Heat Pump Replacement Cost

May 23, 2024
A newly installed outdoor HVAC system

A heat pump heats and cools your home without using fossil fuels like traditional furnaces, making it an eco-friendly option to keep your home comfortable. Instead of using fuel, it pulls energy from the air to heat and cool your home’s air. 

While it’s a significant investment in your home, it keeps you and your family comfortable in hot and cold weather.

Heat pumps eliminate heat from indoor air to cool it in the summer and pump warm air into your home in colder months. They use electricity and refrigerant when transferring heat, but they use less energy because they do not use fossil fuels, which may lower your utility costs.

The cost of replacing a heat pump can be high, but there are ways to keep the costs down and make the purchase more affordable if you prefer this style of heating and cooling over central air conditioning and a traditional furnace.

Here’s everything you need to know about heat pump replacement and related costs.

Table of Contents

Average Heat Pump Replacement Cost

The average heat pump replacement cost varies depending on the type of heat pump you choose and any extra work required to install it. Prices can range from $10,000 to $20,000, but the average homeowner pays $10,750.

A large factor in determining the cost is the weather in your area. Some heat pumps, such as air-source pumps, don’t do well in very cold temperatures, which are typically the most affordable.

If you live in a very cold climate, you may need a geothermal heat pump, a costlier option that requires excavation and special permits, increasing the cost.

Cost Breakdown of Different Types of Heat Pumps

When choosing the best heat pump for your house, consider your budget and goals. If your budget is the largest concern, you’ll focus on lower-cost air-source heat pumps to keep it affordable. 

However, if you’re more concerned about  energy efficiency, you should consider geothermal or solar heat pumps which have a higher cost, but are the most energy efficient.

Air Source Heat Pumps

Average cost: $3,000 – $11,000

Air-source heat pumps provide as much as three times the heat energy than the electrical energy they supply. This is because they don’t use fuel like a traditional furnace. Instead, they transfer heat rather than convert it.

An air-source heat pump uses refrigerant and has a compressor and coils (one inside and one outside). When the heat is on, the outside coil’s refrigerant takes heat from the air and evaporates it into a gas. 

The indoor coil then sends the heat into the house when it condenses back to a liquid. To use the air-source heat pump for cooling, you turn on the reversing valve to change the direction of the refrigerant flow.

Dual-Fuel Heat Pumps

Average cost: $3,000 – $13,700

If you live in an extremely cold climate and don’t want the large investment of a geothermal heat pump, a hybrid dual-fuel heat pump may be the answer. This system has heat pump characteristics with a traditional furnace ‘backup.’

During the summer, the heat pump pulls hot air out of your house to reach a comfortable temperature. In the cooler months, usually spring and fall, it works like an air-source heat pump to deliver heat to the home.

However, the traditional furnace takes over in very cold temperatures, converting fuel to heat. The benefit of the hybrid system is that you don’t need a separate AC unit to cool the house in the summer, but you can have peace of mind that the house will be warm enough in frigid temperatures.

With this type of unit, you get the best of both worlds, enjoying energy efficiency whenever possible, but knowing you have a backup should the weather take a turn for the worse.

Ductless Mini Split Heat Pumps

Average cost: $1,500 – $8,000

Like traditional ductless mini-split air conditioners, ductless mini-split heat pumps are lower-cost but most suitable for smaller houses. They work well for zoning specific rooms if they need more heating or cooling than others or in homes with an addition where the ductwork doesn’t extend.

Ductless mini-split heat pumps send refrigerant through interior lines to the ‘zones’ you have set up with indoor handling units. Each unit connects to a single outdoor unit, and each zone has its own thermostat.

Since mini-splits don’t have ducts, they reduce the risk of energy loss, which, according to the Department of Energy, accounts for 30% of energy consumption with traditional heating and cooling systems.

The key with mini-split heat pumps is to ensure you have the proper-sized handlers and that they are in the right location for optimal efficiency. Otherwise, you risk short cycling, which wastes energy and doesn’t keep the home at the desired temperature.

