The right heating, ventilation and air conditioning (HVAC) system enhances comfort in your living space, works reliably and keeps utility costs manageable.
Whether adding a heating and cooling system to your living space for the first time or replacing one past its prime, cost-effectiveness is a major consideration. Read on to learn how to budget for a new HVAC unit, covering all critical bases and maximizing bang for your buck.
Air conditioner (AC) units and heating systems can work solo or in combination to keep indoor temperatures just right. Your ideal HVAC system purchase depends on where you live, how large the area you’re heating and cooling is, what your accessibility needs are and your budget.
Luckily, many classic and innovative contemporary options are available, letting you customize your setup according to your unique preferences.
Ducted or central air conditioning units circulate cooled air throughout a living space using a network of ducts. These traditional systems use a refrigerant cooling fluid to absorb heat from indoor air, transfer the heat outside and then channel the cooled air back inside through vents. These systems are generally affordable and have good longevity, although they don’t include a heating option, so you’ll need to install one separately.
Central air conditioning can cost anywhere from $2,000 for a 1.5-ton unit to $3,900 for a 5-ton system. Depending on their specialized features, units larger than 5 tons can cost upwards of $10,000. You may also need to invest a few thousand dollars for ductwork.
Window and wall air conditioners provide localized or decentralized cooling, usually focused on one room. Technicians fit the self-contained units into window frames or through the walls. They draw in outside air, cool it and circulate it indoors, similar to central air conditioning without the duct network. These units are affordable and easy to install, although their energy efficiency is often lower than that of a central AC system.
Window and wall-mounted AC units range from $150 for small capacity units that cool roughly 100 square feet to 250 square feet to over $600 for larger units that can cool between 350 square feet and 550 square feet.
Ductless Mini-Split systems are similar to central air conditioning systems. However, instead of channeling cool air through a network of ducts, they use copper tubing to transport the cooling fluid from the outdoor fixture to several indoor air handlers. They can be used for both heating and cooling, require less invasive construction than ducted solutions, are more affordable than heat pumps and are best suited to homes in areas that stay above freezing temperatures.
Ductless mini-split systems cost between $1,500 and $2,000 per ton of cooling capacity, making them more expensive than central systems. However, central AC installation usually requires extra spending on ductwork, so ductless mini-split options can still be more cost-effective in the long run.
Contrary to their name, heat pumps can both cool and heat your home using a refrigeration cycle similar to traditional ACs. They can be ducted or ductless. People choose heat pumps for their energy efficiency, lower operating costs, environmental benefits, versatility and space-saving design. The government also offers various incentives, like tax credits and rebates, to homeowners installing heat pumps. The units do, however, come with a slightly higher upfront cost.
Before rebates, air-source heat pumps can cost anywhere between $5,500 and $8,000, while the significantly more efficient ground-source heat pumps have a higher upfront cost of $15,000 to $40,000 due to their much longer life spans, installation complexity, material costs and other factors.
Though uncommon in the Southeast, furnaces warm indoor spaces by burning gas or oil or using electricity to heat elements, similar to the mechanisms in toasters and hair dryers. Depending on your preferences, furnace heating can be either ducted or ductless, and it is most effective in colder climates.
Gas furnaces are popular because they’re efficient, wasting very little energy and minimizing resulting utility bills. Other households choose electricity for safety, fuel availability and cost-effective installation.
Electric furnaces are the most cost-effective at $2,500 to $3,500. the more efficient gas furnaces can set you back $3,000 to $4,000, and oil furnaces are the most expensive initial purchase at $5,000 to $8,000.
Get to know the different efficiency measurement systems to make an informed purchase and plan for long-term budgeting. A more efficient heating and cooling system means lower utility bills and a gentler environmental impact. Cooling and heating systems have unique rating methods:
SEER measures how efficiently air conditioning systems cool homes during the warmer seasons. The higher your unit’s SEER rating, the less electricity it uses to provide the same level of cooling. The initial cost of your AC system is generally higher the better its SEER rating, although these higher-priced units save you significant money in the long term.
Similarly to SEER, HSPF measures how well heating systems warm a space during the colder seasons. A higher HSPF rating indicates better efficiency and lower utility expenditure over time, although the initial unit prices are generally higher with better ratings.
