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The average heat pump installation costs $5,800–$10,000 in 2026 for a 3-ton ducted air-source system, including equipment and professional labor. After the $2,000 federal tax credit, your net cost drops to $3,800–$8,000. A single-zone mini split runs $2,700–$5,800 installed, while a ground-source (geothermal) system costs $18,000–$35,000 before incentives.
These numbers represent national averages from contractor pricing surveys in January 2026. Your actual cost depends on system type, capacity, brand, installation complexity, your region, and whether you need electrical upgrades or new ductwork.
Quick Cost Summary
DIY installations may not qualify for the 25C tax credit in all cases. Check with a tax professional. Geothermal qualifies for the 30% Section 25D tax credit (no cap), not the 25C credit.
Cost by System Type
Ducted Air-Source Heat Pump
This is the most common type, replacing your existing furnace and AC while using your home's ductwork. Equipment cost ranges from $2,200 to $7,000 depending on brand and efficiency tier. Installation labor runs $2,500–$5,000.
Standard efficiency (SEER2 15–17, HSPF2 8–9): These meet federal minimums and ENERGY STAR thresholds but don't qualify for the maximum tax credits. Total installed cost: $4,500–$8,000.
High efficiency (SEER2 18–22, HSPF2 9.5–11+): These qualify for the full $2,000 federal tax credit and most state rebates. Variable-speed compressors deliver better comfort and efficiency. Total installed cost: $7,500–$12,500.
Cold-climate rated (SEER2 18+, HSPF2 10+, rated to −13 °F or below): Premium units from Mitsubishi, Fujitsu, Daikin, and Bosch designed for zones 5–7. Total installed cost: $8,000–$13,000.
Ductless Mini Split
Mini splits skip ductwork entirely, connecting an outdoor compressor to one or more wall-mounted indoor heads via refrigerant lines.
Ground-Source (Geothermal)
Geothermal systems exchange heat with the earth through buried pipes. The equipment itself costs $5,000–$8,000, but the ground loop installation (drilling or trenching) makes up the bulk of the cost.
Horizontal loop (trenched): Requires 400–600 feet of trench per ton. Works in large, flat yards. Total: $18,000–$28,000 for a 3-ton system.
Vertical loop (bored wells): Requires 150–200 feet of depth per ton. Works in smaller yards. Total: $22,000–$35,000 for a 3-ton system.
Open loop (well water): Uses groundwater directly. Cheapest to install but requires adequate water supply and a discharge strategy. Total: $15,000–$22,000 for a 3-ton system.
Cost by Brand
Brand premiums vary significantly. Here's what you'll typically pay for a 3-ton ducted system, installed.
Brand vs. Installer: In HVAC, the quality of the installation matters more than the brand of the equipment. A mid-range Daikin installed by a skilled, detail-oriented contractor will outperform a premium Carrier installed by a rushed crew. Prioritize contractor reputation over brand name.
Cost by System Size
Heat pump cost scales with capacity. Larger homes need larger systems (more tons = more BTUs = higher cost).
Labor Cost Breakdown
Installation labor typically represents 40–55% of the total project cost. Here's what you're paying for.
What Increases Installation Cost
Several factors can push your total well above the base price.
Electrical panel upgrade: Homes with 100A panels often need a 200A upgrade to accommodate the heat pump's 30–50A circuit. Cost: $1,500–$4,000.
New ductwork: If your home lacks ducts or the existing ductwork is severely deteriorated, new ducts cost $2,000–$5,000 for a single-story and $4,000–$8,000 for a multi-story home.
Difficult access: Second-story installations, tight crawl spaces, or attic air handler placements increase labor time and cost by $500–$1,500.
Long refrigerant line runs: Standard installations assume 15–25 feet of line set. Each additional 10 feet adds $150–$300.
Code-required upgrades: Some jurisdictions require a condensate pump, overflow switch, secondary drain pan, or seismic bracing that adds $100–$500.
Crane or rigging: Rooftop installations or tight-access properties may require a crane ($500–$1,500) to place the outdoor unit.
Real-World Example — Suburban Chicago, IL: The Park family's 2,400 sq ft colonial needed a 3.5-ton system. Their base quote was $9,200 (Bosch IDS 2.0, SEER2 18.5). Additions: electrical panel upgrade from 100A to 200A ($2,800), ductwork modifications to improve airflow ($1,200), and a Wi-Fi thermostat ($250). Final installed cost: $13,450. After $2,000 federal credit and $2,500 ComEd rebate: $8,950 net.
