Cost Of The Heat Pump: Everything You Need To Know About it

Heat pump technology is the most efficient and environmentally-friendly way to cool and heat your home. According to the Department Of Energy, a heat pump produces 1.5-3 times more energy than the electrical power it consumes during operation. Thanks to its eco-conscious potential, a heat pump can lower your energy costs by up to 60%, leaving you with enough money to install a solar system.

The cost of buying and installing a heat pump ranges between $4,110 and $7,240. This cost depends on the type, brand, size of your house, and, of course, the prices in your area. On average, it will cost you $5680 or more to have a fully running heat pump in your home.

In this article, I’ll take you through everything you need to know about heat pump costs. I’ll address factors such as the type and brand of heat pump, size of your house, labor costs depending on your location, and installation fees. Let’s jump right in.

Heat Pump Cost by Type

There are three main types of electric heat pumps, each offering various benefits and drawbacks at different price points. Each type is suited for a particular home’s cooling and heating needs and the climate of that locality. However, two additional heat pump types don’t rely on direct electricity.

Let’s look at each of them and their price point.

Air Source Heat Pump

Air Source heat pumps are a common option for homeowners because of their affordable price point and benefits. 

This system works by drawing heat from the air using refrigerants and taking it elsewhere. When it’s hot, an air source heat pump draws heat from the indoor air and takes it outside, leaving your home cool and fresh. It draws heat from the outdoor air during cold days and brings it inside to warm your home.

This process uses very little energy, and the system can last between 15 and 20 years, depending on use and maintenance. They are generally quite affordable as long as you have working ductwork in your house. On average, a unit and installation will cost you around $3500 to $7500.

Ductless Mini-Split Heat Pump

If your home doesn’t have existing ductwork and you don’t want to install them, a ductless mini-split system is the best option. In fact, many people consider this to be the best option because ductwork accounts for over 30% of energy loss during operation. 

The ductless system works the same way as an air source system in that it uses the heat from the air to warm and cool the home.

The mini-split system has small indoor units connected to the outdoor unit in each zone. Ductless mini-split units are ideal for homes with lower square footage, fewer conditioning zones, and poor insulation. The fact that it’s the cheapest option is also a big plus.

On average, we estimate ductless heat pumps to cost somewhere between $1500 and $4500.

Geothermal Heat Pump

Unlike air source and mini-split heat pumps, geothermal systems use the earth’s constant temperature to collect and store heat. It has underground pipes called heat exchangers where the heat comes to or from the ground. 

This system is also known as a Ground Source heat pump and is the most efficient of all heat pumps.

Although a huge money saver in its operation, geothermal heat pumps will cost you an arm and a leg to install the first time. They require extensive groundwork to hide the heat exchangers and loop everything into the house. 

Besides the research that goes into it, you also have to dig 4 feet (1.21 meters) deep trenches under or beside the home. The labor cost of doing this and the cost of the unit itself can range between $13,000 and $36,000.

Gas-Fired Heat Pump

How do you heat and cool a large building? You go with a gas-fired heat pump. Granted, it will be more expensive to run than electric heat pumps, but it has better capacity to heat and cool a larger building. 

If you need a heat pump for a commercial building or your home is over 4000 square feet (1,219.2 square meters), this is the best option. It will cost you around $4500-$8000 if you already have ductwork in place, but you have to consider the cost of fuel or gas.

Dual Fuel Hybrid Pump Unit

A dual fuel hybrid heat pump combines a gas furnace and an electric heat pump, thus leveraging the best of both worlds. One of the reasons you should consider a hybrid system is if you live in a place that gets below 32°C (89.6°F) for a long time.

As you can imagine, this system is more expensive than air source and ductless heat pumps, going for $4500-$10,000. The other alternative is to add a heat pump to an existing gas furnace to work together. This arrangement will be much cheaper since the furnace is already there and can cost you between $2500 and $6000.

Read: What Is Heat Pump? Everything You Need To Know

Heat Pump Cost by Size

Once you’ve decided on the most suitable type of heat pump for your home, the next step is determining the right size. 

The size is crucial because a heat pump that’s too big for the house will experience short cycles, among other issues. If you buy a small one, it will need to work throughout the day to meet the heating/cooling requirements of the home, and that’s not good for your energy bills.

