Heat pump installation costs by type

HVAC Logo IconBy HVAC.comJuly 31, 2023
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A heat pump system does much more than the name suggests. While the unit does produce heat for your home when needed, it also creates cooler air as the outdoor temperature heats up. In this heat pump unit guide, we’ll walk you through how a system operates, heat pump costs, and the top brands when choosing a unit for your home.

Understanding how a heat pump works will support you in choosing the best one for your home. These heating and cooling units come with a number of advantages, like requiring less energy for optimal performance and reducing your monthly energy bill compared to a furnace or central air conditioning system. To help guide your heat pump installation choice, we’ll reveal which homes are best suited for a heat pump system and explain the differences between the different types.

two hvac units outside


What is a heat pump system?

A heat pump unit does not generate heat, It simply transfers it from one space to another to create the desired environment in your home. In the summer months, a heat pump will transfer the warm air from inside your home to the outdoors. When the fall and winter months move in, the system will pull warmth from the outside air into your home.

The systems are powered by electricity and, similar to an HVAC system, use refrigerant to create a consistent, comfortable indoor temperature. The refrigerant flows between the air handler (indoor unit) and the heat pump compressor (outdoor unit) to transfer the heat. Other heating units, like furnaces, burn fuel to warm your indoor air, so a heat pump is typically a great money saver when it comes to your monthly energy statement.

Types of heat pumps

Air-source heat pump systems

An air-source heat pump absorbs warmth from outdoor air and transfers it inside your home. Even if it’s cold outside, abundant warmth still exists in outdoor air. By moving heat indoors, the heat pump system creates a warmer environment in each room of your house.

To cool your home, air-source heat pumps draw the heat out of your home. By removing the heat, your home feels cooler. Under optimal conditions, air-source heat pump systems can drop a home’s energy consumption by as much as 40 percent.

Geothermal heat pump systems

Instead of moving heat energy from the air, geothermal heat pump systems use underground heat as an energy source. Sometimes called ground-source heat pump systems, geothermal systems use a ground loop to tap into ambient below-ground heat. This system of fluid-filled piping absorbs below-ground heat and moves it up to the home’s heat pump, where it is then transferred indoors to heat the home.

Geothermal heat pump systems can also be water-source. This means they pull heat energy from a nearby water source with consistent temperatures, such as a lake or pond. The heat transfers into the home.

To cool the home, geothermal systems draw heat from inside and transfer it into the ground or water source. The ground or the water, depending on the type of system you have, becomes a receptacle for the excess heat in your home. Geothermal heat pump systems can reduce household energy use by up to 50 percent. They offer excellent humidity control and long service life.

How to choose a heat pump

Purchasing the best heat pump for your home is more than choosing a recognized brand name. When researching the best systems for your home, forgo using the many “rules of thumb” for appropriate sizing. Often, the methods of “500 square feet per ton” or “400 cubic feet per minute per ton” can be inappropriate calculations that lead to inadequate sizing of a heat pump.

In order to get the most from your system, a professional heating and cooling expert will need to consider your home’s windows, foundation, insulation values, wall thicknesses, air filtration and more. An Air Conditioning Contractors of America (ACCA) Manual J calculation is the most comprehensive evaluation available to guide you to the best home heat pump.

Top heat pump carriers

Explore heat pump models and features from top heat pump brands:

  • Trane
  • Carrier
  • Tempstar
  • Daikin
  • American Standard
  • Rheem
  • Lennox
  • York
  • Heil
  • Goodman
  • Amana
  • Ruud
  • Payne
  • Comfortmaker
  • Day & Night

We know deciding which heat pumps are good for your needs must include pricing. The cost will differ depending on your location, various elements of your home, and the model you select.

Heat Pump Installation Fees

To best answer the question “How much should a heat pump cost?”, we want to break down the typical fees that are included in a heat pump installation project. While the process and fees will vary among different heat pump system installers, there are certain fees that should be expected no matter the company you choose.

Heat pump installation fees:

  • Heat pump cost (price of the actual system)
  • Labor for project completion
  • Project supplies/tools
  • Special equipment rental fee
  • Installation debris disposal fee
  • Old heat pump or HVAC removal fee

The exact cost of a new heat pump will depend on your current heating and cooling system setup and what work must be completed before the heat pump can be installed.

How Much Does HVAC Replacement Cost?

Average Cost: $3,250 – $12,586

Like your home and needs, your HVAC project cost will be unique.

*Estimate is based on current data and does not represent a guaranteed price. For accurate pricing contact a local HVAC dealer.

If you're in the market for a new HVAC system, QuoteScore's team of HVAC industry insiders can score your quote to ensure it’s fair.

$5,000 – $6,000

Estimated Total

The average cost for a new HVAC system is $3,250 to $12,550, which includes equipment and labor fees for the installation of a central AC unit and gas furnace. The chosen HVAC brand, necessary ductwork repair, and your location will influence the project cost.

Heat pump cost by equipment type

Heat pump pricing depends on many factors. The type of heat pump, its capacity, and other elements affect the cost of the unit. Below, we’ll discuss general heat pump cost and the elements that can play a role in the final investment.