Ground Source (Geothermal) Heat Pumps

Average cost: $5,000 – $20,000

Geothermal heat pumps, which use the Earth as a heating and cooling source, have been in use since the 1940s. They capitalize on the stable temperatures below ground versus the variable temperatures we see where we live. The air below ground is cooler than the air above ground in the summer and warmer in the winter.

Geothermal heat pumps have a lifespan of 50+ years on the parts below ground and 24+ years on the above-ground parts. Because they require a lot of space and ground excavation, they cost the most, but according to the Department of Energy, you’ll see a return on those costs in energy savings over the first five to ten years.   

Heat Pumps Pros and Cons

Like any home improvement or appliance replacement, heat pump replacement has pros and cons.

Pros:

  • No gas: Gas furnaces are more convenient because they provide faster heat but are also dangerous for homes. A gas leak can put your house and household members at risk. It also uses an energy source that isn’t environmentally friendly.
  • Low noise level: Heat pumps have relatively low decibel ratings, with an average of 60 decibels, or the equivalent of normal talking or quiet rainfall. The low noise level keeps noise pollution down and is also a sign that you aren’t wasting energy.
  • Handles both hot and cold air: Despite their name, heat pumps dispel hot and cold air, keeping your home comfortable in all seasons. You don’t need two separate systems as you would with a furnace and AC unit.
  • Environmentally friendly: Heat pumps expend less energy and avoid using fossil fuels, decreasing your carbon footprint and helping the Earth.

Cons:

  • Large investment: Heat pumps are a significant upfront investment with an average cost of over $10,000. When installed and used properly, they can decrease your energy costs, but it can take many years to recoup the cost.
  • Reliance on electricity: Heat pumps require electricity to run. Overall, this is a good thing because it doesn’t use fossil fuels. However, if you live in an area with frequent power outages, keeping your home at a comfortable temperature could be hard.
  • Doesn’t work in very cold temperatures: If your climate gets very cold, a heat pump may not be able to keep up, keeping your home warm enough. Homeowners in cold temperatures typically need a hybrid system to warm their homes.

Repair vs Replace

When your heat pump stops working, you must decide if you should repair or replace it. Like traditional HVAC systems, some repairs aren’t worth it because of their cost or the short length of time they will fix the issue.

Signs You Need a Heat Pump Replacement

  • You had your heat pump repaired within the last year, and it isn’t working again
  • Your energy bills have spontaneously increased
  • Your heat pump doesn’t keep your house consistently warm or cool
  • The heat pump is 15 or more years old
  • The heat pump leaks refrigerant

How to Decide to Repair or Replace Your Heat Pump

Determining whether to repair or replace a heat pump is a big decision. If you are on the fence, here are some things to consider:

  • What’s the cost of the repair versus the heat pump replacement cost?
  • How long do you plan to stay in the home?
  • How old is the heat pump?
  • Is your heat pump under warranty, or did it expire?
  • Does your current heat pump keep your home at a comfortable temperature?

Heat Pump vs Furnace

The choice between heat pumps and furnaces is a big decision. Here’s what to consider.

  • Is a heat pump within your budget? Heat pumps cost more than furnaces, so determine your budget to see which fits better. The energy savings will lower your cost, but it may take several years to recoup.
  • Is safety a concern? Gas furnaces can be dangerous, especially if you don’t have a carbon monoxide monitor in your home.
  • Is your climate very cold? Heat pumps often cannot keep up in frigid temperatures, so your house may not reach the desired temperature if you live in an extremely cold climate.

There isn’t a cut-and-dry answer regarding whether a furnace or heat pump is better. It depends on your individual circumstances, including your budget, temperature needs, and desire for energy efficiency.

Factors Influencing Heat Pump Replacement Cost

Understanding the factors affecting heat pump replacement cost can help you determine if they fit your budget and what you should look for in one.