To determine the right size, you’ll have to know the square footage of your home, or at least the places that need to be heated and cooled. After that, you need to find which climate zone you live in. The table below will guide you on that.

For example, if you live in Zone 1 in the U.S., you need a heat pump that can comfortably handle 30-35 BTUs per square foot. Heat pumps come by the ton, and one ton is equal to 12,000 BTUs, so to get the right size for your home, use the following formula:

The recommended BTUs per square foot for your zone x the square foot of your home= Heat pump size/12,000

Take the example above, if you live in a 2,000 square foot (609.6 square meters) house:

30BTUs x 2000= 60,000/12000= 5 ton heat pump

How does that translate cost-wise?

The heat pump size directly impacts the system cost. Below are the average costs for an air source heat pump based on tonnage. Your system may have a higher or lower price tag depending on the type.

TonsAverage System Cost
1 Ton$500-$1500
2 Tons$1,700 – $5,000
2.5 Tons$1,800 – $5,000
3 Tons$2,000 – $6,000
3.5 Tons$2,100 – $6,200
4 Tons$2,500 – $6,500
4.5 Tons$2,700 – $7,000
5 Tons$3,000 – $8,000

Read: What Size Heat Pump Do I Need?

Heat Pump Prices by Brand

The brand you choose also has a lot to do with how much you pay for the heat pump. Some brands make premium, high-quality systems, and the cost reflects that, while others make standard or basic efficiency models that cost less.

If you want an affordable heat pump, consider going with Aire-Flo. A 3-ton Aire-Flo heat pump with 18,000 BTU capacity will cost you $1200+labor. To get a more comprehensive idea of cost by brand, check out the table below:

Heat Pump BrandUnit Price
Aire-Flo$950 to $1,500
Airtemp$1,000 to $1,675
Amana$1,250 to $3,200
American Standard$1,285 to $3,995
Ameristar$1,055 to $1,450
Maytag$1,200 – $4,000
Rheem$1,200 – $4,000
Trane$1,300 – $4,500
Carrier$1,400 – $5,000
Coleman$1,100 to $3,675
Lennox$1,500 – $6,000

Heat Pump Cost by Labor

The average labor cost of putting up a heat pump depends on the type you are installing and your location. This cost ranges from $68-$150 an hour, with a ductless mini-split heat pump being the most affordable because of the minimal work.

An air-source heat pump would be second in line because there is a bit more work to it, and this can increase if the technicians need to replace or repair the ductwork and vents. 

Obviously, a geothermal heat pump is the most expensive to install, mainly because it will take the most time. If you pay $100 per hour and the laborers are there for a week, you can see how that amount would add up fast.

Other additional costs to consider when installing a heat pump include:

  • Laying concrete for the outdoor compressor or fan unit.
  • Cutting holes in the exterior walls to pass the electrical parts.
  • Removing an old heat pump or HVAC system.
  • Replacing, repairing, or cleaning up the ductwork and vent system.

However, these costs should be included in your overall quote when the technicians come over and review the house. Make sure everything is included so you don’t get rude surprises along the way. 

If you can, get a contractor who will give you a flat rate for the entire project instead of charging by the hour.

Read: What Are Heat Pump Disadvantages?

Heat Pump Cost by Location

Your location plays a huge role in the overall cost of installing a heat pump. 

For one, different places have different labor costs, so you can’t expect to be charged $30 per hour everywhere. 

Secondly, each location’s climate is different, so you have to put measures in place to cater to that. For example, if your area gets snowy from October until April, your home will likely need a backup furnace or at least a hybrid heat pump to keep your home warm.

Here are a few examples of heat pump cost by region:

  • New England: $2,300–$5,500
  • Midwest: $4,500–$5,500
  • Central Atlantic: $3,300–$7,300
  • Gulf Coast: $3,800–$7,100
  • West Coast: $3,100–$7,000
  • Southern Atlantic: $3,000–$5,000
  • Miami, Florida: $2,200 – $3,700
  • Portland, Maine: $2,300 – $5,500
  • Los Angeles, California: $3,100 – $7,000
  • Denver, Colorado: $2,800 – $10,000
  • Houston, Texas: $3,800 – $7,100
  • New York, New York: $3,300 – $7,300
  • Atlanta, Georgia: $3,000 – $5,000
  • Minneapolis, Minnesota: $3,200 – $5,400
  • Chicago, Illinois: $4,500 – $5,500
  • Buffalo, New York: $3,500 – $6,900

Heat Pump Cost by Efficiency

Another factor that affects heat pump cost is efficiency. The primary reason for buying a heat pump is that it’s more efficient and saves you a lot of money monthly. Thus, it makes sense that you’d want to get the most efficient unit, which comes at a cost.

