Cost of a Heat Pump Installation
The cost of a new heat pump installation can range from $5,000 to $15,000. This includes all equipment, labor charges, permits and other fees.
The wide range of potential costs for a heat pump replacement is due to several factors, including size of your home, region in which you live, efficiency of the heat pump, sophistication of the heat pump’s staging, all parts and labor charges.
This article looks at this entire range and separates the ranges into categories based on equipment type and budget.
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Heat Pump Cost Factors
If you glanced at the price above, you might be surprised if you’ve never had to replace a major piece of HVAC equipment.
HVAC equipment installations can be on par with other major house or life upgrades, such as new windows, roofing, or even a new car!
However, it makes sense when you realize the impact it has on your life. A good heat pump should last 10-15 years (or longer, occasionally), and you’re in your home a lot. Further, a great HVAC system can increase the value of your home if you choose to sell it!
Besides those other major improvements we mentioned, what else do you own that contributes to your comfort and health nearly every day of your life for more than a decade? The list is pretty short.
Additionally, heat pumps contribute to both heating and cooling, so they’re the only major piece of HVAC equipment (outside of ductwork, thermostat, etc.) that can be working for you all year long!
So it’s worth getting it right, which is what we’re here for. CABS Heating and Air Conditioning has helped thousands of people stay comfortable in their homes with heat pump installations, replacements, and even switching homes from gas to electric to take advantage of local incentives for heat pump installs.
Below are factors that affect the cost of heat pumps, and what options you have for each. By the end, you’ll have a great understanding of what to look for in a heat pump, what yours may cost, and what equipment options are the right fit for your home.
Heat Pump Capacity
The shorthand version of this is us telling you that the larger home you have, the more capacity you’ll need in your HVAC system, including the heat pump.
It’s not just home size, though. A lot of other variables can affect how much energy your home needs to properly heat and cool it. A trained HVAC technician will be able to provide a detailed calculation that breaks down your energy needs. This is called a Manual J Load Calculation.
This is one of the biggest factors that affects the pricing of your heat pump system. The largest homes even need two separate systems! While this is rare, it shows that the capacity of your system needs to scale to your needs, and this in turn scales the pricing.
Heat Pump Staging
If heat pump capacity is the biggest cost factor, the other big one is equipment staging.
We’re written an article on air conditioner staging that goes into more detail, and the same is true of all major HVAC equipment.
Basically, staging refers to how many speeds (stages) your equipment can run at. Single-stage equipment has only one speed. Two-stage, two speeds. Variable-speed can be anywhere from three to hundreds of stages, depending on the complexity of the equipment.
The more stages you have, the more efficient your heating and cooling will be. You’ll also be a lot more comfortable in your home with additional stages, particularly in places that are difficult to keep cool in the summer and warm in the winter, such as master bedrooms, second floor corner rooms, and finished attics.
These variable-speed systems are top-of-the-line in modern HVAC. They come with a higher price, but they offer energy savings and increased comfort for years to come.
Equipment Matching
Heat pumps are electric systems, meaning that you have to be set up for electricity as your fuel source. If you previously had a gas-powered system, or you’re running a dual-fuel (gas + electric) system, problems can occur with equipment compatibility.
First off, the electrical wiring needs to be in place to power and connect all equipment, including connecting to your thermostat. This wiring can be more robust for a heat pump than a traditional air conditioner, so a licensed electrician may need to do the work (many HVAC companies, such as CABS, are licensed to do this).
Next, we talked about staging above, and if you have a two-stage or variable-speed heat pump, this requires compatible parts and equipment throughout much of your HVAC system. The blower fan, for instance, moves air for both heating and cooling purposes, and needs to be able to adjust for a variable-speed system.
Compatible thermostats are necessary for many sophisticated systems as well. Your HVAC contractor can walk you through these options. Many homes are already set up properly to house a new heat pump. Others may require some unique installation processes, though.
Ductwork and Line Set Installation
Particularly if you have upgraded the capacity of your heat pump, your ductwork may need adjustments to account for the increase in airflow.
If this isn’t done, your bright and shiny new system won’t actually be able to operate at its peak efficiency, and you’ll be throwing money away.
Additionally, efficiency losses due to poor ductwork insulation or leaks can affect your bottom line. It’s often more cost-effective to have this fixed as part of your installation, rather than dealing with it at a future time.
Line sets are part of a standard installation and generally won’t add anything to the cost that isn’t already covered in the price ranges listed at the top of this article.
The only exception to this is when you need to move your system’s location, which can require an extension of the line set. This line set includes electrical wiring, refrigerant line, and insulation or other protection for the entire line, so a proper casing for it is important to ensure your system’s longevity.
Electrical Work
We touched on this earlier, but more in terms of adding some connective wiring. What about when you have to switch your entire system over to electric?
This generally requires electrical work to create new power outlets that are properly surge-protected. It also requires communication lines to be run between HVAC subsystems that will need to communicate with one another (such as the thermostat, blower motor, and outdoor heat pump unit).
The upside here is that there are often incentives to switch to electric HVAC!
For example, Sacramento often has eco-friendly tax rebates and discounts for those who switch to a high-efficiency heat pump system.
This can mitigate the costs involved with installs for many homeowners, and make it more attractive to upgrade to a high-end, high efficiency system.
Parts & Labor
Labor costs are included in the ranges quoted in this article, but it’s worth noting that labor costs can account for as much as half of your total cost.
