HVAC Installation Cost – What’s the Fair Price For New HVAC Systems in 2018

This comprehensive HVAC installation guide covers buying HVAC components and an entire system. How to choose the right equipment, installation tips and current costs are included.

Why HVAC Installation Cost Isn’t Advertised

Knowing what you should be paying for your HVAC equipment and installation is essential to getting a fair deal. Most HVAC prices aren’t advertised. Contractor strategy is to get a salesperson into your home to sell you on a package of equipment, accessories and installation. This makes comparing systems difficult, and some sales pressure might be applied.

It becomes a hassle to get competitive estimates, and some companies are now charging for bids. We have a solution for these issues. It is discussed below.

The value of this guide is that you’ll be a more educated consumer after reading it and the links to other guides of interest. You will have a good understanding of the right system for your home and what it should cost.

Perhaps bookmarking this guide for referring to later will be useful.

How Honest Contractors Approach Sales

When a contractor puts the needs of the customer first, it will follow these steps.

1). Determine what equipment is needed

Your home requires equipment properly sized using sizing software. It will be the suggested efficiency for your climate. Beyond that, some HVAC accessories might benefit your indoor comfort and climate.

An honest HVAC company won’t try to sell you the wrong equipment. Common examples of unfair tactics include trying to sell:

  • A 95% furnace (with a higher profit margin) if you live in Florida
  • An 80% furnace (the contractor got stuck with from a job that fell through) if you live in North Dakota
  • A 4-ton heat pump ($$$) when a 2.5-ton model ($$) is the right size for your home
  • An air purifier if nobody in your household suffers from breathing issues

You get the point. This guide and the links to other guides on PickHVAC will assist you in determining for yourself what equipment will meet your needs before you call an HVAC company.

So, if you live in a northern climate and a salesperson says, “You need a 20 SEER AC,” you can say, “No I don’t. There’s the door!”

2). Make helpful suggestions based on your needs

If a child has asthma or an older adult has COPD, and there are pets or smokers in the household, then it is appropriate for the salesperson to suggest one of several air cleaning technologies available.

Back to the AC example. If you live in Phoenix and tell the contractor you want to save $900 with a 14 SEER compared to an 18 SEER AC, it is fair for them to point out that you’ll lose that $900 in less than 3 years through higher electricity bills. And you’ll lose it again every 2-3 years until you replace the AC.

How HVAC Contractors Determine Their Estimates

Contractors deserve a fair profit, and consumers deserve a fair price.

Here’s how most HVAC contractors determine a cost that is fair to both parties – and what a few unscrupulous contractors do to attempt to pad profits.

The contractor determines:

  1. Equipment Cost: The wholesale cost of the right equipment for the home’s needs
  2. Installation Supplies: This often include sheet metal or pre-built plenum, refrigerant and line set, AC pad, thermostat
  3. Labor: Estimated hours of labor. Price varies. For example, a certified installer might be paid $50 to $75 per hour and have a helper being paid $20 to $35 per hour.
  4. Travel: Time and mileage to the job
  5. Fair Profit: Profit doesn’t all go in the pocket of the company owner. It is first used to pay overhead expenses. These include vehicles (and their maintenance and repair), possibly warehouse or storage space, liability and unemployment insurance, license and bonding fees and more. What’s left from all that is “pure profit.”

What is Fair Profit? Unfair Profit?

In the HVAC industry, the markup for profit is 35% to 60% among contractors with a good reputation. Of course, the contractor probably won’t tell you what its profit margin is, even if you ask.

Example – $7,000 Job: If the HVAC company has costs of $7,000 to replace a gas furnace and central air conditioner, they will add a profit of $2,450 (35%) to $4,200 (60%).

Cost of Living: Profits are higher where the cost of living is higher because the HVAC company has greater expenses. It pays higher wages, more in taxes and has more overhead.

Excessive Profit: There are two times a contractor might seek to “price gouge” customers.

1). Busy companies: The company is so busy, it doesn’t need the work. It will add 70% to 100% profit, and if the customer accepts the estimate, it will move that high-margin customer to the front of the line. This often happens in the worst heat of summer when overburdened ACs and heat pumps quit and the dead of winter when furnaces give up. This is a good reason to consider pre-emptively replacing your system once it’s about 15 years old and/or has had major repairs.

