The average cost to install a heat pump is $5,498, ranging from $4,024 and $6,974 depending on the size of your home and type of heat pump.

Installing a heat pump can make a huge difference in your electricity bill by decreasing the cost of heating and cooling your home. A heat pump will replace both the furnace and air conditioner/central air unit.

Since a geothermal heat pump requires underground installation, its installation costs will be more expensive than the costs for the air-source type.

Though the cost of the heat pump and labor fees may be a significant investment, it can drastically reduce your energy consumption. Consider the following factors before installing a heat pump.

On This Page:

1. Heat Pump Installation Cost Considerations
2. Heat Pump Prices
3. Types of Heat Pumps
4. How Does a Heat Pump Work?
5. Benefits of a Heat Pump
6. Heat Pump Tax Credits & Rebates

Installation Cost Considerations

The difficulty associated with the excavation of the ground will affect the installation costs. Make sure to consult a few installation professionals and get a number of bids, as this installation can vary significantly in price. For example, drilling through a concrete slab or driveway to install the heat pump will be more expensive than no excavation. Here are the cost factors to take into consideration before installing an air-source or geothermal heat pump:

• Heat Pump – The cost of the heating pump unit, itself, which can vary greatly based on the type of pump, brand, and capacity.
• Installation – Includes standard equipment, preparation of the installation area, planning, and labor. This cost might also include cleanup of the area after the fact.
• Materials and Supplies – Covers the cost of all necessary materials, such as fittings, hardware, and pipes. Materials and supply costs are typically much higher when installing ground source heat pumps, due to the pipe installation.
• Specialty Equipment Fees – In some cases additional equipment is required, including pipe cutters and brazing kits.

Size of Your Home

The biggest single factor in determining the price of your heat pump is the size of your house. Larger houses will require higher-capacity pumps to heat and cool them properly.  The higher your heat pump’s capacity is, the more you will pay for it. Do not try to cut costs by installing a pump that is too small for your needs. What you might gain in savings will be lost quickly in efficiency and higher energy costs. These are some tips to help you choose a heat pump that is ideal for your home:

• Size the unit in advance. Generally, the heat pump should be sized according to the maximum demand. For example, if you require a higher cooling demand the heat pump sizing must meet those basic requirements. Take into account the square footage of the ceiling, external wall, internal wall, and floor areas when calculating the ideal pump size for your home.
• Pay careful attention to the sound rating. Every heat pump features a specific sound rating measured in decibels. When looking for a heat pump for your home, try to find units that feature a lower rating. To reduce the noise output, install the heat pump away from any doors or windows. In addition, ensure that the pump is at least a few inches away from the exterior walls, as some models can vibrate while in operation.
• Consider the climate. Heat pumps are most effective in temperate climates that do not experience extreme temperatures. If the climate is too cold or too hot, the unit must use more energy to keep the indoor temperatures comfortable. For example, if it drops to below 25 degrees Fahrenheit the heat pump must use more power to warm the chilly air. Therefore, it may not be a cost-effective option if you live in a frosty or hot and humid climate.
• Decide whether a split or packaged system is best. Heat pumps usually fall into one of two categories: split-systems and packaged systems. A split-system includes both interior and exterior elements, while a packaged system features an all-in-one design. Packaged systems are ideal for homeowners who may not have the interior space to house a heat pump.
• Assess the existing duct setup. If your home does not already have a duct system in place, you may want to opt for a ductless heat pump. Otherwise, you will have to install ducts into the walls. A ductless heat pump only requires a small wall hole to connect the indoor components to the exterior unit. There are also short-run duct options that are best for smaller spaces in the home, and will only heat or cool the sections that feature the ductwork.
• Think about how many rooms you need to cool and/or heat. Heat pumps that only heat or cool one area of the house are known as single-zone systems, as they only feature a single exterior condenser and interior component. Multi-zone systems include two or more interior components that connect to one exterior condenser. The interior heads come in a wide range of shapes and designs, making it easy to create the perfect climate in any space.  

Don't wait until the last minute! Hire a pro now to install your new heat pump.

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Heat Pump Prices

Most customers will spend between $700 and $2,800 for a mid-quality heat pump, not including labor costs. Depending on the brand, model and installation factors like drilling or excavation, this can take the cost up to $9,000.

Heat pump manufacturers generally offer low-, mid-, and high-quality units. The HSPF rating (Heating Seasonal Performance Factor), energy-efficiency rating (SEER), and sound rating all factor into the cost of the heat pump. For example, a pump with a higher energy-efficiency and HSPF score is typically priced higher.

Below is an overview of the price ranges for popular heat pump brands:

Note: The estimates above are based on an average installation period of approximately 15 labor hours.

Many heat pump manufacturers do not publish their unit prices, due to the fact that there are a number of considerations that may affect the overall cost. However, here is an average estimate for other major heat pump brands based on their 3-ton models, which ranges from $5,000 to $8,200 for labor and standard materials. Keep in mind that there are other circumstances, such as more involved pipe work, that can cause these estimates to increase:

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Types of Heat Pumps

There are two main types of heat pumps: geothermal heat pumps and air-source heat pumps. A geothermal heat pump draws the heat from the ground, while the air-source type pulls the heat from the air outside.

