Heat pump vs. AC cost
Heat pump vs. AC cost
$3,800 – $8,200+ average heat pump cost installed
$2,500 – $7,500 average AC unit cost installed
Heat pump vs. air conditioner cost
When it comes to keeping your home comfortable throughout the year, understanding the difference between heat pumps and traditional AC systems is crucial, especially when considering costs. In this guide, we'll break down everything you need to know about the financial aspects of both systems so you can make an informed decision for your home.
| Feature | Heat pump | Traditional AC |
|---|---|---|
| Average initial cost (unit + installation) |
$3,800 – $8,200+ | $2,500 – $7,500* |
| Operating cost | $40 – $160 per month | $80 – $200 per month |
| Annual maintenance cost | $120 – $360 | $70 – $200 |
| Average repair cost | $150 – $650 | $150 – $650 |
| Federal tax credits | Up to $2,000 | Up to $600 |
| Lifespan | 15 – 20 years | 15 – 20 years |
| Approximate payback period | 5 – 10 years | 8 – 12 years |
*Homeowners normally pair air conditioners with a furnace for heating, increasing the total cost to heat and cool the home.
Initial purchase and installation cost
A heat pump costs $4,000 to $12,000 installed on average, while a traditional AC unit costs $2,500 to $7,500 installed. However, while most heat pumps have a higher upfront cost compared to traditional air conditioners, they provide both heating and cooling functions, potentially eliminating the need for a separate heating system.
When pairing an AC unit for cooling with a furnace for heating, the total cost of an HVAC system is $5,000 to $11,000.
Heat pump vs. AC monthly cost
Heat pumps have higher energy efficiency and offer lower operating costs, $40 to $160 per month on average. In moderate climates, homeowners may save 30% to 50% on their heating and cooling costs with a heat pump compared to separate systems. These savings add up significantly over the system's lifetime.
Traditional AC units are less expensive up front but often have higher operating costs, averaging $80 to $200 monthly. These systems only cool your home, so you'd need a separate heater for year-round comfort. This two-system approach consumes more energy overall, especially if your furnace runs on oil or gas.
| System type | Cost to run |
|---|---|
| Heat pump | $40 – $160 per month |
| AC | $80 – $200 per month |
Maintenance costs and system longevity
Both heat pumps and traditional AC systems require regular maintenance to operate efficiently and maximize their lifespan. However, there are some differences in maintenance requirements and costs.
Heat pumps generally require maintenance twice a year since they operate year-round. A heat pump tune-up visit costs $70 to $200 on average, with many companies offering annual maintenance plans for $120 to $360.
Traditional AC systems need maintenance once a year. AC tune-up visits cost $70 to $200 but remember that your furnace will also need annual maintenance.
Heat pump repairs and AC repairs cost about the same for minor issues. Repair technicians charge $75 to $150 per hour, plus the cost of parts.
When properly maintained, both systems have similar lifespans. Heat pumps typically last 10 to 20 years, while air conditioners have a similar lifespan. Gas furnaces often last 15 to 30 years, potentially giving the AC and furnace combination a slight edge in longevity for the heating component.
Energy source and utility rates
The cost comparison between heat pumps and traditional ACs depends heavily on local utility rates.
Since heat pumps run exclusively on electricity, they make financial sense in areas with relatively low electricity costs or homes with a renewable energy source like solar panels.
If you live somewhere with high electricity rates but low natural gas prices, a gas furnace with a traditional AC might result in lower operating costs.
Some utility companies offer special time-of-use rates or incentives for electric heating and cooling, which can make heat pumps more economical. Check with your local utility provider about any programs that might reduce your costs.
Energy ratings and your wallet
For cooling, both heat pumps and air conditioners use SEER (Seasonal Energy Efficiency Ratio) ratings. Higher SEER ratings indicate better efficiency, resulting in lower operating costs and reduced environmental impact.
Both modern heat pumps and air conditioners have SEER ratings of 13 to 22+.
Each point increase in efficiency rating typically adds 8% to 10% to the purchase price but reduces operating costs by a similar percentage.
Incentives and rebates
The financial picture wouldn't be complete without considering available incentives. Federal tax credits, state rebates, and utility company programs can significantly reduce the cost of your new system.
Heat pumps qualify for federal tax credits of up to $2,000, while high-efficiency air conditioners may qualify for credits up to $600.
In addition to the federal Energy Efficient Home Improvement Credit, many states and utility companies offer their own incentives for energy-efficient heating and cooling systems.
Before making your final decision, research all available incentives in your area. The Database of State Incentives for Renewables & Efficiency (DSIRE) is a good starting point for this information.