2). Lazy companies: The company has learned that it can make just as much money with less work by charging more. If the company charges excessive profit, it might get half as many jobs. But it might make the same total profit.

For example: 5 jobs x $5,000 profit = $25,000. 10 jobs x $2,500 profit = $25,000

Don’t be taken advantage of! The only solution to these problems is to get written estimates from at least 3 local HVAC companies with a good reputation that know they are competing for the work.

General 6 Factors that Affect Installation Cost  

Specific cost factors are mentioned for each system type below. But some factors are the same regardless:

1. Brand

Air Handler Quality Levels

Brands like American Standard, Trane and Lennox cost the most. Goodman is the cheapest. The rest populate the middle of the spectrum. Here’s something to know: The quality among brands isn’t as great as price differences. The difference in prices reflect that some customers want “bargain” equipment to save cost and others want “premium” equipment they believe will run longer with less trouble. Therefore, each manufacturer has priced to meet consumer perception.

2. Grade

Most brands make basic, better and best lines of equipment, often related to efficiency or performance.

3. Size

Each HVAC component comes in a range of sizes, meaning their heating or air conditioning capacity. The more capacity the unit has, the more it costs.

Here are the general ranges:

  • Furnaces: 40,000 BTU to 140,000 BTU.
  • Split system air conditioners and heat pumps: 18,000 BTU (1.5 tons) to 60,000 BTU (5 tons).
  • Mini split air conditioners and heat pumps: 6,000 BTU to 42,000 BTU.

4. Job Complexity

This factor plays a large role in determining the cost of installation. The harder the job is, the more time it will take, and the higher the cost will be. This can increase the installation portion of the estimate by 50%.

For example, if the labor to install a furnace in a walkout basement is $1,400, to install it in an attic or crawlspace could be $2,100.

5. Cost of Living

Everything costs more in large metro areas, especially along the East and West Coasts. Goods and services are more affordable in small towns and rural areas, especially in the South and Midwest.

6. Whether Ductwork is Installed

If you’re installing a ducted HVAC system in new construction or if old ducts are in poor condition, new ductwork is necessary. Ductwork also includes the plenum through which treated air enters the supply ducts and the return drop through which untreated air re-enters the system.

There are several duct system types to consider including “trunk and branch” and radial. Consult your HVAC pro for the right type for HVAC system, its location and the layout of your home.  All factors are important in your quest to evenly distribute air.

Our HVAC Ductwork Installation Cost Guide is the most comprehensive guide of its type. It fully explains the purpose of ductwork and all your options. Pricing is included for all duct types and plenums/drops too. Material and installation costs are listed. Ductwork cost varies greatly by the size and type of duct plus the complexity of the installation, but you can expect to pay $10.20 to $17.25 per linear foot installed.

Separate Sections on Component Installation

Here are mini guides to major HVAC system types. An overview of installation is given along with tips to ensure success. Prices and factors are included.

Central Air Conditioner Installation

Central ACs remain the top way to cool homes when paired with a furnace. They are affordable, and their rising efficiency ratings help homeowners significantly reduce cooling costs.

Installation: Replacement is quite easy, especially when an old refrigerant line set can be used. If the set is worn, it’s much better to pay the extra $400-$600 to replace it rather than risking it leaking later. When your AC loses refrigerant, you lose your cool air and the compressor is at risk of failing. A new installation means installing a coil in your furnace or air handler, running the line set between it and the coil in the condensing unit and adding refrigerant, if needed. Most ACs come pre-charged for 20-30 feet of line. If the line set is longer, a small amount of refrigerant is added.

Installed Cost: Average installed cost for central air is about $3,300 to $6,000. Complete cost details plus a wealth of additional useful information is available in our Central Air Conditioner Installation Cost.

Cost Factors: Size is a big factor, but efficiency impacts cost too since options range from 14 to 25+ SEER. Compressor performance – one, two and variable capacities – is the third major factor in cost.

PickHVAC Tips: Installing the right size central air conditioner is extremely important. Have a load calculation done to ensure proper sizing. ACs that are too big aren’t as energy-efficient as they should be, and they cycle on and off too much. This creates over-cooling and temperature imbalance. Units that are too small run constantly in very hot weather and can’t keep your home cool. When an air conditioner is properly sized, it runs at optimal efficiency and indoor comfort.

