How Much Does It Cost To Install A Heat Pump System [2023]?

On average, homeowners in Pennsylvania, New Jersey, Maryland, or Delaware pay between $6,000 and $15,000 for a ducted, air-source heat pump system installation in 2023. But, there are many other types of heat pumps available, and many factors that affect that amount.


It’s possible to pay up to $40,000 for the most energy-efficient models, for instance. But, you’ll save money with a heat pump in the long run thanks to its energy efficiency. And, in many cases, they add value to your home.

In this article, I’ll walk you through installation cost for a heat pump in a mid-Atlantic home. You’ll learn the different types of heat pumps, installation requirements, and ways to reduce your expenses.

To write this, I’m using my nearly 15 years of experience as a product manager for Peirce-Phelps, a nationally-recognized HVAC distributor Peirce-Phelps. I specialize in high-efficiency equipment like heat pumps,. And, I work closely with dozens of local HVAC contractors who have installed thousands of these systems across the region.

If you have more questions after reading this, use our dealer locator to schedule a free consultation from a certified HVAC installer who’s worked for years in your area.


Factors That Affect How Much You Should Pay For A New Heat Pump

Several factors that affect the cost of installing heat pump hvac systems. They can include the size and type of system, the complexity of the installation process, and the location of your home.

Type of Heat Pump

There are several different types of heat pumps available, each with its own unique benefits and costs.

Air Source

Air source heat pumps are one of the most common types of heat pumps used in homes today. They extract heat from the outside air and use it to heat your home. In the summer, it transfers heat from your home into the air outside.

Installation for an air source heat pump costs $3,000 to $10,000. It depends on the size of the system and the complexity of the installation process.

Mini Split

Mini split heat pumps use air-source heat pumps combined with separate air handlers in each room you want to heat or cool. Mini split installation costs start at $4,000 for a single-zone with one air handler. Multi-zone setups for the whole house can run $20,000 or more.

You’ll see mini splits for sale online for much less, but that’s for a DIY installation. And, it’s not recommended to install a mini split yourself for a number of reasons.

Geothermal Heat Pump

Geothermal heat pumps, also called ground-source models, are a more expensive option, but they are also one of the most energy-efficient. They use the constant temperature underground to heat your home. Geothermal heat pump installations reach under the soil and cost anywhere from $10,000 to $30,000.

Water-Source Heat Pump

A water-source heat pump extracts heat from a body of water. These systems are more efficient in the winter than air-source heat pump systems because the water is usually warmer than the air. and can save homeowners a significant amount of money on their energy bills over time. The average installation cost ranges from $10,000 to $20,000.

Solar Heat Pump

A solar heat pump uses the power of the sun to power the system. They cost up to $40,000 to install, depending on how many solar panels you need. But by using renewable energy, they can save you the most money on your utility bills.

Hybrid-Fuel Heat Pump

A hybrid-fuel heat pump is a combination of an electric heat pump and a gas furnace. You can set a temperature threshold at which the furnace warms your home instead of using the heat pump.

This ensures you’re always using the most efficient option. And, you have backup heat in case it’s too cold for your heat pump to work. They cost $8,000 to $15,000 for both units.

Energy Efficiency

Energy efficiency is a crucial factor that can impact the cost of installing a new heat pump. Heat pumps with higher SEER ratings (Seasonal Energy Efficiency Ratio) are more efficient and are more expensive. However, investing in a more energy-efficient unit ultimately saves you money in the long run by reducing your monthly energy bills.

Size and Capacity

The size and capacity of a heat pump system also affect installation costs. A larger unit will generally cost more to install than a smaller one. That could mean the physical size of a mini split system — how many air handlers you need. But, it also refers to the amount of heating or cooling your home requires.

Load Calculation

Before you choose a heat pump system, your HVAC installer will perform a load calculator to determine the size and capacity you need. It’s usually measured by BTUs, or British Thermal Units. This calculation takes into account factors such as the size and layout of the home, insulation levels, and the local climate to determine the appropriate capacity and size heat pump needed.

Heating and Cooling

Another factor that can impact installation costs is whether the heat pump system is designed to both heat and cool the home or only provide one of these functions. A system with weak heating capacity that’s intended to work mostly as an air conditioner costs much less than one capable of keeping your home warm all winter.


The complexity of the installation process has a lot of effect on the overall cost. Factors here include whether or not you need ductwork or if the job involves extra work. The price of permits and prevailing labor wages in your area play a role, too.

