An HVAC or heating, ventilation, and air condition system helps maintain the temperature and air quality in your home using several components, including a furnace, ductwork, and air conditioning. HVAC installation costs can vary depending on factors such as the equipment types, home size, and project complexity.

For a standard-efficiency air conditioner and furnace with simple duct layout, you can expect an average HVAC installation cost of around $10,000–$15,000, based on market research by the This Old House team. However, if you own a larger home and want premium-efficiency equipment, total project costs can exceed $20,000. In this article, we review the typical costs of various HVAC systems commonly installed in residential homes.

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HVAC Installation Cost by Unit Type

Residential HVAC systems typically use a central air conditioner and furnace, paired with a duct system to distribute cool or warm air throughout your home. However, homeowners can also opt for heat pumps, a modern, energy-efficient alternative that can provide both heating and cooling. In regions with milder climates, a heat pump is usually enough for your heating and cooling needs all year long. However, if you live in a cold-climate region, a heat pump may require a backup furnace during the coldest days of winter.

The following chart shows typical price ranges with installation for three HVAC equipment types—an air conditioner, heat pump, and furnace—excluding the cost of ductwork. If you also need a new duct system, the average cost is around $2,000–$5,000 for a 2,000-square-foot home, but this figure can vary depending on the project complexity.

HVAC Unit	Average Price Range*
Air conditioner	$3,500–$8,500
Heat pump	$4,000–$10,000
Furnace	$3,000–$6,500

*Price ranges represent average costs for the residential HVAC industry based on our team’s market and industry research. A qualified HVAC installer can provide an accurate quote for your home.

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How Much Does Air Conditioning Installation Cost?

The cost of an air conditioner largely depends on its type and efficiency. Most homes in the U.S. use central air conditioners with ductwork, but ductless mini-splits and window air conditioners are also common options for cooling individual rooms. Below are the average installed prices of these three air conditioner types, but keep in mind these figures can vary depending on brand, equipment size, and local labor costs.

Air Conditioner Unit Type	Average Cost
Window unit	$200–$800
Ductless mini-split air conditioner	$1,500–$4,000
Central air conditioner	$3,500–$8,500

Here’s a brief description of the three main types of air conditioners:

• Window unit ($200–$800): Window air conditioners are the most affordable option, but also the least efficient. Compared with a mini-split air conditioner of the same cooling capacity, a window unit typically consumes 2–3 times more electricity. A window unit can cover an external shed or interior room that needs occasional cooling, but is not the best option for long-term use, because of its high electricity consumption.
• Ductless mini-split air conditioner ($1,500–$4,000): Mini-splits cool individual rooms in your home without using ductwork, offering an alternative to central air conditioning. Mini-splits consist of an external condenser connected to one or more indoor evaporators with refrigerant lines, with the evaporator cooling and recirculating indoor air directly. Mini-splits can offer an ideal option if your home lacks ductwork or if you need to cool a specific area. However, since mini-splits don’t provide ventilation, you may require a separate system to meet some building codes.
• Central air conditioner ($3,500–$8,500): Central air conditioning systems are the most popular cooling option in the U.S., used in 66% of homes according to the Energy Information Administration (EIA). These air conditioners provide cooling for your entire home by distributing cooled air through a duct system. Central cooling units with high efficiency ratings are more expensive, but can help homeowners save on electricity costs compared with old and inefficient systems.

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How Much Does Heat Pump Installation Cost?

A type of home heating system, you can classify most heat pumps into air-source heat pumps (ASHP) and ground-source heat pumps (GSHP), also known as geothermal heat pumps. Similar to air conditioners, ASHPs come in both central and mini-split versions. Geothermal heat pumps are usually central systems, since installing multiple small units on the same property can result in prohibitive costs.

The table below compares typical price ranges for these three types of heat pumps, based on our market research.

Heat Pump Type	Average Cost
Ductless mini-split heat pump	$2,000–$5,000
Central air-source heat pump	$4,000–$10,000
Geothermal heat pump	$10,000–$30,000

Here we compare the three main types of heat pumps used in homes:

• Ductless mini-split heat pump ($2,000–$5,000): These heat pumps are physically very similar to mini-split air conditioners, but capable of providing both heating and cooling. Since mini-split heat pumps don’t require air ducts, they are ideal for home additions or single rooms. However, note that ductless mini-split systems provide no ventilation since they constantly recirculate indoor air.
• Central air-source heat pump ($4,000–$10,000): A central heat pump combines the functions of an air conditioner and furnace. In warm and moderate climates, a heat pump can usually provide heating and cooling all year long. However, in colder climates, you may require a backup furnace for the coldest days, since ASHPs lose effectiveness when temperatures drop below 0 F.
• Geothermal Heat Pump ($10,000–$30,000): Unlike ASHPs, which exchange heat with outdoor air, GSHPs exchange heat with the ground at a depth of several feet. Since the underground has more stable temperatures than outdoor air, geothermal heat pumps can operate efficiently all year long. However, these systems require a water piping loop to exchange heat with the ground, which results in a higher upfront cost than other options.