Heat Pump Installation

Heat pumps are gaining popularity over gas furnaces because they are highly efficient and options are being developed for cold climates.

Installation: The installation of a heat pump is much the same as for a central AC. If you’ve made energy-efficient upgrades to your home, it is possible that the new AC can be a half-ton (common) to one ton (less common) than the old AC. The difference will cut energy use significantly.

Installed Cost: Average installed cost for central air is about $2,300 to $6,300. You can read our comprehensive Heat Pump Installation Cost Guide for more info.

Cost Factors: The size of the unit, its efficiency and it’s single-stage, two-stage or variable-capacity are the top cost factors. Features like communicating technology and improved dehumidification performance also affect the price. Learn more about communicating technology here including the pros and cons, before being agreeing to a communicating system.

Bad Installation: Common mistakes lead to too little or too much refrigerant added, and both cause bad efficiency and mechanical breakdown. Leaking refrigerant and the blower not adjusted for optimal airflow are common problems too. The result is imbalanced temperatures and poor dehumidification.

PickHVAC Tips: First, see the PickHVAC tip above about sizing a central air conditioner. It applies to heat pumps just as much. Secondly, Even if the line set for the new heat pump is the correct size, we recommend replacing the set or at least the fittings. Old lines and fittings are a major source of leaks. When refrigerant leaks out, the heat pump efficiency suffers. Eventually, the unit stops providing heating and air conditioning, and it might break down.

Air Handler Installation

Air handlers support heat pumps in most climates and ACs in applications where AC isn’t needed. They include the blower and often the indoor coil. You have performance options such as variable-speed fans.

Installation: The installation of an air handler often involves replacing the plenum and air return connection to the ductwork. A coil can be removed from the old air handler during replacement if the heat pump isn’t being switched. However, it often happens that an air handler is replaced as part of a complete system replacement.

Installed Cost: The average installed cost of an air handler is about $2,200 to $3,000.

Cost Factors: The airflow capacity of the unit and whether it has a variable-speed blower are the major cost factors.

Pro Tips: Before you agree to buy a replacement air handler, check for common and easily repaired problems that can cause the impression the unit needs replacing. These include a blocked drain that causes leaks or a dirty coil that causes the unit to lose efficiency and make your utility bills go up.

Pro HVAC company Southern Comfort Mechanical says on its blog, “If there’s mold growth inside the handler due to excess moisture, algae in the condenser drain line or a dirty evaporator coil, it can negatively impact your AC unit’s efficiency. The filters inside may also build up excess dirt and become clogged, which will also make your AC [or heat pump] waste energy trying to sustain the cool climate inside your home.” These issues are easy to solve. They don’t require replacing the air handler.

Gas Furnace Installation

Still the most common heating appliance, gas furnaces are affordable. Furnaces with excellent efficiency are available for cold climates.

Installation: The old furnace is disconnected from the ductwork plenum, exhaust flue, gas and electrical hookups. In most cases, a new plenum must be made onsite or ordered from a local sheet metal fabricator. A new vent might be required too. The furnace is set and reconnected. Adjustments to the blower fan speed and burner are made to optimize furnace performance for your home and climate.

Installed Cost: Average gas furnace price for an installed unit is $2,000 to $5,000.

Cost Factors: Besides size, efficiency ranging from 80% to more than 98%, and performance are the largest factors in new furnace cost. Complete cost details plus a wealth of additional useful information is available in our Gas Furnace Installation Cost Guide.

Bad installation: If the plenum isn’t sealed, you’ll waste energy. If the blower isn’t properly adjusted for the ductwork, you’ll end up with rooms that are too warm or chilly. Of course, there’s the risk of shock, explosion and carbon monoxide leaks, all potentially fatal.

PickHVAC Tips: Don’t be sold on systems with features you don’t want or need. Called “upselling,” it is rampant in the HVAC industry. Some features are nice – if you want them. If your single-stage furnace was loud and pushed out cold air at the start of the cycle, then a two-stage model will improve those issues. If you didn’t notice them, the upgrade will be a waste of money. That’s just one common example.

Oil Furnace Installation

Oil furnaces are a small part of the furnace market, used where natural gas and propane aren’t accessible. If you don’t already have an oil furnace, there is no good reason to consider one.