Type of Heat Pump

Of course, the type of heat pump matters and is the largest factor in its cost. Ductless mini-splits are the most affordable but may not be the best fit for large houses. Air-source pumps are the middle of the road and most affordable for the average homeowner, whereas geothermal is the most expensive and out of reach for many homeowners.

Size and Capacity Required

The larger your house is, the more space you have to heat or cool, which means a larger heat pump. They come in sizes of 2 to 5 tons, and the average 2,000-square-foot home needs a heat pump of at least 5 tons to be efficient.

Efficiency Ratings and Energy Star Rating

Like furnaces, heat pumps are rated on their energy efficiency. The more energy-efficient a unit is, the higher its upfront cost. To determine a unit’s energy efficiency, look at its Heating Seasonal Performance Factor and Seasonal Energy Efficiency Ratio. On average, you should look for an HSPF rating of 8 to 10 and a 12 to 14 SEER value.

Duct Installation

Unless you choose a mini-split ductless system, a heat pump needs adequate ductwork to heat or cool your home. Installation of ductwork costs an average of $1 to $6 per square foot. If you already have ductwork but it requires cleaning or maintenance, it could also increase your cost.

Installation Fees

Heat pump installation is best left to the HVAC professionals. On average, they charge $75 to $150 per hour, taking up as much as 40% of your heat pump budget. The exact labor costs depend on the type of unit and the work required. A geothermal unit, for example, takes the longest and has the most extensive work, whereas a ductless mini system can be installed in a few hours.

Permits

Most cities and counties require a permit to install a heat pump. A basic building permit is needed for standard heat pumps, but if you need to excavate land, you may need more permits. The cost is usually $100 or so per permit, so it’s not a huge expense, but it can be a hefty penalty if you don’t oblige.

Maintenance Costs

The key to a properly running heat pump is regular maintenance. Include this cost when budgeting for a heat pump to ensure you can afford the ongoing maintenance. The annual maintenance cost usually runs $75 to $300 annually, and the average repair costs $400, but those are periodic and not necessarily every year.

Like a furnace, keeping up with regular maintenance ensures a heat pump runs efficiently and doesn’t prematurely break down. When problems are caught early, you can prevent other issues from happening that could cost more money or cause premature failure.

Cost Savings and ROI

It’s no secret that a heat pump is a hefty investment, but the cost savings over time can give you a decent ROI.

According to the Department of Energy, homes with an average air-source heat pump save around $300 monthly on utilities. Of course, your location and the temperatures you set determine the actual savings.

Homeowners with older heating units or those who use propane or heating oil save the most when switching to a heat pump. You can increase the cost savings by also ensuring optimal insulation in your home. This may even allow you to purchase a smaller heat pump because you need less heating power when the home has high-quality insulation.

Pro Heat Pump Installation vs DIY Installation      

Even if you are extremely handy, DIY heat pump installation is never recommended. While you may save thousands of dollars on the cost of installation, you run the risk of the pump not working properly and damaging your home.

To install a heat pump, you must thoroughly understand HVAC, electrical work, and refrigerant. Labor costs are a big part of the cost, but they are probably the most important part of the process.

Conclusion

Heat pump replacement can be a costly investment, but it pays off in many ways. They help you save money on your energy bills and also do your part to keep the environment safe while ensuring your home’s safety.

There are many options for heat pumps, allowing you to find the one that fits your budget while ensuring your home’s comfort. Hiring a professional for heat pump installation is crucial to ensure it’s properly installed and runs efficiently, keeping your home comfortable.

FAQs

How often should a heat pump be replaced?

Traditional heat pumps (not geothermal pumps) last an average of 10 years. How long a unit lasts depends largely on its size, brand, and how well it’s maintained, but expect to replace your heat pump every decade.

What can I replace a heat pump with?

You can replace your heat pump with another similar heat pump or move to a geothermal pump, which pulls air from the ground, giving you a more eco-friendly option that may save you money on energy bills.

Can you replace a heat pump without replacing an air handler?

It’s typically best to replace the heat pump and air handler so you know they are compatible. If uncertain, talk to your HVAC professional about the best option.

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