Cost by Region
Labor rates and market conditions vary significantly across the U.S. The same system and installation can differ by 30–40% depending on where you live.
Tax Credits and Rebates That Lower Your Cost
The effective cost of a heat pump is significantly lower than the sticker price once you apply available incentives.
Federal 25C Tax Credit: 30% of total project cost, up to $2,000 per year. Applies to qualifying heat pumps (generally SEER2 ≥ 16, HSPF2 ≥ 9.0 for ducted; SEER2 ≥ 18, HSPF2 ≥ 9.5 for ductless). Covers equipment and labor.
Federal 25D Tax Credit (Geothermal only): 30% of total project cost with no cap. A $30,000 geothermal install receives a $9,000 credit.
HEEHRA Rebates: Up to $8,000 point-of-sale rebate, income-dependent. Available in 40+ states as of early 2026.
State + Utility Rebates: Range from $500 to $16,000 depending on your state and utility. See our complete tax credits and rebates guide.
Negative net cost means the incentives exceed the project cost. Some programs cap the total rebate at the project cost; check your specific program rules.
How to Get the Best Price
Get at least 3 quotes. Pricing varies widely between contractors. We've seen quotes for identical systems range from $6,500 to $12,000 in the same market. Three quotes give you a clear picture of the fair market rate.
Ask what's included. A low quote that excludes the thermostat, disconnect, line set cover, and permits isn't actually cheap. Request itemized quotes that break out equipment, labor, materials, permits, and warranty terms.
Time your installation wisely. Spring (March–May) and fall (September–November) are the sweet spots. Contractors are less busy than during peak summer/winter demand, and many offer shoulder-season discounts of 5–15%.
Consider mid-range brands. Daikin, Bosch, and Rheem offer excellent performance at 20–30% lower cost than Carrier, Trane, and Lennox. The efficiency gap is often marginal (1–2 SEER2 points).
Stack every incentive. Federal tax credit + state rebate + utility rebate + manufacturer rebate can sometimes be combined. Your HVAC contractor should know which programs you qualify for.
Finance strategically. Many utilities and state programs offer 0% or low-interest financing for heat pump installations. Some contractor financing programs charge 12–18% interest — compare all options before signing.
Real-World Installation Cost Examples
Example 1 — Atlanta, GA (Zone 3): 1,600 sq ft ranch, existing ductwork in good condition. System: Goodman GSZC18 (3-ton, SEER2 18, HSPF2 9.5). Quotes: $5,800 / $6,900 / $8,200. Chose $6,900 middle quote. Federal credit: −$2,000. Georgia Power rebate: −$750. Net cost: $4,150.
Example 2 — Portland, OR (Zone 4): 2,200 sq ft two-story, needed duct sealing and a 200A panel upgrade. System: Daikin Fit DZ18TC (3.5-ton, SEER2 18). Base quote: $9,800. Panel upgrade: $3,200. Duct sealing: $800. Total: $13,800. Federal credit: −$2,000. Energy Trust of Oregon: −$2,500. Portland GE rebate: −$1,000. Net cost: $8,300.
Example 3 — Phoenix, AZ (Zone 2): 1,900 sq ft single-story, straightforward replacement. System: Rheem RP20 (3-ton, SEER2 20). Total installed: $7,100. Federal credit: −$2,000. SRP utility rebate: −$800. Net cost: $4,300.
Example 4 — Burlington, VT (Zone 6): 1,400 sq ft cape, no existing ductwork, chose ductless mini splits. System: 3-zone Mitsubishi Hyper-Heat. Total installed: $14,200. Federal credit: −$2,000. Efficiency Vermont rebate: −$3,000. Net cost: $9,200.
Key Takeaways
A ducted air-source heat pump costs $5,800–$10,000 installed in 2026 for a 3-ton system. After the $2,000 federal tax credit, net cost is $3,800–$8,000. State and utility rebates of $500–$16,000 can reduce your cost even further. Electrical panel upgrades ($1,500–$4,000) and new ductwork ($2,000–$8,000) are the most common cost-increasing factors. Regional pricing varies by 30–40%, with California and the Northeast at the high end. Get at least 3 itemized quotes, time installation for shoulder season, and stack every available incentive.