The equipment itself also has to be manufactured and stored by a contractor, and while some logistics efficiencies can be passed along in cost savings to the homeowner, the cost of equipment remains as high as ever.
Major parts that will be included in typical installs include the indoor and outdoor heat pump units, electrical wiring that connects all equipment, a drain line, line set (often with a protective casing around it), and condensate drain line.
Efficiency Ratings for Heat Pumps
All HVAC equipment has an efficiency rating, but heat pumps have two: one for heating and one for cooling.
Cooling is measured in Seasonal Energy Efficiency Ratio, or SEER. SEER ratings for residential heat pumps generally run from about 14 to 21.
Heating is measured in Heating Seasonal Performance Factor, or HSPF. HSPF ratings for residential heat pumps generally run from 7.5 to 10. The most efficient air source heat pumps can reach up to around 13 HSPF currently.
This can relate to cost savings and also environmental friendliness. If these are important factors to you, finding a heat pump with a high efficiency rating is recommended.
Price Ranges for Heat Pump Replacement
Below we’ve broken down cost ranges based on staging. Beyond that, where you fall in the price range will depend on the size of your home and energy requirements and any additional installation considerations mentioned above.
- Single-Stage heat pump: $5,000 – $9,000
- Two-Stage heat pump: $6,000 – $11,000
- Variable-Speed heat pump: $9,000 – $15,000
The other big cost factor is where you live. Cost of living dictates price increases and reductions across all home services. If you’re in a large urban area, for example, the lower ends of these price ranges likely won’t be available where you live.
Conversely, areas with lower cost of living can expect to see ranges near the lower end of these.
Cost Savings on Heat Pump Installations
Switching from gas to electric can be costly, but often there will be discounts available through state or municipal governments that help with this switch. Make sure you are aware of your county, city and state’s offerings for rebates before you do major HVAC work. Most HVAC contractors will know of these options as well and can assist you in applying for rebates or tax credits.
Speaking of tax credits, another common discount is to offer significant tax credits on environmentally friendly units. This can help incentivize upgrading to variable-speed and/or high efficiency equipment.
We can’t include these credits and rebates in our cost estimates in this article since they won’t be available everywhere at all times. But in many states you can save thousands of dollars, making your investment much easier to afford.
Frequently Asked Heat Pump Questions
We’ve covered the basics of heat pump costs above, but still receive lots of questions. Here
Why Do Some Companies List Heat Pumps for a Lot Less?
Chances are, if you see a heat pump install cost listed and it’s several thousand dollars below what we’ve listed in this article, you’re only looking at the cost of the equipment. Labor accounts for nearly half of average installation costs. While this percentage dips as you upgrade to more advanced equipment, it remains a significant charge.
Why Do Heat Pumps Tend to Run Higher Than ACs or Furnaces?
A big reason for this is that a heat pump can run year-round and both heats and cools your home.
This requires additional mechanical processes, and can also result in more wear & tear on your machine. This is why regular tune-ups are vital to maintain the life of your system.
Can Solar Power Be Used to Power a Heat Pump?
Yes, but the proper connections will need to be set up to handle the energy transfer.
Solar power can be a great way to power your HVAC for less, but this often comes with additional installation considerations and costs, and may require technicians who specialize in solar power. At CABS Heating and Air Conditioning we work with and install solar panels, for instance, but this won’t be true of all HVAC contractors.
What Rebates are Available for Energy Efficient Heat Pumps?
The incentives available for particular HVAC equipment will depend on where you live. Many states and municipalities have large rebates available for eco-friendly technology, not just in HVAC. These can change yearly or even seasonally. The best way to see what’s available in your area is to have a conversation with a trusted HVAC professional in your area.
Does a High-End Heat Pump Really Pay For Itself Over Time?
The energy efficiency from a top-of-the-line heat pump will reduce energy bills and can recoup the difference in initial investment over time. However, this will take years at minimum, and may not actually occur until the end of the equipment’s lifespan, which can be 10-15 years or more.
Stated differently, this can be a factor in your decision but is rarely the most important factor for homeowners.
The more important benefit of an advanced heat pump model is the additional comfort that you will enjoy throughout the year.
How Much Does a Geothermal Heat Pump Cost?
Geothermal heat pumps can run anywhere from about $14,000 to over $40,000 depending on a range of cost factors.
Geothermal units can be an amazing upgrade, but they’re cost prohibitive for many. Additionally, most HVAC companies don’t specialize in geothermal installations, or you may live in an area with no options for geothermal installation. Thus, finding both a contractor and having the budget for one can be difficult.
Find the Best Heat Pump for You
Looking for a heat pump? If you’re not, I’m surprised you made it to the end of this article! I’m guessing you are, though, and that means you’re trying to figure out what the best system is for you.
It’s a question only you can answer for yourself, but the information here should help you to form some ideas of what might be the best fit.
Are you planning on staying in your home 10+ years? A mid-level or high-end heat pump could be worth it. Do you care about energy efficiency and environmentally friendly technology? Look for the efficiency rating. Is your home single-level and/or not terrible difficult to heat and cool? You’re probably fine with an entry-level unit. Do you roast in your second-floor bedroom in the summer? It’s time to invest in a two-stage or variable-speed unit.
These are the insights we hope you’re taking away from this article. And while you’re ready to get an exact quote, we’re here for you. If you’re in the Sacramento, CA area, give us a call today!
