Have you ever wondered if the HVAC industry is growing? If yes, let’s clear out that in 2023, the HVAC industry is expected to generate over $69 billion

With the increasing work-from-home culture, the number can skyrocket. So this is a green signal to start an HVAC business. An HVAC job entails designing, installing, repairing, and maintaining.

Since HVAC is a costly business and you are solely responsible for the HVAC system’s proper working, you can’t take chances. 

Among other works, the installation is the most challenging and also costs much. Why? Because only when the installation is planned and done properly, the HVAC unit will work without any flaws. For the same reason, it’s an expensive process. So, how much does HVAC installation cost in 2023? 

To learn it, you must dive into this article and check what factors can affect the installation.


  1. Different Types of HVAC Installation That Impact Cost
  2. Factors That Affect HVAC Installation Cost in 2023
  3. Tips To Save on HVAC Installation Cost in 2023
  4. FAQs
  5. Conclusion

Different Types of HVAC Installations that Impact Cost

First, you should determine what type of installation is needed for the commercial or residential property you’re working on. Does it need the entire HVAC system or anything from the heating, ventilation, and air conditioning unit?

For instance, if it’s chilled outside and the heating unit is not working, you would probably need a new or repaired furnace heater, not the AC unit. 

So, the installation and replacement costs of a specific HVAC unit is different from each other. Moreover, many combinations of heating and cooling systems are available for different climates, sizes, and construction of project areas.

Installation of air conditioning unit

  • A correct-sized window AC can cool up to around 1,500 square feet. The unit costs around $150–$750, and the installation charge typically ranges between $139 and $499.
  • The central air conditioner units are more powerful and cover larger areas than window AC. This unit costs somewhere between $1,200–$4,500 and $1,200–$2,200 for installation. 

Installation of furnace

  • A furnace is a heating system. It is completely separate from the AC unit but uses the same ductwork for circulation and ventilation of heat air. It costs $1,500 up to $9,000 for furnace installation, and it depends on the type chosen. 
  • Most HVAC professionals recommend a natural gas furnace to their customers, as it heats up quickly. The unit costs around $700–$6,200, and the HVAC contractor generally charges $1,000–$3,500 for installation.
  • Electric furnaces are less efficient but easy to maintain and environment-friendly. The installation cost of an electric furnace is approx $1,000–$3,500, whereas the unit costs $600–$2,700.
  • Oil heating furnaces are environment-friendly, safer, and more efficient than other furnaces. So, it’s a clear winner. The total cost to install an oil furnace can range from $2,500 to $6,000, and the cost of the unit is $1,800–$3,200. 

Installation of heat pump

Most heating, cooling, and ventilation systems use high-efficiency hybrid options. For instance, heat pumps that combine heating and cooling units and use less energy to save on your electricity and gas bills.

Check out the common types of heat pumps and their installation costs:

  • An air source heat pump (ASHP) absorbs heat from outside a structure and releases it inside during the cold months and also works amazingly well in summer by turning hot air into cool air and circulating it through the entire area. Most people prefer an air force HVAC system for its versatility and affordability, as the unit comes to around $2,000–$5,500 with a $1,300–$2,000 installation charge. 
  • The geothermal heat pump unit uses temperatures from the ground to heat up or cool down the target area. The gross installation cost is around $10,000–$30,000, whereas the unit costs only $3,000–$6,000. 
  • Most residential properties require split heating and cooling units due to their smaller size, duct compatibility, and affordability, as the installation charge is approx. $500–$2,000, and the unit itself is around $1,000–$5,500. 
  • Gas-fired heat pump is suitable for commercial buildings or large residential buildings, and costs you around $3,000–$6,000 with a $1,300–$2,000 installation charge. 

Factors that Affect HVAC Installation Cost in 2023

An HVAC system consists of heating/cooling units and ductwork. A new HVAC system installation cost involves both, whereas the replacement cost will involve one or both.

Regardless of whether it’s a standard central AC unit or an expensive geothermal heat pump, the HVAC contractors generally assess the total price quote of new installation or replacement based on a few constant factors. They are:

Local climate conditions

How powerful an HVAC system is needed depends on the climate of the region where the ongoing project area is located. The southern parts of the US or a tropical region need a larger ton AC unit to cool down any property during summer. 

Similarly, the people of the northern part would expect a much larger heating capacity from an HVAC system, ultimately affecting cost. 

House size 

The size of these systems is measured by Tons or British Thermal Units (BTUs), which refers to how much energy the HVAC system consumes per hour to condition the air inside a home or a targeted room.

The more square-foot your reconstruction site or building has, the more BTUs the HVAC system will need. If it is a large area, it will need multiple HVAC units to cover the entire area.

Likewise, it could be charged around a minimum of $2000 for 1.5 tons’ AC, $3000 for 2.5 or 3 tons, and $3700 for 5 tons central AC for new installation or replacement on average.

House construction

Apart from the size of the home, the heating and cooling efficiency of an HVAC unit also depends on how well insulated the building or personal property is. 

