip below freezing, a dual-fuel hybrid heat pump system is the best option, paired with an electric- or gas-powered furnace. The heat pump will warm the house during cool weather, and when the temps drop, the furnace can be used. Energy savings will not be as significant as they would be in a more moderate climate.

Heat Pump vs. Furnace

A new heat pump will run an average of $4,000 to $8,000—more than it costs to install a new furnace, which typically runs from $2,000 to $5,400. Still, homeowners stand to save a substantial amount on utility bills with a heat pump. 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 4

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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.

Tax Credits

Homeowners who installed geothermal heat pumps before the end of 2019 can receive a 30 percent federal tax credit. For units installed in 2020, a 26 percent credit is available. Homeowners who install a geothermal heat pump before the end of 2021 can still receive a 22 percent credit, but all federal tax credits expire at the end of 2021. State and local credits may also be available, and a heat pump installer is likely to know if any are available in your community.

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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. Unfortunately, heat pumps are not as effective in colder climates, so their use is limited where temperatures frequently drop below freezing.

Climate 

Homeowners in mild climates might not want to spend the money to have a furnace installed. Still, they may experience times when a little extra indoor heat would feel good during the winter months. This is the optimal climate for a heat pump because it can serve as an air conditioner during hot summer months and then switch over and heat the air in the home during the winter without installing a separate furnace. The average national cost to have a heat pump installed is around $5,696.

Space Saving

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.

Environmentally Friendly

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 13 to 14 SEER unit runs about $1,000 to $2,100, not counting installation, while a high-efficiency unit over 19 SEER runs $3,100 to $4,000.

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.

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Return on Investment

Anytime you improve your home, there’s a chance you could see a return on your investment (ROI) when you go to sell. By installing a heat pump, you could potentially see a 70 percent return on the money you spend. Of course, this will vary depending on the type of heat pump you have installed and how old it is when you sell the home.

Cleanliness and Maintenance

Heat pumps produce cleaner and healthier air than forced-air furnaces do. This is because a furnace dries out the air, increasing the risk of airborne dust particles. Because they’re multifaceted, however, heat pumps may need more frequent maintenance. Expected repair costs run an average of $150 to $600.

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 between $2,000 to $14,500, is less likely to produce airborne allergens, so residents who are sensitive to dust and other allergens will breathe more freely.

Lifespan

For some homeowners, a potential downside to installing a heat pump is that it lasts about half the time a typical furnace lasts. A heat pump’s lifespan is about 10 to 15 years, while a furnace’s lifespan is closer to 20 to 30 years. However, in areas where electric rates are skyrocketing, homeowners may still save money in the long run (in utilities) by going with a heat pump.

Heat Pump Cost: DIY Installation 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. Most companies will charge between $75 to $125 per hour per worker, so DIY-ing the project could result in considerable savings. That said, installing a heat pump isn’t something even enthusiastic DIYers are set up for.

One of the most common heat pumps, a geothermal ground-source unit, requires extensive excavation to bury the refrigerant lines. If something goes wrong during the installation, there’s no one to warranty the workmanship. In addition, combo units that feature dual-fuel gas lines must usually be connected by a licensed plumber to ensure no gas leaks.

Heat Pump Costs 2

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In general, due to the complexity, installing a heat pump isn’t a DIY project. However, it might be a different story if a homeowner is very knowledgeable in how heat pumps work, electrical wiring, and installing the lines. Anything that goes wrong, however, could result in costly repairs.

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How to Save Money on a Heat Pump 

No bones about it—installing a heat pump can be a pricey prospect, typically ranging from $4,133 to $7,294. 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 you save money on a heat pump.

  • Opt for a lower SEER rating. A 15 to 16 SEER-rated heat pump will cost $5,200 to $6,300 to have installed. In comparison, by having a 13 to 14 SEER-rated unit installed, you would pay $4,100 to $5,400.
  • 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. If you live in a warm region, you may not need to spend the extra money to get a high-end heat pump. Installation charges likely will not change.
    Get multiple quotes to ensure you’re getting the best deal.
  • If you can, get the heat pump system installed in the off-season. You 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.

Questions to Ask Your Heat Pump Installer

You already know to get more than one quote when you’re looking to have a heat pump installed, but you may not know a few other essential questions you should ask the installer.

Heat Pump Costs 5

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  • Can I have a bid instead of an estimate? An estimate is only a ballpark figure the installer thinks will be in the price range, but it could increase. By getting a firm bid, you’ll know exactly what you’ll pay.
  • Will you itemize your bid? It isn’t easy to know if you’re getting the best deal unless you can compare the bids apples-to-apples. An itemized bid will list everything, including the tonnage, the brand of heat pump, and its SEER so you can accurately compare the bids.
  • Do you offer financing? If the cost of the installation is above your budget, some installers will offer a payment plan.
  • 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? 
  • 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?
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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? 

If you live in an area with high electric rates and you’re currently running an electric furnace, you could save up to 50 percent on your utility bills by switching to a heat pump.

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 is the average cost of heat pump installation? 

The national average cost of heat pump installation is $5,696, and the typical range is $4,133 to $7,294.

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

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