Return on investment timeline
When weighing heat pump vs. AC costs, consider how long you plan to stay in your home. The payback period for a heat pump's higher initial investment through energy savings typically ranges from 5 to 10 years.
If you plan to live in your home for less than five years, the lower upfront cost of a traditional AC system might make more financial sense. However, a heat pump could increase your home's resale value, potentially offsetting some of the initial investment.
For long-term homeowners, heat pumps often provide better overall value through energy savings, especially in regions with moderate heating and cooling needs.
Environmental costs
While not directly related to your wallet, environmental considerations may influence your decision. Heat pumps generally have a lower carbon footprint, especially if your electricity comes from renewable sources.
Additionally, as energy regulations evolve, more efficient systems like heat pumps may become the standard. Investing in a heat pump now could future-proof your home against potential regulatory changes or rising fossil fuel costs.
Additional AC and heat pump cost factors to consider
When comparing heat pump vs. AC costs, consider these additional factors:
Existing system: The size and location of your existing heating and cooling system will impact the total installation cost. Converting from an AC and furnace to a more efficient heat pump may require additional steps to retrofit the new unit, such as upgrading the electrical panel.
Type of heat pump: While ducted air-source heat pumps are the most common, there are several other types of heat pumps with varying installation costs:
A ductless heat pump costs $2,000 – $17,000 installed on average, while a ductless mini-split AC system costs $3,000 to $10,000+, depending on the number of zones. Ductless heat pumps cost more but offer better air quality and efficiency.
A geothermal heat pump costs $15,000 to $35,000 installed, but it lasts longer and costs 25% to 65% less to run than an air-source heat pump.
Ducts: The cost to replace ductwork is $25 to $55 per linear foot or $1,400 to $5,600 total on average if all your home's ducts need replacing. If your home doesn't have existing ducts, ductless heat pump or mini-split systems may be the most cost effective in the long run.
Climate: The cost-effectiveness of heat pumps vs. AC units can vary depending on your local climate:
Heat pumps are often more efficient and cost-effective in moderate climates, as they may require backup heating systems in very cold regions.
A traditional AC and furnace combination may be more suitable for very hot summers and extremely cold winters.
FAQs about heat pumps and AC systems
Do heat pumps really save money in the long run?
In moderate climates, heat pumps save money over time through reduced energy consumption. While they cost more up front, the typical homeowner sees enough savings in energy bills to recover the additional investment within 5 to 10 years on average.
Are heat pumps effective in very cold climates?
Modern heat pumps have improved significantly and can work efficiently at very cold temperatures. For extremely cold regions, cold-climate heat pumps or dual-fuel systems (heat pump + furnace backup) are the best solution. However, these combinations cost more, so a traditional HVAC system may be more cost effective.
Can I install a heat pump if I currently have a traditional AC system?
Yes, many homes can be converted from traditional AC/furnace combinations to heat pump systems. The complexity and cost of conversion depend on your existing ductwork and electrical service.
Will a heat pump or AC system add more value to my home?
Both systems add value, but heat pumps may add slightly more than AC systems, especially in eco-conscious housing markets. The all-in-one nature of heat pumps and their energy efficiency make them attractive features for many homebuyers.
Getting estimates for a new heat pump or air conditioner
When deciding between a heat pump and a traditional AC system, there's no one-size-fits-all answer. The most cost-effective option depends on your specific circumstances including local climate, energy prices, available incentives, and how long you plan to stay in your home.
When searching for a licensed HVAC professional near you who is qualified to determine the ideal system type and size for your home and needs, make sure to:
Look for NATE or ACCA-certified technicians who have a solid track record of successfully installing heat pumps and AC systems.
Get at least three estimates with similar details from different installers, so you can compare apples to apples.
Read their online reviews on websites like HomeGuide and Google.
Hire an installer who is insured, bonded, and has been in business for 5+ years.
Request a written contract and any applicable warranties or guarantees before the work begins.
Avoid making large upfront payments. Instead, establish a payment schedule with the contractor based on work completed as installation progresses.
Questions to ask an HVAC professional
Asking the right questions can help you choose the best and most qualified pro for your heat pump or AC system installation:
Are you licensed, bonded, and insured?
How many years of experience do you have in professional heating and cooling system installation?
Which unit would be more cost effective for my home?
What size heat pump or AC unit do you recommend for my home?
What brands do you carry, and can you help me choose between them?
Do you recommend any accessories or upgrades to improve the system's energy efficiency?
Do I need to do anything to prepare for the day of installation?
Do you handle the permitting process, and are those fees included in the estimate?
Can you provide a breakdown of all the costs that make up the estimate?
What warranty do you include with the installation?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.