• Geothermal (ground-to-air) - Geothermal heat pumps, also known as ground-source pumps, typically cost more to install. However, since they are installed underground and protected from the elements, they generally require less maintenance than other types of pumps. When you compare the installation cost to what it will save you in energy bills and maintenance, a geothermal system pays for itself twice as fast as an air-source system. In addition to using energy from the ground, these pumps can also operate using water and in-ground heat pipes.  
• Air-Source (air-to-air) - Air-source heat pumps are less expensive than geothermal heat systems and optimal in both cold and mild temperatures. They are usually installed on the exterior of the building, where they take in outside air and transfer heat via compression. To heat the home, the pump coil extracts warmth from the air and carries out an evaporation process to achieve the desired temperature.

There are also other types of heat pumps, such as hybrid pumps, which draw their energy from a gas boiler, and absorption pumps, which operate on water heated by solar panels or geothermal energy. However, these are used less commonly and often have higher unit and installation costs.

Not sure which suits your home? Call a professional for recommendations.

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How Does a Heat Pump Work?

Heat pumps rely on evaporation and condensation processes to heat and cool the home. The unit transfers heat through the system via a refrigerant substance. The compressor within the pump circulates the refrigerant through two heat exchange coils. The first coil evaporates the refrigerant and absorbs heat from the air. The refrigerant then passes to the second coil, at which point it condenses and the unit releases the absorbed heat.

Unlike a heater or air conditioner, which can only push cold or hot air out of the system, a heat pump is able to carry out both functions using two distinct processes:

Heating

The external heat pump unit absorbs energy from the outdoor air through the heat exchangers. In this instance, the refrigerant transfers heat to the system and is pushed through the pipes. Upon reaching the interior unit, the heat exchanger transfers the energy to the cooler air. The cool air is then warmed up as it circulates past the exchanger.

Cooling

The interior unit absorbs heat energy from the air via the heat exchanger, then uses the refrigerant to transfer the heat to cool down the room. The refrigerant passes back through the pipes into the exterior unit, where the energy is pushed out of the house and into the outside air by the exchanger.

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Benefits of a Heat Pump

There is a wide range of cost- and energy-saving advantages associated with heat pumps. Here are just a few of the benefits that homeowners can expect to receive after installing a geothermal or air-source heat pump:

• They are cost efficient. Heat pumps are generally less expensive to run than gas boilers because they use circulation and evaporation to keep the home at comfortable temperatures. Thus, they require less electricity, which leads to lower utility bills. Though they are typically more costly to install, the lifetime energy savings can be substantial.
• They retain moisture in the air. Air conditioners and traditional heating units typically push dry air into the home. Electric heating pumps, on the other hand, simply circulate the existing air without removing any moisture. Thus, homeowners do not need to place humidifiers in the home to compensate for the dry air caused by an HVAC system.
• They are eco-friendly. Heat pumps help to reduce your carbon emissions and improve the energy efficiency of your home, which makes them much more eco-friendly than conventional heating and air units. Heat pumps also do not rely on a combustion process to operate, meaning that they do not produce the same amount of pollution as gas or wood burners.
• They improve the house’s value. A heat pump is an upgrade to the home and can add to its overall resale value. This is primarily due to the fact that air conditioned and heated homes have an increased value, and heat pumps carry out both of these key functions for a fraction of the operating cost.
• They save space. Fireplaces and furnaces may produce heat, but they can also take up a great deal of space. A heat pump is compact and can be placed anywhere in the home, making it a space-saving alternative to open hearths. As an added perk, there is no cleanup involved.
• They are a safer alternative. Heat pumps offer flameless warmth, which makes them ideally suited for households with small children and/or pets. There are no warm surfaces or hot embers to cause concern, and heat pumps can be left on unattended.
• They reduce airborne allergens. Heat pumps do not produce any fumes that can diminish the air quality in the home. Therefore, people suffering from allergies, such as those caused by smoke, can enjoy all the comforts of a climate control. The heat pump also features an air filter that removes irritants, such as dust and spores, from the air.

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Heat Pump Tax Credits & Rebates

Installing an energy-efficient heating and cooling system run by a heat pump may qualify you for several federal tax credits now being offered. There is also a tax credit for using a renewable system like geothermal heat. Taking advantage of these credits will dramatically decrease heat pump installation costs.

In addition to renewable energy credits, heat pump owners may also qualify for a non-business energy property credit and/or residential energy property expenditures. The residential energy credit allows homeowners to claim 10 percent of the cost of eligible properties, which does not include installation fees. The residential energy expenditures include labor costs, professional preparation, and the installation of electric heat pumps.

After installing a geothermal heat pump, homeowners may be also able to claim up to 30 percent of the price of their heat pump units.

To verify which credits, rebates, or write-offs you may qualify for, speak with a trained tax professional before purchasing your heat pump. This can also have a direct impact on your decision-making process, as geothermal units may cost more upfront but allow you to claim larger tax expenditures and credits.

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