Ducted heat pumps

Ducted heat pump heating and cooling systems act much like traditional central heating and cooling systems. The heat pump unit sits outdoors, and the indoor fan coil works to move conditioned air into living spaces via a duct system. A ducted heat pump system may be most affordable if your home or building has an existing duct system that is in good shape. Using existing ductwork will eliminate the need to install an expensive new duct system, which can cost thousands.

The price to purchase a ducted heat pump and have it installed runs on average $5,600, but this cost can go well over $10,000 depending on the brand, energy efficiency, labor warranty, and other features.

Ductless heat pumps

In homes or buildings where duct systems do not exist, ductless heat pump models are an option. These systems, sometimes called ductless mini-splits, include an outdoor condenser/compressor unit and one or more indoor air handlers.

Ductless mini-split heat pump systems generally cost $1,500 to $2,000 per ton of cooling capacity for just the equipment, not including installation. With installation, ductless mini-split heat pump systems run an average of $4,000 to $5,000. This is approximately 30 percent more than central heating and air conditioning systems, minus the duct system.

Geothermal heat pumps

Geothermal heat pump cost is far more than other heat pump types when installing the entire system. Geothermal systems require underground ground loops to harness the Earth’s natural energy. Installing one involves excavation, running hundreds of yards of piping, burying the loop, and more. This process is quite expensive. Installing a new geothermal heat pump to work with an existing ground loop is far cheaper.

Heat pump pricing for the geothermal heat pump itself ranges from $1,500 to $13,000 depending on the model, not including installation. Depending on the size needed to heat and cool your home or business, installation can cost $10,000 or more.

Using the above information as your heat pump pricing guide, you may confidently shop for a new heat pump system as well as an HVAC installer in your area to do the job. There may be variables not mentioned above that are necessary to complete your project. Work with a heating and cooling professional you trust to ensure you’re getting the best price and quality workmanship.

Factors to consider before buying a heat pump

A number of factors, from your climate to existing ductwork, will influence whether or not a heat pump system is right for your home. A heat pump system’s cost can rise quickly if your home isn’t a good fit for one, and in certain colder states heat pumps cannot provide the expected efficiency. You may discover that another type of heating system is a better choice.


Air-source heat pumps only run efficiently when outdoor temperatures are above freezing. If you live in a region where temperatures drop below 32 degrees, you shouldn’t choose a heat pump as your sole heating source.

In an area where temperatures reach freezing, air-source heat pumps make good primary heating systems. You’ll want to have a backup system installed, such as a gas furnace, which can take over when temperatures reach freezing. Your heating technician can install controls that automatically shut down the heat pump if temperatures reach or drop below freezing. The controls will call for the furnace to come on, efficiently heating the home in these conditions.

Geothermal heat pump systems are another alternative in areas with freezing winters. Despite freezing air, the temperatures below ground remain constant around 55 degrees. This is more than enough heat to warm your home as desired.

In areas with mild winters, air-source heat pump systems are a perfect option to provide the heating you need. Depending on the specifics of your climate, you may not need a backup heating system.


If you switch to an air-source or geothermal heat pump from a conventional forced-air heating and cooling system, you will likely be able to reuse your home’s existing ductwork, if it is in good shape. If you do not have ductwork installed in your home, the added expense to install ductwork may make traditional heat pump systems cost-prohibitive.

A ductless mini-split heat pump system is an ideal solution for homes without ductwork. Individual indoor units mounted on walls or ceilings connect to an outdoor condenser. Homeowners benefit from the savings heat pumps offer, as well as the system’s inherent zoned comfort control.

Natural Gas Lines

Heat pump installation is a great alternative to a new furnace if your home doesn’t currently connect to existing natural gas lines. Otherwise, crews will need to install the new gas line access, which can be extremely expensive.

Frequently Asked Questions

How much does a heat pump cost?

The price will depend on your home’s size and the heat pump’s rating. Prices can range from around $700 for ductless mini split systems up to $13,000 for a geothermal heat pump system, not including installation.

How much does it cost to install a heat pump?

The cost for heat pump installation also depends on the size of the unit and whether it is a single-room or whole-home system. A single-room air-to-air system can cost as low as $500, including installation. Whole-house units, on the other hand, range in price from $2,500 to $7,500, including installation. Geothermal heat pumps typically require excavation to install, which adds several thousand dollars to the cost.

How much does it cost to run a heat pump?

The type of heat pump you select, the climate where you live, and the temperature you set on your thermostat will all impact the cost of running a heat pump. A highly-efficient model could save you 30% to 40% on your energy bill.

Is a heat pump right for me?

Whether used as an independent heating and cooling system or partnered with an energy-efficient HVAC solution, a heat pump offers energy savings no matter where you live. Because of the naturally warm climate in the South and Southwest, heat pumps are especially effective in these regions. Areas where the temperature rarely dips below freezing are often optimal locations for heat pump installation.

The average lifespan of a heat pump is about 15 years. Routine maintenance and seasonal cleaning of the unit will help your system perform at its best for years to come.

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