heat pump replacement cost

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Average Cost of Heat Pump System Installation

The average cost to have a heat pump system installed runs around $6,510. This is for a standard efficiency replacement system, and no other major equipment upgrades. The cost includes the outdoor heat pump condensing unit, and indoor fan coil or air handler, a new thermostat, pad, refrigerant lineset if needed, electrical connections, permits and inspections as well as all installation labor and disposal of the old heat pump after it’s replaced.

Last Updated: Wednesday, January 12, 2022

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Note: If your heat pump can be repaired rather than replaced, see these pages for the replacement of the evaporator coil or compressor. These are the two largest repairs a heat pump might require.

This page covers estimated costs for the outdoor heat pump condenser unit and the evaporator coil that is installed in or adjacent to the air handler. We’re talking about standard split system units, not mini split heat pumps or geothermal heat pumps.

Overview of Split System Heat Pumps

Heat pumps are a fast-growing sector of the residential HVAC market because they heat and cool your home with excellent efficiency and climate control. They are still most common in warm and moderate climates, though sales are growing for a new generation of highly efficient cold-climate heat pumps suitable for sub-freezing weather.

This Costimate gives accurate heat pump replacement cost for the outdoor unit, technically known as the condensing unit, and the indoor coil. There’s more to a heating and air conditioning system including an air handler or forced air furnace, thermostat and ductwork.

Since the heat pump and air handler or gas furnace (dual fuel systems) must be compatible, it might be necessary to replace the entire system to maximize the system’s energy efficiency and indoor climate control. Having the entire system replaced together also saves money compared with replacing them separately as needed.

Factors that affect cost are explained below plus a section with actual heat pump replacement prices supplied by other readers.

Product Cost and Installation Supplies

Heat Pump System Cost Factors

The outdoor unit, commonly called the heat pump but technically known as the condensing unit, is the most expensive part of most HVAC systems. It contains the compressor that circulates refrigerant and the outdoor coil where heat is dispersed in AC mode and picked up in heating mode.

You will also need to replace the evaporator coil in your air handler or furnace with one that matches the capacity of the new heat pump. There are related costs that include a refrigerant charge and a set of copper lines to circulate the it between the outdoor and indoor coils.

Because this is a significant expense, one of the costliest home repairs, it’s important to consider the options where you have them.

Capacity or Size of the Heat Pump (BTU/Ton)

Heat pumps range in capacity from 1.5 to 5.0 tons. That is 18,000 to 60,000 BTUs. You don’t have an option here. The HVAC technician will do a load calculation to determine the heating and cooling requirement for your home, that is, the capacity of the heat pump needed. Note: If you have made energy efficient upgrades to your home such as adding attic insulation, triple-pane windows or insulated doors, it is possible you will be able to install a heat pump that is smaller than the one it replaces. If you’ve made those upgrades, make sure your technician is factors them when calculating the heat pump size needed.

Efficiency (SEER for cooling and HSPF for heating)

Here’s one factor where you do have a choice. The higher the rating, the more efficient the unit is, and the more it will cost. Heat pumps must have a SEER ratings start of at least 13 (14 in southern states). The most efficient have ratings above 22. The tradeoff is higher upfront cost for efficient equipment but lower operating costs. The more extreme your weather is, especially where summers are hot and humid, the more cost-effective it is to buy an efficient heat pump.

Compressor Performance

Heat pumps are made with single-stage, two-stage and variable-capacity (modulating) compressors. Two-stage and modulating compressors cost more, but are quieter and used in heat pumps that are more efficient than single-stage models.

Warranty Length and Benefits

Cheap heat pumps have a 5-year parts warranty. The industry standard is 10 years, and the best are 12 years. Some brands offer unit replacement coverage on the compressor and outdoor coil. If one of them fails while under warranty, the entire outdoor unit is replaced. The best warranty coverage is often on the most expensive units. Extended warranties that also cover labor (not covered by standard warranties) are available through your contractor but are third-party warranties and not recommended.

Brand Quality

National consumer surveys have been done asking homeowners whether their heat pump has required repairs. Rheem, Ruud, Goodman and Amana are among the brands with poor repair records while American Standard and Trane ranked highest. The rest of brands are in the average range.

