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What is the Average cost of a New Heating and Cooling System Installed in 2012?


The purpose of this guide is to help you prepare for the significant costs of a new HVAC system.  What is the average cost of a new heating and cooling system installed in 2012?  Let’s take a look at the key factors that contribute to the bottom line.  We also provide sample costs you an expect.

Types of Heating and Cooling Split Systems

You’ve got several options for heating and cooling your home, and climate plays a role.

Gas Furnace and Central Air Conditioner: This is still the most popular type of split system used today.  Gas furnaces are a safe, affordable and fairly efficient source of heat.  They are most popular in colder climates, but even in warmer climates, gas furnace split systems are among the most common used.

Heat Pump and Air Handler: Heat pumps are becoming more popular with each year.  They are a more cost-effective source for heating when temperatures are above about 40-45 degrees F.  Sometimes electric heat strips, like space heaters inside the air handler, are included to help with colder weather.  However, once temperatures dip below about 40 degrees, a heat pump, even with heating strips, is not an economical way to heat.  At cold temps, they become ineffective.

Heat Pump and Gas Furnace: These are known as dual fuel or hybrid heat systems and they are an ideal design for cold weather regions.  The heat pump is used to save money when temperatures are cool.  The system switches to the gas furnace for heat when the weather turns very cold.

In terms of equipment cost, a gas furnace/air conditioner split system is the cheapest, then a heat pump/air handler system.  The heat pump/gas furnace split system costs the most but offers the lowest utility bills, all else being equal.

The Cost of a Heating and Cooling System

There are several factors that affect the cost of a split system.

1. Capacity or Size: Size, of course, is the first factor to consider.  The larger your home is, generally speaking, the larger the system will have to be.  Residential gas furnaces range in capacity from about 45,000 Btu to over 150,000 Btu.  Residential heat pumps and air conditioners range in size from 1.5 tons to 5.0 tons.

2. Efficiency: The more efficient a split system is, the more it will cost.  The upside is that efficient systems produce lower utility bills.  When thinking about the tradeoff, keep your climate in mind.  The warmer the climate is, the more efficient you’ll want your AC or heat pump to be, in order to keep utility costs low during heavy summer use.  The colder the climate is, the more efficient you’ll want your heat source to be.  Keep in mind that heat pumps by themselves are not an option for regions with very cold winters.

3. Features:  Today’s heat pumps and air conditioners are available with 2-stage compressors.  Some have modulating compressors.  These features offer more precise control of indoor climate.  They produce gentler heating and cooling with fewer temperature fluctuations.  They also do a better job of removing humidity from your home during air conditioning cycles. Two-stage heat pumps and air conditioners cost 15%-25% more than single-stage models.  Modulating models may cost as much as 50% more than single-stage models.  The technology is new and still very pricey.  See our 2012 air conditioner and heat pump cost articles for specifics on how staged heating and cooling affect price.

In gas furnaces, the primary features that boost performance are a staged gas valve and a variable-speed blower.  The gas valve may be a standard single-stage valve with on/off functionality or it may be a 2-stage valve or a modulating valve.  See the article “What is the Average Cost of a New Gas furnace Installed in 2012?” for specifics on how staged heating works.

A variable-speed blower fan will improve your home’s comfort.  It will run on low capacity when the 2-stage or modulating gas valve is running at low capacity, producing quieter operation and very even temperatures.  A two-stage gas valve with variable speed blower may add 15% to the total cost.  A modulating gas valve with variable-speed blower will add 25% to 50% to the total cost.

A dual fuel heat pump will cost about 10% more than a standard heat pump, at the most.

With these factors in mind, here are price ranges for furnaces, air handlers, central air conditioners and heat pumps. The smaller, less efficient and more basic they are in their operation, the less they will cost.  The larger, more efficient and more advanced in performance they are, the more they will cost.

Gas Furnaces: Less than $1,000 to more than $5,000.  Average gas furnace cost: $2,400.

Air Handler: Less than $1,000 to more than $3,500. Average $1,700.

Air Conditioner: Less than $1,000 to more than $4,000.  Average central air conditioner cost: $2,600.

Heat Pump: About $1,300 to over $5,000.  Average heat pump cost: $3,500.

Heat pumps and central air conditioners have extra equipment costs that need to be factored in.  The system requires and evaporator coil in the air handler or gas furnace, with an average cost of $600.  It needs a copper lineset to carry the refrigerant, with an average cost of $200.  A thermostat costs, on average, about $125.

Heating and Cooling System Installation Costs

Depending on the cost of your equipment, the cost of installation may exceed it.  There are several factors that affect installation cost.  The ease or difficulty of the installation is most important.  Heating and cooling contractors factor their installation charge based on time and materials.  The more time and the more material required, the higher the cost.  Easy to access utility closets will produce cheaper installation rates than cramped crawl spaces or attics.

The time of year will also affect installation estimates.  When contractors are very busy, their rates will be higher.  When they lack business, they’ll write more competitive bids.  If you can have your system installed in a non-peak period, you might receive lower estimates.  Be sure to get at least 3 written estimates and choose the qualified contractor with the best prices.

Installation of a complete split system can cost as little as $2,000, though prices that low are rare.  Very difficult and complex installations may cost more than $10,000.  A more common range for installation of a complete system is $3,500 to $6,000, with an average being $4,700.

Total HVAC System Costs

Given these figures, the average cost for a complete heating and cooling system installed range from $9,500 to $11,000.  Smaller, less efficient and more basic systems will cost less; larger systems, more efficient ones, and those with more performance features will cost more. This average cost for a new heating and cooling system installed in 2012 will help you know what to expect as you plan to get estimates on systems for your home.

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