For instance, a room or floor with energy-efficient windows that have no cracks at all for airflow or leakage will require less AC capacity to maintain a comfortable temperature inside. Beside windows, roof,s foundations, attics, flooring, basements, and more factors could also impact the efficiency of insulation.

With improper insulation, you’ll need either a larger size HVAC system or you have to fix the insulation issues. In the end, it will impact installation costs.

HVAC unit types

Several energy-efficient HVAC systems have stepped into the market with higher price tags. A heating and cooling unit with Higher Seasonal Energy Efficiency Ratio (HSPF) or Seasonal Energy Efficiency Ratio (SEER) ratings may have hefty price tags, but at the same time, they will help you save on utility bills every year. 

So, it’s a worthwhile investment but increases the total budget for new installation or replacement. 

Duct Work

If you want to replace the old HVAC unit with the latest energy-efficient HVAC unit, the existing ductwork may require repairs or replacements, as the higher-efficiency heating or cooling units only work with certain ducts. 

Moreover, the ductwork tends to lose its efficiency with time. A new ductwork installation project costs up to $4,000 alone, though it depends on the level of complexity to install or replace.

Project difficulty

 HVAC contractors charge extra installation or replacement costs for older homes that require modifications in insulation or older HVAC units that are harder to access or replace with custom parts.

Trust the well-renowned brands and licensed HVAC contractor

The heating and cooling systems typically come with a hefty price tag. So, choosing a local brand or hiring an inexperienced HVAC contractor over the most trusted brands and HVAC contractors just for the budget is meaningless.

The branded HVAC system usually comes with a longer lifespan, smarter technologies, and better warranties may have a higher price tag, or the popular HVAC companies may charge you more than the local HVAC contractors, but choosing them would be a worthwhile investment.

Tips to Save on HVAC Installation Costs in 2023

Here is how to save some money on HVAC replacement costs:

Purchase the right HVAC unit, neither smaller nor bigger

First and foremost, as an HVAC technician, you could save money on HVAC system costs. Say a big NO to spending extra money on a bigger unit than the adequate size and more bells-and-whistles. 

It is essential to check and compare more HVAC systems to determine what size and advanced features work best for the construction. 

You can also ping specialists and compare their recommendations, research about pros and cons of the selected units, and make sure the selected options are not bigger than your requirements but big enough to heat up or cool down your property. 

Get discount

Manufacturer rebates are another great way to save money on HVAC replacements. You could ask around the internet for rebates or discount offers. Don’t forget to check out the ratings and reviews of the referred manufacturers who will be happy to give you discounts on the HVAC systems.  

Keep things upgraded

Suppose the HVAC system is functioning fine. You should still think about replacing the unit with energy-efficient models or upgrading some parts after a decade. So, talk to your customers and educate them on the importance of upgrading to more eco-friendly models. Also, inform them that repairing according to regular inspection or upgrading some parts will be cheaper than an overall HVAC replacement cost.

Save money on ductwork

A new ductwork replacement may cost around $15 per linear foot, which could boost the overall HVAC replacement cost by 30%. It’s good to upgrade the HVAC unit. 

If the existing HVAC system is in well-working condition, suggest your customer replacing the older unit with compatible custom parts to avoid spending a significant amount of extra cost on new ductwork.

Frequently Asked Questions

What does HVAC installation include?

Most HVAC contractors include a follow-up inspection and monitoring service with a new HVAC system installation package. After installing all the required ducts, pipes, or any supply lines, tubing, and electrical wiring according to the system’s size and capacity for space, they conduct a follow-up inspection after one week.

Why is HVAC installation so expensive?

Installing an HVAC system is a relatively costly but long-term investment. So, you must choose the best HVAC unit and efficiently skilled HVAC contractor near you regardless of budget.

Suppose your home requires dual-zone systems or a powerful AC, but you’ve installed a smaller unit or just a single unit to cut costs. As a result, you will get inadequate heating and cooling effects along with overloading issues.

Only a professional HVAC contractor can guide you regarding the suitable size you need for the climate you live in and individual needs based on your home construction.

How much does a new HVAC system installation cost at 2000 sq ft?

The average cost of a new HVAC system will range between $4850 and $9400. However, the new HVAC system cost varies based on the brand, size of the home, and HVAC installation. 

The HVAC installation costs in a large area of 2,000 square feet come around $7,000 – $8,000 for a 2000 sq ft.

How much time does it take to install a new HVAC system?

To install a new HVAC system, it takes around three to five days. If there is a need for HVAC unit replacement and installation of a new one, it consumes some extra days.

How hard is it to install an HVAC system?

Installing an HVAC system is not as easy as you might think. Only a skilled and experienced HVAC contractor can handle this extremely technical installation process. Apart from this, the technician must have extensive industry knowledge. Otherwise, they could install a system that might leak, provide poor energy efficiency and cause other problems.


A broken or poorly functioning HVAC unit can create give out the poor air quality and can increase the heating and cooling energy bills. Also, replacing an HVAC system is way too expensive. 

This is why installation must be carried out with utmost care. We hope now, as an HVAC contractor, you got some idea of how much an HVAC installation process costs.