Last updated: September 27, 2026
Cost is usually the first thing people want to know about a heat pump, and it’s the hardest thing to pin down. This page explains where the prices, running costs and savings figures in our guides come from, how we turn them into ranges, and how to use them alongside real quotes. It adds detail to our Editorial Policy, which covers how we research and check every guide.
Where our cost figures come from
We build each figure from published, checkable sources and link them in the guide so you can see the original numbers:
- Installed costs: cost data published by government agencies and national laboratories, such as the U.S. Department of Energy and NREL, and installed project costs reported by state and utility heat pump programs, where they publish them.
- Equipment: manufacturer specifications and published pricing, with efficiency ratings checked against the AHRI directory and ENERGY STAR listings.
- Energy prices: average residential electricity, natural gas, propane and heating oil prices from the U.S. Energy Information Administration (EIA), by state where the data exists.
- Rebates and tax credits: the official rules of federal, state and utility programs, taken from the program administrator or the IRS rather than from secondhand summaries.
- Industry data and reporting: reputable trade and news coverage of pricing, used to cross-check other sources and always attributed.
When sources disagree, we say so, explain the likely reason (different years, regions or system types), and don’t simply average them together.
What an installed cost includes
Unless a guide says otherwise, an installed cost covers the equipment, labor, standard materials such as the line set, pad and thermostat, and removal of the old system. Items that vary a lot from home to home are listed separately so they don’t get hidden in the total:
- electrical panel or circuit upgrades
- new or repaired ductwork
- permits and inspections
- backup heat, such as electric strips or a dual-fuel furnace
- work on hard-to-reach locations, such as attics and upper floors
How we build price ranges
We give ranges rather than single numbers, because the same job can be priced very differently from one home or one town to the next. Each range shows a low end, a typical cost and a high end, and the guide explains what pushes a project toward either end, such as:
- System size, in tons or BTUs, which depends on your home’s heating and cooling load
- System type: ducted, ductless single-zone, multi-zone, or cold-climate models
- Efficiency: higher SEER2 and HSPF2 ratings usually cost more upfront
- Location: labor rates and permit fees vary by region and between cities and rural areas
- The house itself: existing ducts, electrical capacity and access to the installation site
Every figure is tied to the year it applies to. Where we adjust an older figure to today’s prices, we say that we did and how.
How we calculate running costs and savings
Running-cost figures depend on assumptions, so we state them every time:
- Energy use: an estimate of how much heating or cooling a typical home of that size needs in that climate.
- Efficiency: the system’s rated efficiency (HSPF2, SEER2 or COP), adjusted for cold weather where it matters.
- Energy prices: the EIA average rate for the state or the country, with the date of the data.
In short, yearly running cost is the energy your home needs, divided by the system’s efficiency, multiplied by the price of that energy. Because we show each input, you can redo the calculation with the rates on your own utility bill, which will almost always be more accurate for you than any average.
When we compare a heat pump with a furnace, boiler or air conditioner, both systems are calculated with the same assumptions, and comparisons over several years say which years and prices they use.
Prices before and after incentives
Our cost guides show the price before incentives and, separately, what it could be after the rebates and credits that may apply. We name each program, its amount and its main eligibility rules. Incentives depend on your income, location, utility and the equipment you choose, and programs can close or run out of funding, so a net price is an example, not a promise. Always confirm with the program before you buy.
How often we update cost figures
- Cost guides are reviewed at least once a year, and each one shows when it was last updated.
- Energy prices are refreshed when the EIA publishes new annual data.
- Rebate and tax credit amounts are updated when a program changes its rules.
- If a reader shows us a figure is wrong, we check it against the sources and correct it.
What our figures can’t do
Our figures are estimates to help you plan and to judge whether a quote is reasonable. They are not a quote. The only way to know what your project will cost is to get written quotes from licensed installers. We suggest getting at least three, and asking each installer how they sized the system. A proper load calculation, such as ACCA Manual J, is a good sign.
No manufacturer, installer or utility pays us to include, change or leave out a price. If you have a recent quote or invoice that doesn’t fit our ranges, or you spot a figure that looks out of date, please tell us through our contact page.