Ductwork Vs. No Ductwork

Installation usually takes less than a day if you’re putting a ducted system in a home that already has ductwork. The same goes for a mini split with one or two air handlers. But, the cost goes up significantly if you need to put ducts and vents in a home that never had ductwork before. Estimate $12 to $25 per linear foot of ductwork, with an average of $3,000 per house.

Permits and Labor Costs

Permits are necessary for any significant work on your home, and the cost can vary depending on where you live. Labor costs also vary depending on the complexity of the installation process, the experience of the heat pump installers, and the local wage rates in your area.

Extra Work Involved

The work requires more time and effort if your home has difficult access, such as steep driveways or hard-to-reach areas like an attic installation. Ground-source systems require digging trenches usually 12 feet long and four feet deep, which increase the cost. The add more if your home is built on soil that is difficult to excavate or is unstable.

Credits, Rebates, And Incentives That Lower Heat Pump Installation Cost

Thanks to their high-efficiency and low impact on the environment, heat pump systems are more affordable than ever thanks to various rebates and incentives available. You can find federal and state-level programs that reduce the cost of your heat pump installation. And, you can pair them with manufacturer rebates.

High-Efficiency Electric Home Rebate Act (HEEHRA)

The HEEHRA program offers rebates for homeowners who install high-efficiency heat pump systems. The program is income-based, so the rebate amount varies depending on the homeowner’s income and the cost of installation.

For those making less than 80% of their Area Median Income, the program offers up to 100% coverage of installation costs, up to $8,000. This means that if the installation costs less than $8,000, you pay nothing out of pocket if you qualify.

For those making between 80% and 150% of their Area Median Income, the program offers a rebate of 50% of the installation cost, up to $8,000.

As of March 2023, the funds for this rebate have yet to be disbursed. However, homeowners can still take advantage of this program. Let your HVAC contractor know, and they’ll save your invoices, model information, and other documentation so you can apply later.

Nonbusiness Energy Property Tax Credit

Instituted in 2020, the Nonbusiness Energy Property Tax Credit is worth up to 30% of the cost of a new heat pump, up to $2,000.

The tax credit doesn’t reduce the installation cost upfront. Nor do you get money back. Rather, it’s applied as a credit on the homeowner’s tax return.

To apply, out IRS Form 5695 when you do your taxes and provide proof of purchase and installation of the equipment. Then, you’ll get a write-off that reduces what you owe when you file.

Utility Rebates

Utility companies around the country offer rebates to homeowners that install energy-efficient HVAC like heat pump systems in their homes. Your electric or gas company’s websites tell you what’s available in your area.

Or, start with these statewide sites:

Manufacturer Rebates

Like other HVAC manufacturers, Bryant offers rebates on their products as a way to incentivize customers to make a purchase. They vary depending on the model and time of year.

Most HVAC contractors include these in the estimate they give you for your project. You can always ask to make sure they’ve accounted for them.

In most cases, the installer takes care of filing all the paperwork so the rebate check gets sent straight to you.

Utility Rebates

In addition to manufacturer rebates, many utility companies also offer rebates for the installation of high-efficiency heat pump systems. These rebates are designed to encourage customers to upgrade to more energy-efficient systems, which can help reduce demand on the electrical grid and lower overall energy consumption.

Summary: How Much Does A Heat Pump Cost Including Installation [2023]?

Here’s a quick summary of the average cost ranges for various installations. And, since air-source is the most common, I’ll provide more detail on the costs by the size of your house.

Heat Pump FAQs

I’ll end this article by addressing a few more frequently-asked installation questions. If you need more information, or want to know about how a system like this can work in your home, use our dealer locator to find a certified HVAC contractor in your area. You’ll get a free consultation to get all the specific answers you need. 


How long does it take to install a heat pump?

Installing a single-zone mini split or air-source heat pump in a home with ductwork takes less than a day. Multi-zone mini splits and water-source can take up to a week. Geothermal takes nearly a month. 

Why is heat pump installation so expensive?

Heat pump installation gets expensive when the work involves multiple floors, hard-to-access areas, or installing new ductwork. Ground-source models require digging long trenches, which adds a lot to the cost. Finally, any quality HVAC installer charges for their expertise and to cover expenses. 

Can you install a heat pump in an existing home?

A heat pump is just as easy to install in a new home as it is for new construction unless the home needs new ductwork installed. Geothermal units require a lot of digging, and water-source models require a body of water nearby. 

Find an expert heat pump installer in Cherry Hill, NJ or anywhere in New Jersey, Pennsylvania, or Delaware.