The Marketing Budget

This sounds cynical, but it plays a role. Carrier, Trane and Lennox outspend the rest of the competition on marketing, so costs are up to 15% higher.

Cost of Living

Where you live will affect cost by up to 20%. Prices across the board are higher on and near the East and West coasts. They are lowest in the rural Midwest and South. Other regions are in the average range.

Demand at the Time of Replacement

Like any product and/or service, supply and demand play a significant role in the cost of a heat pump system. If yours has failed in the heat of the summer when all contractors are busy and don’t need the work to stay busy, the price will be higher. On the other hand, if you replace your system when they are slow, the cost can be considerably less. 10-20% lower pricing is often seen in off-peak times.

Cost of Installation Supplies

Many homeowners get sticker shock when they get heat pump replacement cost estimates. This list of supplies might help you see where your money goes. Keep in mind that heat pump contractors have high overhead costs too including trucks, equipment storage, liability insurance and bonding and high wages for certified technicians (average of $47,000 per year per the Bureau of Labor Statistics).

• $35 – $100 | Miscellaneous copper tubing and fittings.
• $150 – $300 | Copper line-set to connect indoor and outdoor coils.
• $45-$60 | Refrigerant
• $40 – $760 | New thermostat if needed.
• $15 – $50 | Condensate drain line pipe and fittings.
• $10 – $50 | Misc. fasteners and screws, metal seam tape, etc.
• $25 – $75 | Outdoor condensing unit pad.
• $40 – $250 | Electrical wire, disconnect, supplies and/or circuit breaker.

Permits, Inspection, and Installation Costs

Due to electrical and mechanical connections required for heat pump installation, it is likely you will need a permit. The benefit is that it includes an inspection to ensure the work is done safely for your protection. If your contractor tells you no permit is needed, we recommend verifying it with your local building department.

Permits and Inspection

• $50-$200 ea. | You might need separate electrical and mechanical permits and inspections, or these functions could be combined in a single permit.|

System Installation Cost and Time

Many HVAC contractors start with flat rates for heat pump installation. They adjust that rate based on the time and materials they estimate will be needed given the complexity of the work and other factors. Others use hourly rates to create estimates. Either way, overhead, wages and fair profit are factored.

If the work is priced hourly, standard rate ranges are:

• $60 – $90 per hour | Certified HVAC installer
• $50 – $75 per hour | An apprentice or helper

Completed Installation Time

Direct replacement of the heat pump is the fastest. As the complexity of the work (removing and replacing a line set, connecting to an air handler in a difficult location like an attic or crawlspace or modifications to sheet metal for the installation of the indoor coil), time goes up. Most heat pump installations are two-person jobs that take 4-10 hours.

• 4-6 hours | Easy Installation

Same placement location, use of existing line set and thermostat, air handler easy to reach in a utility room or walkout basement

• 5-8 hours | Most Common Installation

Utility closet, most basements, small amount of sheet metal work, use of some existing materials such as the drain or line set but the installation of a new thermostat

• 8 hours or more | Difficult Installations

Difficult access to the indoor and/or outdoor unit, replacement of most supplies including the line set, connection to the electrical panel, installation of a programmable thermostat, etc.

DIY or Hire a Pro

Even experienced DIY homeowners leave heat pump installation to the pros. The biggest roadblock to installing the heat pump yourself might be that charging a system requires a refrigerant handling certification. Your local HVAC wholesaler won’t sell you refrigerant without the certificate.

There’s also a science to charging a system to allow it to run at maximum efficiency. For example, low refrigerant level will cause inadequate heating and cooling, and the heat pump will work too hard.

Costly specialty tools are used – vacuum pump, superheat/subcooling meter, high-temp torch for brazing. Properly charging a heat pump system requires calculating the necessary refrigerant amount given the capacity of the heat pump and the length of the refrigerant line set. Many heat pump systems must be adjusted to account for your climate – arid, average or humid.

As an experienced do-it-yourselfer that handles most projects, I want my heat pump installed by someone who does it every day. That’s the best way to ensure that it will run as efficiently and durably as it should.