Cost of Heat Pump and Installation: A Complete Guide

Heat pumps are energy-efficient and can provide heating, cooling, and even hot water. These features make them a popular alternative to traditional heating and cooling systems.

Purchasing and installing a heat pump can be a significant investment, with costs varying significantly depending on location, system type, and specific home needs. Whether you’re replacing an old system or building a new one, understanding the costs can help you make an informed decision. This guide breaks down price ranges, factors that influence cost, and how to save through incentives.

Average Cost of Heat Pump and Installation In 2025

There are three types of heat pumps you can choose from, depending on your needs. The most popular type is the air source heat pump. Browse to see why.

Air Source Heat Pumps (ASHP)

• Unit price: $2,000 – $5,500
• Installed price: $4,500 – $8,500
• Best for: Most residential homes, mild to cold climates.

Ductless Mini-Split Heat Pumps

• Unit price: $1,500 – $3,500
• Installed price (per zone): $4,000 – $8,000
• Best for: Homes without ductwork or for zoned comfort.

Ground Source / Geothermal Heat Pumps

• Unit price: $8,000 – $18,000
• Installed price: $25,000 – $45,000
• Best for: Large homes, long-term efficiency, and areas with land for drilling.

Factors Affecting the Cost of Heat Pump and Installation

• Home Size and Heating Load – Larger homes require more powerful systems.

• Installation Complexity – Installations that require extensive plumbing or electrical system upgrades can increase costs.

• Size and Type – Larger units and more advanced models (such as variable-speed or cold-climate heat pumps) tend to be more expensive. Larger systems with more zones naturally cost more.

• Regional Variations – Costs can vary by location due to differences in labor costs, local incentives, and market conditions.

• Ductwork – Installation costs are lower for existing ductwork, while ductless installations require additional equipment.

• Efficiency Rating – Higher SEER, HSPF, or COP ratings, while more expensive upfront, can lower long-term energy bills.

• Climate and Location – Prices vary depending on region, labor costs, and climate requirements.

• Brand and Features – High-end models from reputable brands like Mitsubishi and Carrier are generally more expensive. Smart controls, quieter operation, and advanced defrost systems can add to the cost.

Potential Savings and Incentives

While the upfront investment may seem high, heat pumps provide:

• 20–40% lower energy bills compared to traditional gas or oil heating.
• Reduced maintenance costs with fewer moving parts.
• 15–20 year lifespan when maintained properly.

Over time, these savings often offset the initial cost.

Many governments offer tax credits, rebates, and grants to encourage heat pump adoption. For example:

• United States – Up to $2,000 federal tax credit through the Inflation Reduction Act.
• United Kingdom – Boiler Upgrade Scheme offers grants up to £7,500.
• European Union – Various national subsidies cover 20–40% of costs.

These incentives can significantly reduce the net cost of the heat pump and installation.

Additional Tips

• Get Multiple Quotes: It’s recommended to get at least three to five quotes to ensure you’re getting a competitive price.
  • “$17k isn’t unreasonable, as when I was reviewing bids, the higher-end fully communicating systems were $21k.”
  • “We got three quotes – $6745 was the lowest, highest was 14k.”
• Consider the System Type: Variable-speed and cold-climate heat pumps are often worth the investment for their efficiency and performance in extreme conditions.
  • “You want an inverter compressor that works at variable speeds.”
  • “If you’re getting a traditional heat pump that loses most of its efficiency as it gets cold, it’s cheap. If you’re getting a cold climate or a variable one, it’s expensive.”

Conclusion

The cost of a heat pump and installation depends on system type, home size, and efficiency level, etc. With available incentives and long-term energy savings, a heat pump is a smart investment in comfort and sustainability.