Heat pumps can be expensive. Here's what you can do about it.

Heat pumps are the best way to start heating and cooling your home with cleaner energy—even in places with cold winters. Modern high-performance heat pumps can keep you comfier than traditional HVAC, and might even cost less to install and to run than the alternatives.

So what are you supposed to make of it if you end up getting a sky-high quote for a new heat pump? The truth is that heat pumps don't always save money—and sometimes it's not even close. But maybe you got one ridiculous proposal from a contractor you're better off avoiding. And even if the price is steeper than you'd hoped for, there are plenty of great reasons to make the switch anyway. Here's how to sort through the possibilities.

The average quoted cost of a heat pump after incentives on the EnergySage Marketplace is $16,500, but projects regularly stretch to $25,000 and beyond. Large multi-zone systems can hit $45,000, and we've seen a couple of projects that were even pricier, once other must-do upgrades were bundled in. It all depends on the house.

Surprised that a heat pump can cost as much as a car? That could actually be the fair market rate. The only way you’ll know for sure is to get multiple quotes.

Some projects on the EnergySage Marketplace get bids from three different contractors who are all charging essentially the same price. That’s a sign that you’re getting a decent deal.

Other times, we see three quality installers give three wildly different bids—the gap has been as wide as $5,000, even though the scope of work is basically the same. So it can pay to explore your options.

Shopping around isn’t always easy: 

• They don’t give out quotes like candy: Most installers won’t give quotes without first making a site visit, and that takes up a lot of everybody’s time. Even if they do agree to give you an estimate over the phone or email or whatever, they could later find that your existing ductwork or electrical service needs modifications to work well with a heat pump, adding thousands to the price.

• There aren’t enough quality installers to go around: This is more likely to be true in cold-weather parts of the country, where there aren’t many pros who have experience with high-performance heat pumps yet. In states with big heat pump incentives in place, the qualified contractors tend to be busy, and don’t necessarily need to compete for your business. In cold-weather states without big heat pump incentives, most contractors don’t even install heat pumps in the first place (at least for now).

If you can afford to be patient and diligent, you’ll be in a better position to find a deal. So start shopping early—well before you think your existing HVAC system might croak, so you have a good plan for what to do when you really need a new system.

Whoever you end up choosing, make sure that they’re performing a quality system design and installation.

Plenty of homes are fine for a heat pump as-is. In other homes, a proper, by-the-book heat pump installation might call for ductwork or electrical upgrades, which typically cost at least $1,000. It might also make sense to put in better insulation, and tighten up any air leaks. The colder your winters and the older your building, the more likely it is that you'll need some changes like these.

You can sometimes bend the rules and skip certain upgrades, but there will be downsides. And some contractors will just walk away from the proposal if you try to insist on cutting corners—they're on the hook for maintenance calls, after all.

But if you think about a heat pump upgrade more like a renovation than an appliance replacement, is it easier to stomach the price tag?

A well-done HVAC system built around an inverter heat pump not only covers your basic heating and cooling needs, but also makes your home much more energy-efficient, comfortable, healthier, and arguably future-proofed. Here’s what the extra upgrades could get you:

• The heat pump could run 20-50% more efficiently, which means long-term savings on energy costs.

• The heat pump could last longer, because the fan and compressor spend more cruising time in their comfort zone, instead of fighting against small, restrictive ductwork and the stresses of short-cycling.

• Every room could be comfortable all the time if you invest in better weatherization, proper humidity control, and balanced airflow from the ducts (or a properly designed ductless system).

• Your indoor air quality could be much better, thanks to tighter ducts, high-quality filtration, and proper ventilation. You won’t have to burn gas or oil inside your home anymore, either.

• Your home is future-proofed with everything you need for all-electric heating and beyond. Someone will be on the hook for these upgrades as fossil fuels phase out in the next few decades. If you do the work now, it could raise the future value of your home in the eyes of potential buyers.

A whole-house, all-in heat pump retrofit won't fit everybody's budget. 

A backup heating system combined with the heat pump can be an excellent money-saving compromise. It's counterintuitive that two heaters could cost less than one—but sometimes it works out that way.

This setup can be called a hybrid heat pump, or a dual-fuel heat pump, but it’s all a variation on the same theme: The heat pump handles all your cooling, and most of your heating, then switches to a traditional heating system once the weather drops below a temperature (of your choosing).

By relying on a traditional heating system for the coldest parts of the winter, you might be able to install a cheaper heat pump, skip some costly infrastructure upgrades (at least until the next time you need a new HVAC system), and get most of the same benefits for comfort and efficiency. Some people want the backup for peace of mind, too.

There are a handful of common ways to do a hybrid setup:

• Electric resistance heat, aka heat strips, either built into the heat pump, or inside your ductwork, or in the form of baseboard radiators. It’s cheap to install, though expensive to run. 

• An old fossil heat system. Ductless mini-splits pair very nicely with existing hot-water or steam radiators—it’s a common setup in parts of the Northeast. With ducted HVAC, it can be kind of clunky to pair up a brand-new heat pump with an older furnace, but there are ways to do it.

• A new, integrated furnace/heat pump combo. Furnaces don’t cost much. Depending on what brands you’re looking at, it sometimes costs less to install a new furnace and a new mid-tier heat pump than it does to install a full-on cold-climate heat pump.

• A partial-home heat pump. This isn’t quite a hybrid setup—you’ll only have the heat pump serving certain rooms, not the entire house. But it’s one more option in the HVAC arsenal to consider.

With free electricity, it's hard to beat a heat pump—even if it's much more expensive to install than any alternatives. With enough solar panels (and favorable billing policies), this is actually possible.

This all gets a little bit mathy, so you can ask some clean energy experts (like the Energy Advisors at EnergySage) to help with the details. But if you want to make your own estimates, here’s what you’ll need to know:

• How much electricity it’ll take to run your heat pump

• How many solar panels you’ll need to generate that much electricity 

• How much it’ll cost to install those solar panels

• How much extra (if anything!) it’ll cost to install an all-climate heat pump versus a typical furnace-AC combo

• Whether you have enough space on your roof (or elsewhere on your property) to fit as many solar panels as it’ll take to offset the energy use from your heat pump and all your other appliances, electronics, vehicles, and so on.

Then you can do some math to figure out your payback period. Here’s one example, using numbers that are pretty realistic for an average home. 

• It costs an extra $6,000 (after incentives) to install an inverter heat pump vs. a typical furnace-AC combo

• It’s another $10,000 (after incentives) to add enough solar panels to offset the heat pump’s annual energy use—assuming you have enough space to fit everything, which is not a given.

• You’d pay $2,000 per year to run a gas furnace and central AC.

So the extra upfront cost for all the clean-energy equipment is $16,000 over the cost of “regular” equipment, vs. an annual savings of $2,000. That’s a payback period of 8 years, which is a healthy number. A heat pump should last for 15 years, and solar panels are typically under warranty for at least 20 years, so you should have many, many years of truly free heating and cooling. 

You can plug in the numbers for your particular situation, but that’s how to think about the cost-benefit.

When you register for the EnergySage Marketplace, vetted local installers will compete for your business—for solar panels, for batteries, for heat pumps, or all of the above. Throughout the process, you’ll be able to talk to a dedicated Energy Advisor, who can help you compare quotes and walk you through all your options. Sign up to learn more today.