Installation: Installation factors are mostly the same as those for gas furnaces.

Installed Cost: Average oil furnace price for an installed unit is $3,500 to $5,400. Our Oil Furnace Installation Cost Guide is loaded with useful information about cost, pros and cons and choosing an oil furnace right for your home and circumstances.

Cost Factors: Size is the main cost factor. Efficiency (81% to 87%) and single-stage/two-stage heating have a lesser impact on cost.

Bad Installation: Poor installation of an oil furnace will reduce expected efficiency and often causes premature mechanical failure. Burner adjustment is critical, so choose an experienced installer.

PickHVAC Tips: Oil burns dirty, so it is important to have your plenum and ducts checked to see if they should be cleaned when replacing an oil furnace. If you don’t clean the plenum and ducts when replacing the furnace, the new furnace might not run as efficiently and comfortably as possible due to restricted airflow. This can also reduce the oily smell sometimes associated with oil furnaces.

Electric Furnace Installation

Electric furnaces are a niche market too. Most of these units are installed in warm climates where heat is needed infrequently. These are large space heaters with a blower that push heat through your ducts.

Installation: Electric furnaces are inexpensive and easy to install, so have low costs. Our Electric Furnace Installation Cost Guide has all the details needed to decide if you want one or should choose a gas furnace and, if you do, how to buy one that will serve your purposes.

Installed Cost: Average electric furnace cost for an installed unit is about $2,000 to $2,700.

Cost Factors: Size is the main cost factor. Blower speed (single and variable speed) and whether the motor is a PSC ($) or ECM ($$) have minor impact on cost.

Bad Installation: Poor installation of an electric furnace will result in it not working at all, in most cases. The worst installation failures lead to electrical fires.

PickHVAC Tips: Electricity resistance heat is the most expensive heating type. You don’t want one of these unless you’re heating less than 30 days per year. The upfront cost of an electric furnace is much lower than the cost of a gas furnace. However, operating costs are two to three times higher. If winters are cold where you live, you’ll waste your upfront cost savings in just a few years of high electric bills.

Thermostat Installation

Today’s thermostats do more than control the level of heating and air conditioning. They also can be programmed for each day of the week and be connected to WiFi for wireless, remote monitoring and control via a smart device and the thermostat app.

Installation: Replacement in most cases involves removing the old unit and using the same wiring to install the new thermostat. In new construction, the wiring bundle is installed before drywall is added, making installation of the wiring and thermostat quite easy.

Installed Cost: The average installed cost of a thermostat ranges from less than $50 for a basic programmable unit and more than $600 for a WiFi, full-color thermostat.

Cost Factors: Having a full-color LCD screen and touchscreen capability are the factors that add to cost more than any other.

DIY: Most DIY installations go smoothly. The major brands have compatibility checkers to see which of their models will work with the wiring your old thermostat is using. Potential problems involve the need for a C-wire, or common wire, when the existing bundle doesn’t include one. There are solutions discussed in our Thermostat Buying Guide, linked to below.

Pro Tips: Before you buy one of the learning thermostats available, you should beware of their shortcomings. First, many require a c-wire to work properly. A common problem is that the old thermostat might not use a c-wire, and this makes it confusing when swapping wires to the new thermostat. Secondly, if you change your thermostat setting often, you might become frustrated with a nest thermostat or other learning thermostat. It will be constantly trying to learn patterns in your random setting changes, and will therefore change your home’s temperature when you don’t want it to. If you have a fairly consistent schedule or don’t mind overriding the unit either manually or via the app on your way home or when leaving, then you won’t experience this issue.

Thermostat Guide: It’s all here: Compatibility, DIY installation, what the wire colors mean, c-wire issues and links to our reviews of major thermostat brands including smart thermostats from nest, ecobee, Honeywell Lyric and Emerson Sensi.

Complete Split System Installation

A complete system involves installing two of the components above. Most popular combinations, but not the only ones worth considering, are a 1). A gas furnace and central air conditioner in northern climates, and 2). A heat pump and air handler is most popular in southern climates.

A good place to start your research is our guide called, “How to Choose the Best HVAC System: 6 Types Common Residential HVAC Systems.” It’s informative with system descriptions, and costs, best climates for each plus pros and cons for each.