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How Much Does Furnace Installation Cost?

You can usually classify furnaces by the main heat source. The three most common types found in homes include gas furnaces, oil furnaces, and electric furnaces. You may also find furnaces that use other fuels such as propane or wood pellets, but these are less common. Below we compare the average price to install common furnace types.

Furnace Type	Average Cost
Electric furnace	$2,000–$7,000
Gas furnace	$4,000–$10,000
Oil furnace	$6,000–$10,000

Each type of furnace has benefits and drawbacks. The best option for your home will vary depending on local fuel costs and climate conditions. Here are more details about the main types of furnaces:

• Electric furnace ($2,000–$8,000): Electric furnaces are usually the most affordable option since they don’t require a fuel supply line and exhaust system. However, these furnaces use resistance heating, consuming 2–4 times more electricity than a heat pump of the same capacity. Electric furnaces are best suited for moderate climate zones with minimal heating needs, or as backup for a more efficient heat pump.
• Gas furnace ($4,000–$10,000): These furnaces connect to the local gas distribution system, eliminating the need for regular fuel deliveries. Gas furnaces have lower operating costs than electric furnaces in most U.S. regions, based on our research. However, they generate combustion gases that must get properly vented to ensure safety.
• Oil furnaces ($6,000–$10,000): Oil furnaces operate by burning heating oil instead of natural gas, which can prove cost-effective in regions such as the Northeast. However, these furnaces rely on oil deliveries, which is less convenient than using a utility service such as gas or electricity. Also, an oil furnace generates more carbon pollution than a gas furnace of the same capacity.

Furnace Costs by Brand

Our team conducted an in-depth assessment of various furnace manufacturers. Based on our review methodology, we compiled the following list of the top five furnace brands nationwide and typical prices.

Furnace Brand	Average Price Range
Carrier	$3,000–$15,000
Lennox	$3,100–$10,000
Bryant	$3,500–$6,000
Trane	$3,500–$15,600
Amana	$3,600–$11,000

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What Factors Affect HVAC Installation Cost?

In the previous sections, we discussed the average cost ranges for common types of HVAC equipment. However, actual installation costs can vary widely based on factors such as home size, equipment efficiency, and ductwork requirements. Local building codes and permitting requirements can also influence HVAC installation costs. Learn more in the following sections.

Equipment Capacity

The two main factors that determine the required capacity of your HVAC equipment are your home size and local climate conditions. According to the U.S. Department of Energy (DOE), residential homes require a cooling capacity of at least 20 British Thermal Units per hour (BTU/h) per square foot. Residential heating needs are usually higher, ranging from 30–50 BTU/h per square foot depending on the climate. Based on these figures, a 2,000-square-foot home would require a cooling capacity of at least 40,000 BTU/h and a heating capacity of at least 60,000 BTU/h.

Keep in mind these figures represent estimates calculated by our team. Professional HVAC installers use the Air Conditioning Contractors of America (ACCA) Manual J: Residential Load Calculation to determine the exact heating and cooling requirements of homes and other residential buildings.

Equipment Efficiency

HVAC equipment is available in various efficiency tiers. The most efficient equipment is usually the most expensive upfront, but has the lowest operating costs over time. Each type of HVAC equipment uses a different efficiency metric:

• Standard furnaces have an Annual Fuel Utilization Efficiency (AFUE) of 80%, which means they convert 80% of fuel energy into effective heating. The most efficient furnaces achieve AFUE ratings of 95–98%.
• Air conditioners and air-source heat pumps in cooling mode use an efficiency metric called the Seasonal Energy Efficiency Ratio (SEER), which is similar to the gas mileage value of a vehicle. For example, a 20 SEER rating indicates that an air conditioner delivers 20,000 BTU of cooling per every kilowatt-hour of electricity consumed.
• Heat pumps in heating mode use the Heating Seasonal Performance Factor (HSPF), which is similar to the SEER but applied to heating.

While these metrics can seem confusing at first, there’s a simpler way to identify high-efficiency equipment. You can look for the ENERGY STAR label, which certifies that a product has been successfully tested for efficiency, meeting the requirement of the Environmental Protection Agency (EPA).

