New HVAC and Furnace Cost Guide

The cost to install a new HVAC and furnace system varies widely depending on equipment, home size, efficiency ratings, and installation complexity. This guide explains typical price ranges, factors that drive costs, long-term operating expenses, rebates and financing options, and steps to get accurate estimates for American homeowners.

Item	Typical Cost Range	Notes
Central AC (Unit Only)	$2,000 – $7,500	Depends on tonnage and SEER rating
Furnace (Gas)	$1,500 – $5,500	AFUE rating and size matter
Heat Pump	$3,000 – $10,000	Air-source heat pumps for heating + cooling
Full HVAC System Installation	$5,000 – $20,000+	Includes ductwork, labor, permits
Ductwork Replacement	$1,000 – $6,000	Depends on home layout and materials

Cost Overview For New HVAC And Furnace Installations

New HVAC and furnace cost commonly includes equipment, labor, permits, and any required changes to ductwork or gas/electrical lines. Average full-system installations typically range from $5,000 to $12,000 for most U.S. homes, while high-efficiency systems or large homes can exceed $20,000.

Equipment alone can be a substantial share of total cost, but labor, additional materials, and modifications can add 30%–60% more to the equipment price.

Key Factors That Affect New HVAC And Furnace Cost

System Type

The type of system strongly influences cost. Central air conditioning paired with a gas furnace is common; heat pumps offer combined heating and cooling and can replace both units depending on climate.

Equipment Efficiency Ratings

Efficiency ratings such as SEER for air conditioners and AFUE for furnaces determine purchase price and long-term energy costs. Higher-efficiency models cost more up front but can lower utility bills and qualify for rebates.

Home Size And Load Requirements

Homes are sized by cooling tons and heating BTUs. Undersized units will run constantly; oversized units cycle and reduce comfort. Proper load calculations (Manual J) are essential and can increase installation accuracy and cost.

Ductwork Condition

Existing ducts that are leaky, undersized, or poorly insulated often need repair or replacement. Ductwork work can add $1,000 to $6,000 to the project depending on complexity.

Installation Complexity

Installation in older homes, multi-story dwellings, or tight mechanical spaces often requires more labor and parts, increasing cost. Cost rises when gas lines, electrical upgrades, or structural modifications are needed.

Local Labor Rates And Permits

Labor rates vary regionally. Cities with higher living costs usually have higher HVAC installation prices. Permit fees and local code requirements can add to total expense.

Typical Costs By System Type

Gas Furnace

Gas furnaces remain a common choice in colder U.S. regions. Typical equipment cost ranges from $700 for basic models to $4,000 for high-efficiency units. Installed costs usually fall between $1,500 and $5,500.

Electric Furnace

Electric furnaces have lower upfront costs for equipment but higher operating costs in cold climates. Installed prices commonly range from $1,000 to $4,000 depending on capacity.

Air-Source Heat Pump

Heat pumps provide heating and cooling in one system and have improved performance in moderate climates. Equipment and installation typically range from $3,000 to $10,000, higher for cold-climate or ductless systems.

Mini-Split (Ductless) Systems

Ductless mini-splits are ideal for retrofits or zone control. Single-zone units start around $1,500 installed and multi-zone systems can exceed $10,000 depending on quantity and complexity.

Central Air Conditioner

Central AC condenser and coil installations commonly range from $2,000 to $7,500 depending on tonnage and efficiency. Costs are higher if paired with new furnace or extensive ductwork changes.

Installation Cost Breakdown

Understanding the typical cost components helps homeowners compare quotes. The breakdown varies but commonly includes equipment (40%–60%), labor (20%–40%), materials and accessories (5%–15%), and permits/testing (1%–5%).

Component	Percent Of Total	Examples
Equipment	40% – 60%	Furnace, condenser, coils, heat pump
Labor	20% – 40%	Installers, HVAC technicians
Materials & Accessories	5% – 15%	Ductwork, thermostats, refrigerant lines
Permits & Testing	1% – 5%	Local permits, system commissioning

Operating Costs, Efficiency, And Long-Term Value

Operating costs depend on fuel type, system efficiency, local energy prices, and usage patterns. Higher AFUE or SEER ratings reduce annual energy consumption, improving long-term savings.