Installation: In new construction, the first step is to have the right utilities in place – wiring and a gas line, for example – and then the system can be properly installed. In replacement projects, the installation factors listed above for each component will come into play.

Installation Costs: Costs for the most common systems installed range from about $6,100 to $8,500. Small systems sometimes cost less. Large systems with included accessories can surpass $10,000.

Cost Factors: Size, efficiency, performance and the quality of the components are the major factors.

DIY: We don’t recommend a DIY approach. Depending on the system, working with gas, electricity and refrigerant create dangers. Beyond that, it is essential that split system components be selected for compatibility. DIY installation of an HVAC system will void the warranty of most brands. The manufacturers won’t stand behind the warranty when anyone other than a certified installer does the work. This is true since improper installation is the main cause of poor system performance and mechanical breakdowns.

Mini Split System Installation

Mini split systems, often called ductless, are a growing market with double-digit annual growth in most recent years. The systems offer excellent efficiency and convenient installation.

Installation: This involves installing the outside unit and one or more indoor units and running refrigerant, power and drain lines. Mini splits are ideal for additions and locations not adequately heated/cooled by a central ducted system. They are being used for more whole-house applications too.

Installed Cost: There are many variables. Installed system costs start at about $2,000 and range to about $9,000, possibly more for very large ductless mini split systems. Our Mini Split Installation Cost Guide has a complete breakdown of costs

Specific Cost Factors: The heating/cooling capacity of the system and the number of indoor units are primary cost factors. Efficiency, ranging from about 16 SEER to more than 30 SEER, will impact cost too.

HVAC Air Quality Add-ons Installation Cost

If indoor air quality (IAQ) is a concern for you, there are three system types to consider as add-ons.

Air Purifiers: There are several air cleaner types ranging from advanced filters to UV germicidal light. We’ve completed a comprehensive guide with details about your options and their costs. Expect to pay less than $500 to almost $3,000 depending on the type you choose.

HRV/ERV Ventilators: These whole-house ventilators exchange air. They are ideal for homes with what is called a “tight envelope,” homes where house wrap has been applied and airgaps in the attic, around windows, doors and outlets have been sealed. Air in these homes becomes stale and polluted, so exchanging the air is important to IAQ. Heat recovery ventilators (HRV) are designed for cold climates. Energy recovery ventilators (ERV) are best for warm climates.  Your cost for an installed HRV or ERV will range from about $2,000 to more than $5,000 based on its capacity and features.

Humidifiers/Dehumidifiers: Humidifiers add needed moisture to the air in winter and very dry climates. Dehumidifiers remove dampness any time of the year. Central air conditioners dehumidify too, but in very humid climates, you might want to remove humidity without also cooling the air. You have a good range of options for both of these HVAC accessories. Whole-house humidifiers cost $350 to $800 installed, while dehumidifiers are $1,250 to $2,000 or slightly more.

How to Ensure You Get Your Money’s Worth

Selecting the Right System: There are many factors to consider.

  • What type HVAC system is best for your specific set of factors?
  • What size should it be?
  • How long will it take to pay yourself back with lower energy costs if you buy a more efficient unit?
  • Is existing ductwork usable (for ducted systems)?
  • Where should indoor units be located in a ductless system?

The many PickHVAC guides linked to above answer all these questions and many more. Once you’ve researched the right HVAC system for your home, an HVAC pro can help you select precisely the right equipment.

Choosing an HVAC Contractor: While each brand touts its benefits, the truth is that all brands use a narrow range of parts made by just a few manufacturers. There aren’t big differences. That means installation quality is more important than brand differences. Therefore, take your time hiring a contractor.

  1.  Get referrals from friends
  2.  Research the heating and air conditioning companies, and narrow your choice to experienced contractors with a good reputation
  3.  Interview your short list, and get written estimates from each
  4.  Review the estimates, and hire your HVAC contractor

The first two steps can be time-consuming. You can skip them and find a quality installer using our Free Local Quotes service by clicking the tab or calling today.

You’ll receive written estimates from top installers in your area. They are prescreened for experience, and all are licensed and insured. There is no cost to you for using the service. You’re not obligated to accept any estimate. Just save time, and get bids from dependable HVAC installers where you live.

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