Updated 1 month ago
How Much Does a Heat Pump Cost? 2025 Expert Guide
Written by Dan Simms Dan SimmsDan has been a solar proponent for more than a decade now, and he has been researching and writing about solar and renewable energy for the past five ...Learn more , Edited by Catherine Lane Catherine LaneCatherine has been researching and reporting on the solar industry for five years and is the Written Content Manager at SolarReviews. She leads a dyna...Learn more
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Average heat pump costs sit around $6,000, but prices range widely based on many different factors. To figure out where your total heat pump installation cost will fall, you’ll need to consider things like the type of heat pump you’re installing, the efficiency rating, the size of the area you’re heating or cooling, and a few other factors. In this guide, we’ll explain average heat pump costs and how these factors can influence your total.
Key Takeaways
Heat pumps cost an average of $6,000, and most homeowners pay between $4,000 and $12,000 for installation.
Heat pumps can reduce your energy consumption for heating and cooling by up to 50%, making them more environmentally friendly and affordable than traditional systems.
Federal, state, and local incentives and rebates can reduce your effective heat pump costs by 30% or more.
How much does a heat pump cost?
The average cost to install a heat pump is $6,000, but prices can fall as low as $2,000 for a small ductless mini split or climb up to $25,000 or more for a geothermal heat pump installation.
National average cost | $6,000 |
Low cost | $2,000 |
High cost | $25,000 |
Heat pump incentives and rebates
Heat pump installation costs are quite expensive, but since they’re more efficient than traditional HVAC systems, there are energy efficiency incentives and rebates available that you can take advantage of. These can help reduce heat pump prices, in addition to the energy savings you’ll see over the lifespan of the equipment.
The most notable incentive, the Energy Efficiency Home Improvement Credit, comes from the federal government and is available to all U.S. taxpayers. The tax credit is for 30% of your heat pump installation cost up to a maximum of $2,000. If you can take the entire credit (you’ll need to owe at least the credit amount in federal income taxes), the average cost of a heat pump would effectively come down from $6,000 to $4,200.
Some state governments also offer incentives for heat pump installations, as do many utility companies. You can take these more localized incentives in addition to the federal credit, provided you meet program eligibility requirements.
For example, PSEG, an electric company in New York, offers a rebate of up to $1,000 for heat pump installation (or $4,000 for income-eligible homeowners), and the State of California offers heat pump rebates of up to $4,000 (or $8,000 for income-eligible homeowners).
You can check your state government’s website or contact your utility company for more localized information.
3 factors that impact heat pump costs
Installing a new heat pump can range from $2,000 up to $25,000 or more, and there are many factors at play that determine where in that range your total will fall. You’ll need to consider the following factors to get the most accurate pricing possible.
1. Heat pump type
The type of heat pump you install will have the most significant impact on the cost. There are six primary types of heat pumps to consider, each of which works a bit differently and varies when it comes to pricing.
Air source heat pumps
Air source heat pumps are the most common option. They cost an average of $6,000 and usually fall between $4,000 and $12,000, depending on the size.
Air source heat pumps pull heat from the air and move it either inside or outside, depending on whether you’re calling for home heating or cooling. They work best in moderate climates where pulling heat from cold air during the winter or moving heat to hot air outside during the summer is still an efficient process. However, modern heat pumps can still work in freezing temperatures.
Geothermal heat pumps
Geothermal heat pumps cost an average of $15,000 and are the most expensive type. Small systems can sit as low as $5,000, but whole-home geothermal heat pumps for larger homes can cost $25,000 or more.
The higher cost is due to the excavation required, as geothermal heat pumps exchange heat between your home and a well that reaches up to 400 feet into the earth and requires piping that runs from your HVAC system to the well at four to six feet deep.
Geothermal heat pumps, sometimes called ground-source heat pumps, are better for extreme climates because they pull heat from or deliver heat to stable temperatures deep underground rather than fluctuating outdoor air.
Solar heat pumps
The term “solar heat pump” refers to an electric heat pump powered using solar energy. These can be air-source heat pumps or geothermal heat pumps, and the term can even refer to ducted and ductless systems in homes that have solar installed.
A solar heat pump costs an average of $6,000 and ranges from $4,000 to $25,000. If you don’t already have solar installed, you’ll need to allocate about $21,816 for an average-sized solar system, which could come down to $15,271 if you can take the entire federal investment tax credit (ITC). Keep in mind that a solar installation of that cost will cover all of your energy needs, not just the ones to run your heat pump.
Hybrid heat pumps
A hybrid heat pump is a system that can use both an electric heat pump — this can be an air source, geothermal, or solar heat pump, and it can either be ducted or ductless — with a traditional heating system that uses oil, natural gas, or propane to generate heat. Hybrid heat pumps cost an average of $6,000 to install, assuming you already have a traditional gas furnace or boiler.
Dual fuel systems are popular in extremely cold climates, as homeowners can make use of the high-efficiency heat pump during cool and moderately cold weather but still switch to standard heating options when temperatures dip too low for heat pumps to work efficiently. The result is maximized efficiency and a reduction of your carbon footprint while still being able to heat your home in extreme cold.
Ducted heat pumps
Ducted heat pumps use an electric heat pump unit to move heat inside or outside, and they rely on ducts running through the home to deliver the conditioned air. Ducted heat pumps are typically air source heat pumps, so they still cost an average of $6,000 and can range from $4,000 up to $12,000.