Example: Upgrading from a 10 AFUE furnace to a 95 AFUE unit reduces gas usage significantly; payback depends on fuel prices and usage but can be 5–10 years in many cases.

Energy Cost Comparison

• Gas Furnace: Lower operating cost in gas-friendly regions; higher initial efficiency models cost more but save fuel.
• Electric Furnace: High operating costs where electricity rates are high; lower equipment expense.
• Heat Pump: Often the most efficient option for moderate climates; electric operation may be cheaper than gas in some areas.

Rebates, Tax Credits, And Financing Options

Federal, state, and utility incentives often lower the net cost. Tax credits for high-efficiency heat pumps or HVAC components may be available. Homeowners should check the Database of State Incentives for Renewables & Efficiency (DSIRE) and local utility websites.

Many dealers offer financing with promotional rates or payment plans. Home improvement loans and home equity lines are common alternatives. Incentives can reduce cost by hundreds to thousands of dollars.

How To Get Accurate Estimates For New HVAC And Furnace Cost

Request Multiple Quotes

Obtain at least three written estimates from licensed HVAC contractors. Compare equipment brands, efficiency ratings, warranties, and included services. Ensure proposals are apples-to-apples for fair comparison.

Require A Manual J Load Calculation

A Manual J calculation determines correct system size based on home specifics. Quotes that skip Manual J risk oversized or undersized systems, leading to comfort and efficiency problems.

Ask About Warranties And Service

Compare manufacturer and labor warranties. Some contractors include maintenance plans or extended labor warranties that increase long-term value.

Check Licensing And References

Verify contractor licenses, insurance, and local references. Reviews and Better Business Bureau listings help confirm reliability and post-install support.

Maintenance, Lifespan, And Replacement Considerations

Regular maintenance extends system life and preserves efficiency. Annual furnace tune-ups and seasonal AC maintenance are recommended. Filters should be changed regularly.

Typical lifespans: gas furnaces 15–20 years, central AC 12–15 years, heat pumps 10–15 years. Early replacement may be warranted when repair costs exceed 50% of a new system or efficiency declines markedly.

Special Considerations For Retrofits And Old Homes

Older homes often require duct resizing, insulation upgrades, or structural access for equipment. Retrofits can increase cost but also offer opportunities to improve efficiency and comfort through insulation and air sealing.

Historic homes may need specialized installers experienced in working with older construction to avoid damage and preserve aesthetics.

Questions To Ask An HVAC Contractor

• Will a Manual J load calculation be performed?
• What are the exact equipment models and efficiency ratings?
• What does the quoted price include (ductwork, permits, disposal)?
• What warranties apply to equipment and labor?
• Are there local rebates or tax credits available with this equipment?

Frequently Asked Questions

How Long Does An Installation Take?

Simple replacements often complete in one day. Full system installs, ductwork modifications, or complex retrofits can take several days to a week depending on scope.

Is It Better To Replace Both Furnace And AC At The Same Time?

Replacing both units together ensures matched efficiency and proper system balance. Combining projects can reduce labor costs and coordinate warranties, although immediate budget constraints may favor phased replacements.

Can A Heat Pump Replace A Furnace In Cold Climates?

Modern cold-climate heat pumps perform well at lower temperatures and can replace furnaces in many regions. Evaluate local climate, electricity vs gas pricing, and available incentives before switching.

How Often Should Homeowners Service Their System?

Annual professional tune-ups for furnace and AC are recommended. Routine filter changes and visual checks between service visits help maintain performance and indoor air quality.

Practical Steps To Prepare For A New HVAC Or Furnace Project

1. Collect recent energy bills to estimate current operating costs.
2. Schedule in-home assessments with multiple contractors.
3. Request written quotes with detailed line items and equipment specs.
4. Research available rebates and financing before signing a contract.
5. Plan for maintenance and register warranties after installation.

By comparing quotes, prioritizing proper sizing and efficiency, and factoring in long-term operating costs and incentives, homeowners can make informed decisions about new HVAC and furnace cost and choose a system that best fits comfort, budget, and energy goals.