A heat pump heats and cools with one outdoor unit. They’re a common choice across the South, and you’ll see them farther north every year. The question we hear most is what one costs, and right behind it, whether it’ll cost more or less to run than an AC and gas furnace.
We’ll take both. The cost figures below come from industry cost guides published in 2026. They include installation and are not our prices.
What heat pumps typically cost installed
| Type | Range or average reported | Source |
|---|---|---|
| Central air-source heat pump | $5,000 to $15,000 | Fixr, Jan 2026 |
| 3 ton heat pump with air handler | $5,500 to $15,000, average about $9,000 | PickHVAC, May 2026 |
| Ducted heat pump | Average about $14,500 before incentives | EnergySage, 2026 |
| Dual fuel (heat pump + furnace) | Average about $14,350 before incentives | EnergySage, 2026 |
| Single-zone ductless mini split | $2,000 to $8,000 | Fixr, Jan 2026 |
| Multi-zone ductless | Average about $26,000 before incentives | EnergySage, 2026 |
Fixr also breaks it down by home size. A 2 ton system for about 1,000 square feet runs roughly $5,000 to $8,000 in their data. A 3.5 to 5 ton system for about 2,500 square feet runs roughly $9,500 to $22,000.
The spread is big because the jobs are different. Swapping an old heat pump and air handler for new ones in the same spots is about as simple as it gets. Converting a house with an old oil furnace, adding electrical service and running new ducts is a much larger project.
What pushes the price up or down
Ducted or ductless
If the house already has ducts in decent shape, a ducted heat pump is usually the least expensive way to go per ton. Ductless systems cost more per ton, and each extra indoor head adds equipment and labor.
Size
Most homes land between 2 and 5 tons. Bigger costs more, but the right size matters more than the price gap. See our sizing guide.
Efficiency and compressor type
Single-stage heat pumps cost the least. Two-stage and variable-speed units cost more and hold their heating output better as it gets colder. Cold-climate heat pumps carry a premium. Our good, better, best guide covers the tiers.
Electrical work
Heat pumps and air handlers with electric heat strips need the right breakers and wire. In older homes, especially ones with a 100-amp panel, that can mean a panel upgrade.
Replacing gas or oil heat
If you’re switching away from a fossil-fuel furnace entirely, there may be costs to remove the old equipment, cap a gas line or deal with an old oil tank.
Where you live
Labor rates and permits vary a lot. EnergySage notes typical whole-home installs ranging from about $8,000 in New Mexico to about $33,000 in New York.
Incentives
The federal 25C tax credit ended for equipment installed after December 31, 2025. Some states and utilities still offer heat pump rebates. Check with your state energy office and your utility.
Heat pump vs. AC and gas furnace: what decides operating cost
We’re not going to give you a single “you’ll save X” number, because nobody honestly can without your rates and your house. What we can do is tell you which inputs decide it.
Your electric rate vs. your gas rate
This is the big one. A heat pump moves heat instead of making it, so it can deliver more heat than the electricity it uses. A gas furnace burns fuel. Which one costs less to run depends on what you pay per kilowatt-hour compared to what you pay per therm or gallon. Cheap power and pricey gas favor the heat pump. Cheap gas and pricey power narrow the gap or flip it.
How cold it gets
Air-source heat pumps lose capacity and efficiency as the outdoor temperature drops. In a mild winter, that hardly matters. In a long, cold one, the system leans harder on its backup heat, and that backup is usually electric resistance strips, which cost more to run.
Equipment efficiency
For heating, look at HSPF2. For cooling, SEER2. The federal minimum for a new split heat pump is 14.3 SEER2 and 7.5 HSPF2. Higher numbers use less electricity for the same output.
Cooling is close to a wash
In summer, a heat pump is an air conditioner. At the same SEER2, cooling costs are about the same either way. The difference is almost all on the heating side.
To run your own numbers, try our heat pump savings calculator.
Dual fuel: a heat pump with a gas furnace
Dual fuel (sometimes called hybrid heat) pairs a heat pump outdoors with a gas furnace indoors. The heat pump handles heating in mild weather. When the outdoor temperature drops to a set point, the system shuts the heat pump off and the furnace takes over.
That switchover point can be set two ways. One is the balance point, the temperature where the heat pump can no longer keep up with the house on its own. The other is an economic balance point, set based on what you pay for gas and electricity, so the system uses whichever is cheaper at that temperature.
Dual fuel makes sense when:
- You already have gas service
- Your winters get cold enough that a heat pump alone would lean on strip heat
- You want a backup heat source that doesn’t depend on the heat pump
We sell matched heat pump and furnace systems for dual fuel, and heat pump and air handler systems for all-electric homes.
Common questions
How much does a heat pump cost to install?
Industry guides in 2026 put a central air-source heat pump at roughly $5,000 to $15,000 installed, with averages around $9,000 to $14,500 depending on the source and region. Bigger homes, ductless multi-zone systems and electrical upgrades can push it higher.
Is a heat pump cheaper to run than a gas furnace?
It depends on your electric and gas rates and on your climate. Where power is cheap relative to gas and winters are mild, heat pumps often cost less to run. Where gas is cheap and winters are long and cold, the furnace may win, which is why dual fuel exists.
What is a dual fuel system?
A heat pump paired with a gas furnace. The heat pump heats in mild weather, and the furnace takes over below a set outdoor temperature.
Can I still get the federal tax credit for a heat pump?
No. The federal 25C credit ended for equipment installed after December 31, 2025. Some state and utility rebates are still available.
Have questions about a heat pump for your house? Call us at (877) 843-4822, or browse central heat pumps.