How Much Does a Heat-Pump Cost to Replace? 10 Influential Factors

How Much Does a Heat-Pump Cost to Replace? 10 Influential Factors
Heat Pump

How Much Does a Heat-Pump Cost to Replace? 10 Influential Factors

Arne Jacobsen

I have been in heating and air conditioning trade for 44 years. In that time, I have installed, serviced, designed ductwork, sold, and sized thousands of residential heating and cooling systems.

Has your heat pump heating and cooling system broken down and the repair costs are too high? Maybe you are trying to be proactive in replacing your heat pump heating and cooling system because it is older or inefficient. Are you looking for price ranges of heat pump replacement and not able to find them?  Do you feel like the salespersons aren’t listening to your needs or wants?  That can be an overwhelming task. There are many factors built into those costs. Knowing those factors will help you make a wise decision on a heat pump system that will keep you comfortable, operate properly, and be within your budget.

Factors that can affect the cost of a heat pump replacement

  • Common items included in a heat pump replacement
  • What a Good Contractor will do
  • Utility and manufacture rebates and Department of Energy Tax Credits
  • Electrical requirements
  • Ductwork Modifications
  • Condensate drainage
  • Equipment match up
  • Capacity
  • Efficiency
  • Financing

Common items included in a heat pump replacement

Typically included in the replacement of your new heat pump system is:

  • base efficiency heat pump (See Efficiency factor below)
  • indoor air handler or evaporator coil
  • outdoor pad, electric disconnect
  • electric conduit from disconnect to the new heat pump
  • new line set
  • 15 feet of drain line
  • labor
  • Snow legs
  • local permits.        

Common heat-pump installation items

What a Good Contractor Will Do

When choosing a company like Fire and Ice Heating & Air Conditioning to replace your existing heating and/or air conditioning system, the installation process is the single most important step for the safety and life expectancy of the system. Day 1, in the life of your new furnace/AC or heat pump is the single most important day!

Several key processes must be followed and adhered to for the efficiency, comfort, safety and life expectancies of the equipment.

 Failure to comply with any of the necessary processes required by local codes, the manufacture, and industry standards can only lead to high energy bills, discomfort, and a drastically shortened life expectancy of the equipment. (insert link to “what is involved in the installation process when replacing existing Heating and/or Air Conditioning systems on our website)

Utility, Manufacturer Rebates, and Department of Energy Tax Credits

Utility Rebates

Local utility rebates may be available for you on multiple types of furnaces, air conditioners, air handlers, and heat pumps, some of which include full system installs.

At Fire and Ice Heating and Air Conditioning, our association with local utility companies allow us to offer these rebates on our equipment replacement proposals.

Manufacturer Rebates

Product manufacturers occasionally offer product rebates. These rebates are usually for full system installs and require a new thermostat to be installed with the system.

Fire and Ice Heating and Air conditioning includes a thermostat with every system we install. These digital programmable thermostats can also save on energy usage with their set back capabilities.

Tax Credits

Energy Tax Credits may be available on certain energy efficient rated heating and cooling products. Always consult with your tax consultant. These ratings are generally increased with the purchase of a full system at the same time as the heat pump.

Electrical requirements

The electrical cost modifications, if needed, can be for the update of the control wiring that goes from your new thermostat to the new heat pump and air handler.

 The high voltage wiring or the breakers at the electric panel that serve the new air conditioner or heat pump may need to be updated or resized. Occasionally this high voltage work requires a state-licensed Electrician.

Additional costs for these items can range from $100.00-$600.00.

Ductwork Modifications

Ductwork modifications can be for any existing ductwork installed that is not sized properly for correct airflow requirements. All Comfort Consultants that visit your home should perform a duct analysis to determine if the existing ductwork is sized properly for the heating and cooling capacity(See Capacity article below) required.

Improper ductwork size can cause hot /cold spots throughout your home, decrease the longevity of the heating and cooling system, and increase operating costs.

Condensate drainage

When a heat pump runs in the cooling mode one of its functions is to remove moisture during the summertime. This moisture is condensed into water that needs to drain off.

In most homes, the excess water drains to a floor drain, sump pump, or approved standpipe.

In some cases, these methods can’t be used because of obstructions in the way of the drain piping. In these cases, a condensate pump would be required to pump it away from the obstruction and over to the proper drain.

Condensate pumps cost approximately $370.00

Equipment Match Up

Occasionally, you’ll need to replace your existing indoor furnace or air handler. Estimated cost range ($3300.00-$7025.00).

This replacement may be needed if you decide to install a variable speed or 2-stage heat pump.

Variable speed and a 2-stage heat pumps require multiple speed indoor blower motor operation or a special control application for the way the communication works between the heat pump, air handler or furnace, and thermostat.

Although this may mean an additional cost to the replacement, it usually means you’ll see other benefits like more comfort levels, added energy cost savings, and longer-lasting equipment life.


The capacity of the air conditioning portion of the heat pump is determined by performing a Manual J load calculation of the home.

This calculation takes the square footages of the home’s walls, floors, ceilings, windows, doors, and other factors to come up with the total heat gain (cooling gain/BTU) the house has.

An example would be: 36,000 BTU heat gain / 12,000 BTU per ton= 3 ton capacity. Most homes are within 2-5 ton cooling capacity range depending on where in the country the home is located and other factors.

The heating capacity needed for your home, also calculated in the Manual J, will determine the capacity size of your air handler, evaporator coil, or furnace.

The replacement cost can increase as you go up in capacity. State licensed heating contractors like Fire & Ice Heating & Air Conditioning will perform this calculation on your home every time.


A consideration in purchasing your new heat pump is the efficiency rating or SEER rating (Seasonal Energy Efficiency Ratio) on the cooling portion of your heat pump.

This rating can be compared to miles per gallon in a car. Heat pumps can have a SEER rating of 14-20+SEER.

Usually, as the SEER rating increases in efficiency, the initial purchase cost will increase somewhat, however, your heating and cooling operating costs will be lower at the higher SEER levels. By doing so you can realize your return on your investment within the life span of the equipment.

Another consideration in purchasing your new heat pump would be the HSPF (Heating Seasonal Performance Factor) rating. This rating determines the efficiency of the heat pump’s heating capabilities. Older heat pumps can have an HSPF rating of around 7. Newer heat pumps will have HSPF ratings of 8.2 or higher.

The highest efficient heat pumps typically have an HSPF rating of 9.0 or higher.

Heat-Pump Efficiency Ratings and Savings

The cost of replacement for a heat pump only in a residential application can range between $4,960.00-$12,570.00 plus any modifications if needed.

Financing is available

If you are interested in extending your payments out longer, there are many financing options available for you with approved credit. This can include no interest if paid in full, O% APR with equal monthly payments, or special reduced rate plans. Partial payment of cash/check and balance with financing can be an option as well. Multiple finance options can help these purchase stay within your budget

Second look plans are available for customers with less than desirable credit scores.

Learn About Our Financing Options

There are many factors to look at when you are costing the replacement of your heat pump. This includes the capacity, efficiency, ductwork modifications, electrical modifications, condensate drain, or other equipment changes that may be needed.

At Fire and Ice Heating and Air Conditioning, we have the team to help you determine the right product for you, your home, and your budget. From our professional administration, sales, installation, and service staff you will be 100% satisfied.

“Your Trust is our Business” and “We do it right the first time or we don’t do it”.

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