Heat pump efficiency is divided into two;

  • SEER, or Seasonal Energy Efficiency Ratio. This measures the unit’s cooling capacity divided by the amount of power or energy used.
  • HSPF, or Heating Seasonal Performance Factor. Instead of cooling capacity, HSPF measures the heating capacity of a unit Vis-a-Viv the energy it’s using. The less energy, the better.

In the table below, you will see the efficiency cost, starting with the lowest to the highest.

Efficiency RatingUnit PriceInstalled Price
13-14 SEER/ 7-8 HSPF$1,000-$2,100$4,100-$5,400
15-16 SEER/ 8-9 HSPF$1,500-$2,600$5,200-$6,300
17-18 SEER/ 9-10 HSPF$2,200-$3,200$6,300-$7,400
19+ SEER/ 10+ HSPF$3,100-$4,000$7,200-$9,500

Read: Heat Pump Effectiveness In Cold Weather

Cost of Running a Heat Pump

The cost of running a heat pump depends on several factors that include:

  • The size and insulation state of your home. The bigger your home is, the more expensive it will be to cool and warm it.
  • The efficiency of the model. The higher the SEER and HSPF of the unit, the cheaper your running cost.
  • Location of your home. If your home is located where it’s extremely cold, the unit will need to work long hours to warm your home. This is true for places that are extremely hot as well.

That said, there is an easier way to calculate how much energy you use on heating and cooling per year.

For every 1kWh of power, a heat pump produces 3kWh of heat. The average heat demand for most homes is 12,000kWh per year. Electricity costs for residential users in the U.S. is 13.3 cents per kWh.

12,000kWh/3kWh= 4,000kWh of electricity

4000 x 0.13= $520 per year, or $43 per month.

In comparison, an electric furnace will cost you $2,628 a year, while a gas furnace will take you back $1800 annually. In most cases, heat pump technology reduces your monthly energy bill by more than 60%.

Strategies To Save Money on a Heat Pump

There is no doubt that installing a heat pump in your home is a costly affair, despite the amazing future benefits. With a price tag of between $4,133 and $10,000 for air source heat pumps and up to $30,000 for a ground source heat pump, it’s only normal you would want to save where you can.

The following strategies will help you do just that.

  • Go for a lower SEER/ HSPF rating. While a 15-16 SEER-rated heat pump is the most efficient, there is not much difference in energy saving from a 13-14 SEER-rated unit. There is, however, a huge price difference- the former will cost you $5500-$6300, while the lower-rated one will be at least $1000 cheaper.
  • Go for a less expensive brand. The thing about brands is that many of them leverage their big name to raise the cost of units for no good reason. You can still get an excellent heat pump at a much lower price if you ignore the big brands and go with smaller but reputable ones. If you live in moderately warm climates, there is no need to spend money on a high-end pump.
  • Choose air source heat pumps. Many sellers will tell you that a ground source heat pump is more efficient and will last a lifetime. They would be right about that. However, if you don’t live in extremely cold areas, the cost of installing a ground source heat pump is not worth it. Go for a simple air source heat pump if you already have working ductwork in your home or the cheaper ductless mini-split system if your home is small.
  • Buy in the off-season. The best time to install a heat pump is not right before winter or summer. They are in high demand during these times and therefore tend to be expensive. The best time to buy a heat pump or anything else is during the off-season in your locality, usually fall or spring. The unit prices will be low, and the technicians won’t be so busy.

Read: Where Is The Heat Pump Located?

Final Thoughts

Installing a heat pump is one of the best decisions you will ever make. As long as you keep up with the semi-annual maintenance, change air filters often and keep the outer components clean, you should not have any problems for years.

Ensure you get a few quotes from different contractors and ask if you can get an itemized bid instead of an estimate. This will help you know exactly what you are paying for and let you compare prices. Be sure to also find out about any permits required and the time frame for finishing the installation.