How Much Does a Heat Pump Cost?

HVAC Heat Pump Cost Breakdown

According to Statista, heat pumps accounted for over half of all heating system sales in both France and the United States in 2022.

This might make you wonder, “How much does it cost to install a heat pump?”.

Understanding the costs involved in installing an HVAC heat pump is important for budgeting right. Let’s take a look at each factor one by one below:

Heat Pump Size

Larger heat pumps, typically available in sizes ranging from 2 to 5 tons, are more expensive due to their higher capacity to heat and cool larger spaces.

The cost increases with size because of the added materials, complexity, and installation requirements. You should keep this in mind when estimating the heat pump costs.

Choosing the right size is crucial. An oversized unit may cycle on and off too frequently, reducing its lifespan and leading to higher maintenance costs.

Conversely, an undersized unit will run continuously to maintain the desired temperature, which increases energy costs and also shortens its lifespan.

Smaller units usually cost between $3,800 and $6,600, while larger ones can reach $9,000 or more, depending on their efficiency rating. Below is a guide for selecting the right heat pump size based on the square footage of your space:

• House Size (in sq ft)Size (in tons)
• 5001
• 1,0002
• 1,5003
• 2,0004
• 2,5005
• 3,0006

Type of Heat Pump

The type of heat pump you choose significantly impacts the overall cost of the unit and its installation. Here’s a breakdown:

• Heat Pump TypeAverage Unit Cost
• Air-source$2,000 - $7,000
• Geothermal$2,800 - $9,000
• Solar$2,200 - $9,500
• Hybrid$2,000 - $8,200
• Ductless mini-split$1,000 - $4,000

Air-Source Heat Pumps

Air-source heat pumps are the most popular option, with sales in Europe surging in 2021 and 2022.

As one of the most budget-friendly options, the air-source heat pump cost usually ranges between $2,000 and $7,000.

These pumps work by moving heat between your home’s indoor air and the outside air, though they tend to be less efficient in very cold climates.

Ductless Mini-Split Heat Pumps

Similar to air-source systems but designed for homes without ductwork, these range from $1,000 to $4,000.

They are cost-effective for smaller spaces but can become expensive if multiple indoor units are needed.

Ground-Source (Geothermal) Heat Pumps

These are much more expensive, with costs ranging from $2,800 to $9,000 due to the complex installation process that involves burying pipes underground.

However, their high efficiency can result in substantial energy savings over time, making them a worthwhile investment despite the initial cost.

Solar Heat Pumps

Solar heat pumps are the most expensive, typically costing between $2,200 and $9,500.

They use solar energy, making them environmentally friendly, but the high installation costs can be a barrier for many homeowners.

Hybrid (Dual-Fuel) Heat Pumps

Hybrid heat pumps combine an electric heat pump with a gas or oil furnace for additional efficiency in cold climates, with costs ranging from $2,000 to $8,200.

Brands

The cost of a heat pump is also influenced by its brand, with premium options like Bosch tending to be pricier because of its higher reliability, advanced features, and extended warranties.

However, the better performance and durability these brands offer can make the higher upfront cost worthwhile.

• BrandHeat Pump Unit Cost
• Panasonic$1,300 - $3,000
• Rheem/Ruud$1,600 - $3,400
• Carrier$2,300 - $4,000
• Bosch$1,200 - $8,200
• American Standard$1,900 - $3,200

Location and Climate

In colder regions, heat pumps need to be more powerful and efficient to handle extreme temperatures, which can drive up both equipment and installation costs.

For example, states like Massachusetts and Colorado, which experience harsh winters, often face higher heat pump installation costs than warmer states like Florida, where less robust systems are adequate.

Additionally, the age and condition of homes can impact installation costs.

In areas with older homes or those not equipped for modern HVAC systems, costs may be higher due to the need for electrical upgrades or new ductwork.

Efficiency Rating

The efficiency of a heat pump greatly impacts both its running costs and the initial installation expense.

These systems are rated using the Seasonal Energy Efficiency Ratio (SEER) for cooling and the Heating Seasonal Performance Factor (HSPF) for heating.

Higher SEER and HSPF ratings indicate a more efficient heat pump, meaning it requires less electricity to achieve the same heating or cooling output compared to less efficient models.

High-efficiency heat pumps, typically with 19+ SEER and 10+ HSPF, tend to have installation costs ranging from $7,000 to $20,000, depending on the specific type of pump.

On the other hand, standard heat pumps are less expensive to install, with costs generally falling between $3,500 and $7,000.

You should choose the right efficiency level based on your climate and how much you expect to use the heat pump.

Labor

The overall labor costs for installing a heat pump can be influenced by several factors, including the complexity of the installation, local labor rates, and the need for additional work like ductwork modifications or electrical upgrades.

Labor typically accounts for about 30-40% of the total project budget.

Labor costs can vary significantly, ranging from $500 to $20,000 for a full installation. The hourly rate for labor usually falls between $75 and $150, depending on the region and the specific requirements of the installation.

More complex projects, such as those in older homes or those needing extensive modifications, will naturally incur higher labor costs.

Additionally, labor expenses can fluctuate with seasonal demand, during peak times like summer and winter, labor costs may rise due to higher demand for HVAC services.

Additional Heat Pump Costs to Consider

When budgeting for a heat pump, there are a few additional factors to consider:

• 

  Permits

  
  

  Most municipalities require building permits for heat pump installations, with fees generally ranging from $100 to $300, depending on the location and project specifics.