One important thing to note is that you’ll also need to pay to install ducts if you don’t have existing ductwork installed for a central AC system or furnace/forced hot air (FHA) system. Duct installation work by a professional HVAC contractor will add between $5,000 and $10,000 to your cost, bringing the average cost to between $11,000 and $16,000, with a typical range of $9,000 to $22,000.
Ductless heat pumps (mini splits)
Ductless heat pumps, also called ductless mini split heat pumps, are the most affordable type of heat pumps to install. They’re cheaper than ducted systems because they have just a small duct (contrary to the name and popular belief) running through your exterior wall or ceiling.
Ductless heat pumps cost an average of $4,000 and can range from $2,000 up to $10,000, depending on how many outdoor condensers and indoor air handlers you need and how far your professional needs to run wiring to connect everything.
2. Heat pump capacity
Another important cost factor to consider is the heat pump capacity, expressed in tons or British Thermal Units (BTU). Larger capacities will come with higher material costs and often slightly higher labor costs to install bigger, heavier units.
Generally speaking, you need between 20,000 and 24,000 BTU for every 1,000 square feet, which equals 1.5 to 2 tons. For a 1,500-square-foot home, you’ll need a 3-ton heat pump on average.
Remember, the right heat pump size for your home will depend on your home’s size and climate, but the table below provides average costs based on home square footage. You’ll spend an average of around $3,500 per ton or per 12,000 BTU.
Tonnage | BTU | Home square footage | Heat pump cost |
|---|---|---|---|
1 | 12,000 | 500 | $3,500 |
1.5 | 18,000 | 750 | $5,250 |
2 | 24,000 | 1,000 | $7,000 |
2.5 | 30,000 | 1,250 | $8,750 |
3 | 36,000 | 1,500 | $10,500 |
3.5 | 42,000 | 1,750 | $12,250 |
4 | 48,000 | 2,000 | $14,000 |
3. Additional services
Heat pump installation may require additional services that can drive up your costs. Consider the additional costs and options below based on your needs to get an accurate, all-in heat pump cost.
Electrical panel upgrades: Heat pumps usually require a 240-volt connection, which may be too large for your home’s capacity if you’re on 100-amp service. You might need to pay between $500 and $4,000 to upgrade your panel to accommodate the higher loads.
Ductwork installation: If you don’t already have ductwork installed and want a ducted heat pump, you’ll pay between $5,000 and $10,000 to install it on top of your heat pump cost.
Decommissioning your old HVAC system: Removing your old heating system can add between $500 and $1,200 to your total if you’re going with a full heat pump replacement. You could save money on replacement costs by leaving your existing heat system in place and using it as a backup heat option as part of a hybrid heat pump system.
Capping gas lines: Ditching natural gas altogether for your heating source? You’ll pay between $75 and $150. With permit costs, though, you’re looking at between $200 and $500.
Installing solar panels: You could effectively get free heat for your home by coupling electric heat pumps with solar. However, adding solar bumps up installation costs by over $15,000 if you install enough solar to cover all of your energy needs.
Thermostat upgrade: You can maximize your heating and cooling savings by installing a smart thermostat to control your heat pump system. This will add $200 to $400 to your total, but it could end up paying for itself in utility bill savings over time.
Insulation upgrades and air sealing: Another way to get more value from your heat pump installation is to upgrade insulation and have a company seal air gaps in your home. This can cost anywhere from $500 to $10,000, depending on how much work is involved.
Surge protection: Since heat pumps use electricity to heat and cool your home, installing a dedicated surge protection device is a good way to protect your investment. These cost just $100 to $400 and can prevent a full system replacement in the event of a power surge.
Are heat pumps worth the cost?
From a savings-to-cost perspective, heat pumps are an outstanding option and are absolutely worth it. Installing heat pumps can get expensive, but data from the Department of Energy suggests that homes with electric heat spend about half as much on utility bills as homeowners using fuel oil.
Converting from oil to electric heat by installing heat pumps could save $1,000 to $1,500 on energy costs annually, meaning a typical air source heat pump would pay for itself in just four to six years.
If it’s time to replace your existing heating and cooling system, you should consider the cost of heat pump alternatives to evaluate whether or not a heat pump is more valuable. Heat pumps can provide heating and cooling for your home and cost an average of $6,000.
The cost to replace just a boiler or furnace is around $6,500 or $4,750, respectively, and these systems only provide heat. Coupling them with a central air conditioner system would add an average of $6,000 to your costs, bringing your total to between $10,750 and $12,500 to upgrade your HVAC system.
Heat pumps come with about half the upfront costs if you’re looking for both heating and cooling. Add in the rebates and incentives available for the more efficient heat pumps, and it becomes even more worthwhile.
Finally, you should consider long-term savings. Heat pumps are about 50% more efficient than traditional heating systems, depending on the type you choose, and they will save you an average of about $1,000 a year on energy bills. Heat pumps usually last for 10 to 20 years, putting lifetime utility savings between $10,000 and $20,000.
Dan has been a solar proponent for more than a decade now, and he has been researching and writing about solar and renewable energy for the past five years. He has first-hand experience with solar conversion, and he uses that and his research to help homeowners lower their electric bills and reduce their carbon footprint through solar education and adoption. He has written for major publications, including CNN, USA Today, and EcoWatch, and he has...
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