Ductwork Requirements

Central air conditioners, heat pumps, and furnaces depend on ductwork to distribute cool or warm air throughout your home. The cost of a new duct system can range from less than $2,000–$10,000 or more depending on factors such as your home size, duct material, and system complexity. If you need a duct replacement along with your new HVAC unit, it can significantly increase your total project cost.

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How To Save on HVAC Installation Costs

To save on HVAC installation costs, we recommend comparing project quotes from multiple installers. There are many HVAC options with different features and efficiency ratings and settling for the first quote could result in missing out on better options. When requesting quotes from HVAC installers, ask for a detailed breakdown with itemized prices so you know exactly what you’re purchasing.

ENERGY STAR-certified HVAC units are more expensive, but often qualify for federal and state incentives, including a federal tax credit. Additionally, efficient heating and cooling equipment can save you thousands of dollars in energy bills over time, offsetting the higher upfront cost. The ENERGY STAR program provides a detailed guide covering federal incentives for efficient HVAC equipment, including a federal tax credit of up to $2,000 for heat pumps and up to $1,200 for furnaces and air conditioners.

Depending on your location, you may have access to additional incentives from local governments or utility companies. For state-specific HVAC incentives, you can search the Database of State Incentives for Renewables and Efficiency (DSIRE).

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When Should You Repair or Replace Your HVAC System?

Like any piece of mechanical equipment, HVAC systems can suffer performance issues or breakdowns, especially without receiving proper maintenance over time. While you can often fix minor problems with repairs, a complete replacement may present a better option if your equipment shows severe damage or frequent malfunctions. If your heating or cooling system is giving you trouble, a qualified HVAC technician can assess the situation and recommend the best course of action.

Signs You Should Repair Your HVAC System

Central air conditioners and heat pumps have a typical lifespan of 10–15 years, while furnaces can last for around 15–20 years. Considering this longer lifespan, repairs are viable if your HVAC unit is relatively new and only experiencing minor issues. Here are some examples of minor HVAC issues that homeowners can usually get repaired:

• Minor loss of heating or cooling capacity
• Unusual noises
• Frequent cycling
• Thermostat malfunctions
• Reduced airflow

Signs You Should Replace Your HVAC System

If your HVAC units are very old or severely damaged, a replacement may end up being more cost-effective than attempting repairs. Also, a new HVAC system can improve your home’s comfort and energy efficiency. Here are some signs you may have to replace your air conditioner or space heater:

• Frequent breakdowns
• Severely damaged components
• Major loss of heating or cooling capacity
• Excessively high energy bills
• Your equipment is more than 15 years old

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Are HVAC Installation Costs Worth It?

While the cost of installing an HVAC is expensive upfront, you can achieve multiple benefits from doing so. HVAC systems help provide a comfortable home environment, and can protect you from extreme outdoor temperatures during severe weather conditions. If you have an old HVAC system that breaks down frequently, we recommend looking for a replacement before the next summer or winter season. HVAC technicians are often in high demand during these times, and an emergency replacement can end up costing much more than a planned upgrade.

A complete HVAC system can cost around $10,000–$15,000, or even more than $20,000 if you select premium-efficiency equipment. However, high-efficiency air conditioners and space heaters often qualify for federal and state incentives, which can help offset the upfront cost, and offer utility savings over time. According to the Department of Energy, you can save 10%–30% on heating and cooling with ENERGY STAR-certified equipment. When replacing equipment that is very old or inefficient, you can achieve energy savings in the range of 50%–70%.

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FAQs About HVAC Installation

How much does HVAC system replacement cost?

HVAC replacement costs vary widely depending on equipment type, home size, and project complexity. On average, a complete HVAC system with an air conditioner and space heater can cost $10,000–$15,000. If you select premium-efficiency units from leading HVAC brands or a geothermal heat pump system, total project costs can exceed $20,000–$25,000.

How is HVAC labor cost calculated?

When calculating labor costs, HVAC installers consider multiple factors such as project complexity and additional work required. For example, if you need to replace ducts or remove damaged equipment, you can expect a higher quote. Labor rates also vary by location, and you can expect higher costs in large cities with high demand for HVAC technicians.

What size HVAC system do I need for a 2,000-square-foot house?

Residential homes typically require a 3–5 ton HVAC system, based on our team’s calculations. However, this is just an estimated range. Only a qualified HVAC contractor can determine the exact heating and cooling capacity required for your home.

What is the most expensive part of an HVAC system?

The compressor is the most expensive component of an air conditioner or heat pump, while the heat exchanger is the most expensive part of a furnace. In high-efficiency systems, a new compressor or heat exchanger can cost over $3,000. When comparing HVAC offers, make sure these parts include a solid warranty so you have coverage if certain issues occur.

To share feedback or ask a question about this article, send a note to our team at reviews@thisoldhousereviews.com.