  Additional permits for things like excavation or proximity to pipelines can raise these costs.

  The complexity of the installation, such as adding new ductwork or upgrading the electrical system, can also impact permit fees.

• 

  Ductwork

  
  

  If your home already has ductwork in good condition, the cost of installing a heat pump may be on the lower end.

  However, if new ductwork is needed or existing ducts require significant modifications, the price can go up considerably.

  Installing new ductwork can add between $1,000 and $5,000 to your project cost. Factors like the complexity of the installation, the size of your home, and how difficult it is to access certain areas can also affect these costs.

  Some homeowners might choose ductless systems to avoid these ductwork expenses, but these systems come with their own costs, especially if you need to cover multiple zones or rooms.

• 

  Heat Pump Removal

  
  

  Removing an old heat pump before installing a new one can add to the overall cost of your project.

  This process involves labor, disconnecting electrical and refrigerant lines, and properly disposing of the old unit. An HVAC technician may charge between $200 and $400 per hour for this work.

  If the removal is particularly complex or involves hazardous materials, the costs could increase even more.

What Are the Pros and Cons of a Heat Pump?

Heat pumps offer several advantages and disadvantages, making them suitable for some homes and less ideal for others, depending on various factors.

TABS

Heat Pump vs. Furnace Cost

A heat pump transfers heat from outside to inside (and vice versa) using a refrigeration cycle, while a furnace generates heat by burning fuel or using electricity to warm your home.

When comparing the cost of a heat pump versus a furnace, there are several factors to consider:

• 

  Upfront Costs

  
  

  Heat pumps generally have a higher initial cost, ranging from $4,900 to $19,600, depending on the type (air-source, ductless mini-split, geothermal) and the complexity of the installation.

  On the other hand, furnaces usually have lower upfront costs, with prices ranging from $1,700 to $13,200, depending on whether it's a gas, electric, or propane furnace.

• 

  Operating Costs

  
  

  Heat pumps are more energy-efficient, especially in milder climates, leading to lower operating costs. For instance, the cost to run a heat pump for a winter season is approximately $500.

  Furnaces generally have higher operating costs. A gas furnace might cost around $850 for the same period, with electric and propane furnaces being even more expensive to run.

• 

  Efficiency

  
  

  Heat pumps are generally more efficient than furnaces because they transfer heat instead of generating it, making them particularly effective in moderate climates. However, in extremely cold temperatures, their efficiency decreases, often requiring a backup system like a gas furnace.

  On the other hand, furnaces are better suited for very cold climates but typically use more energy, resulting in higher ongoing costs.

Should You Install a Heat Pump Yourself or Hire a Pro?

Since labor can make up about 30 to 40% of the total project cost, you might be tempted to install a heat pump yourself to save money. While DIYing could cut costs significantly, we don’t recommend it due to the complexity and risks involved.

Installing a heat pump requires precise handling, especially when it comes to refrigerants and electrical connections. Mistakes in these areas can lead to serious safety hazards.

On top of that, improper installation might void warranties and could cause higher energy bills, frequent repairs, or even dangerous situations like gas leaks or fires.

By hiring a professional, you ensure that the system is installed correctly, complies with local building codes, and operates efficiently. Pros bring the right tools and expertise, often leading to a more reliable and long-lasting system.

While it might be more expensive upfront, investing in professional installation often pays off in the long run with better performance and enhanced safety.

When choosing a professional, you should get quotes from multiple companies, check their online reviews, and address any questions you have before moving forward.

You can use a tool like HomeBuddy to find a local expert for heat pump installation, get a free quote, and have all your questions answered.

How to Save on Heat Pump Installation Costs?

To save on heat pump installation costs, you should implement the following strategies:

• 

  Choose the Right Type of Heat Pump

  Air-source heat pumps are typically cheaper than geothermal or solar options. If you live in a moderate climate, they can be a budget-friendly choice.

• 

  Opt for a Lower SEER Rating

  Higher SEER (Seasonal Energy Efficiency Ratio) ratings provide better efficiency but often come with a higher initial cost. Choosing a heat pump with a SEER rating suited to your climate can help you save money.

• 

  Shop Around for Quotes

  Getting multiple quotes from various installers can help you compare and secure the best deal. Prices can vary widely depending on the contractor and location, so it’s worth the time to compare.

• 

  Install During the Off-Season

  HVAC services tend to be in lower demand during the spring and fall. Scheduling your installation during these times might save you money, as some contractors offer discounts during off-peak seasons.

• 

  Take Advantage of Rebates and Tax Credits

  Federal tax credits, such as those from the Inflation Reduction Act, can offset up to 30% of the installation costs for qualifying energy-efficient heat pumps, with a maximum credit of $2,000. Additionally, some states offer rebates, so check local incentives to further reduce costs.

• 

  Consider a Hybrid System

  For homes in colder climates, a dual-fuel system that pairs a heat pump with a traditional furnace can be more cost-effective. These systems can range from $2,500 to $6,000 when connected to an existing furnace, providing savings on installation and operating costs.

Conclusion

Heat pumps typically range in cost from $4,900 to $19,600, with the average price around $9,800. The final cost depends on factors such as the size and type of heat pump, brand, efficiency rating, permits, and labor.

While installing a heat pump yourself can save money, it’s best to hire a professional to ensure the job is done right, avoiding stress and potential repair costs. A tool like HomeBuddy can help you find a local pro for heat pump installation quickly and easily.

Frequently Asked Questions