Heating System Guides

Consumer Buying Guides to Home Heating and Air Conditioning Systems

Cost of Heat Pump Versus Furnace

A very common question that comes up during the process of buying a heat pump, is whether it costs more money to have a heat pump system installed, than the average installation costs of a conventional gas furnace and central air conditioning system.

If you’re looking for the shortest answer, it’s No. It does not cost more to have a heat pump installed. In fact, in our 15+ years experience, the average price of heat pump installation is typically less than that of central air and a gas furnace. Of course, the detailed answer is much longer.

When we decided to write this Heating System Guide installation cost comparison, we had to determine the best way to deal with variables in equipment, technology, efficiency, and some of the common add-on equipment to the standard unit, that would affect the average price of installation. Using our 2012 Heat Pump Price Guide as a reference, We decided to use a baseline of “all else being equal”, which we’ll outline below.

Setting a Baseline to Compare Installation Costs

In order to prove you with an apple to apple comparison of installation costs, we wanted to make sure several factors were the same.

  • 2.5 Ton Condensing Unit Size
  • Average Furnace with 1200 cfm, fixed speed blower
  • Identical Duct System Used
  • Unit Installed in the Same Indoor/Outdoor Locations
  • Straightforward Installation Removing the Old, Installing New Equipment.
  • Update Gas, Electric, Venting, Drain to Current Code Standards
  • No Add-on Features like Variable Speed Blowers, Humidifier or Electronic Air Cleaners

Our average cost baseline home uses the following common scenario. 1600 square foot, single level home. The outdoor condensing unit is installed on the side of the home on level ground, and the indoor air handler or furnace is installed in the attic of the home, with a pull-down staircase to make access easier.

Installation Cost Comparison Table

System Installation Task or Parts
Heat Pump
Gas Furnace/AC
2.5 Ton 15 SEER Heat Pump Condensing Unit $1,660
Air Handler with 5kw Heat Strip (Evap Coil Inc.) $450
2.5 Ton 15 SEER AC Condensing Unit
Standard Efficiency 60k btu Gas Furnace $650
Cased Evaporator Coil
Estimated Equipment Cost $2,110 $2,250
New Outdoor Condenser Pad $35
Outdoor Disconnect Box & Electric Whip $125 $125
Electric Wiring and New Breaker for Attic Unit $125 $45
Misc Thermostat Wiring and Fasteners $25
New Programmable Thermostat $75 $75
Condensate Overflow Prevention Switch $15
Waterproof Overflow Pan for Under Unit in Attic $65 $65
Condensate Drain Lines (Primary and Overflow) $25
New 35′ Insulated Refrigerant Line-set $265 $265
Misc Copper Fittings / Brazing Supplies $25
Concentric Fresh Air and Exhaust Flue Venting
Gas Piping and Plumbing Fittings $120
Local Permits and Inspections $75 $150
System Installation Time for 2 Person Crew 4 Hours 6 Hours
Installation and Workmanship Guarantee (company charge) $1200
Estimate of Installation Cost $2,055 $2,605
**The parts and installation prices shown in the table above are only estimates based on flat rate, and wholesale equipment pricing trends. The cost may not be exact for your specific heat pump installation project. The only way to get an exact price estimate is to speak to a pro, have them assess your needs directly, and provide an exact price quote. Click here to get free competitive estimates from qualified pro’s in your area.
Total Installed Cost $4,165 $4,855

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