Furnaces aren’t measured using HSPF. Instead, oil and gas furnaces are evaluated using the Annual Fuel Utilization Efficiency (AFUE) rating, which measures how efficiently they convert fuel into heat. High-efficiency furnaces often feature condensing technology, allowing them to achieve outstanding AFUE ratings. Electric furnaces heat elements directly with electrical energy, so their efficiency rating is generally considered 100%.
Once you understand the full range of available HVAC options, what their upfront costs are and how efficiently each performs, it’s time to examine additional expenses. Even if your air conditioner is only a decade old, replacing it with a newer, more efficient model can save between 20% and 40% of your cooling energy costs, so initial purchases and additional costs often have a good return on investment.
If you want to install a ducted cooling and/or heating system, you may need to modify your existing duct network or have one installed from scratch. A professional HVAC specialist must inspect your current setup and gauge whether or not its size and layout can accommodate your new system. They will also evaluate the ducts for wear and tear, leaks, insulation integrity and other damage. Costs vary depending on your location and chosen service provider:
If you’re replacing an old cooling and heating system with a new one, you’ll likely need to pay between $60 and $500 to remove and safely dispose of your outdated one. The exact number depends on the type of system and where it’s located in your home, as well as whether hazardous materials like asbestos are present that require specialized materials and skills to remove. Professional asbestos removal typically costs $5 to $20 per square foot.
In the Southeast, building codes vary significantly depending on which state and municipality you belong to. It’s essential to find out through local building departments or experienced HVAC service professionals which specific regional permits you need to install your chosen system. Some examples include:
Typically, permits cost between $250 and $400 and inspections between $100 and $300, depending on your local jurisdiction and the scope of the HVAC project. Larger installations or those requiring extensive modifications may incur higher fees. Some municipalities may require multiple inspections during different phases of HVAC installation, such as evaluations before ductwork is closed up and final inspections once the system is operational.
For instance, in Georgia, it’s common for there to be at least two inspections (initial or “rough-in” and final) for new installations. In Florida, you may undergo several inspections for systems with complex ductwork or when mechanical and electrical permits are required.
An experienced HVAC service provider can help you determine what the permit and inspection needs are for your specific region.
Once your new HVAC system is installed and operational, you’ll still need to keep it running and maintained. Planning for these expenses is part of budgeting for a new HVAC system. Explore ongoing cost considerations below:
According to the U.S. Energy Information Administration’s (EIA) 2020 research, air conditioning accounted for 19% of electricity consumption in American homes, and heating makes up approximately 29% of your utility bill. Fortunately, systems with higher SEER and HSPF ratings will save you money as they make the most of the energy they use. Frequency, intensity of use, climate harshness and maintenance quality all contribute to your system’s cost-effectiveness over time.
To calculate how much your HVAC unit will cost to run, look up your HVAC system’s power rating in Watts (W) on the manufacturer’s website or in your manual. Multiply that number by usage time in hours (h). That will give you your system’s Watt hours (Wh) for that period. You then want to convert this number to kilowatt hours (kWh) by dividing your Wh by 1,000. Multiply that number by your local electricity rates per kWh, and you’ll find out the total amount you’ll need to spend to run the system for that period.
Regular maintenance is essential to boost the longevity and efficiency of home heating and cooling systems. Routine maintenance helps identify potential issues before they become significant problems, keeping the system running efficiently.
Regular check-ups can also extend the unit’s life span, saving homeowners money on premature replacements. Annual servicing costs depend on your service provider, plan and location.
Many states in the Southeast offer various incentives for purchasing energy-efficient HVAC systems. Homeowners may qualify for federal tax credits under the Inflation Reduction Act, which provides incentives for energy-efficient upgrades, including HVAC systems. As of 2024, eligible systems may qualify for a tax credit of up to 30% of the installation cost.
Many local utility companies in the Southeast also offer incentive programs to encourage energy efficiency. These programs often include rebates or discounts on high-efficiency appliances and HVAC systems. Some key examples include:
Warranties are crucial in financial planning and provide peace of mind against unexpected repair costs. Before you purchase, find out the system, parts and labor warranty options, and choose a service provider that offers all of them. Some providers also offer cost-effective preventive maintenance plans accompanied by other ongoing perks like priority customer service, unit repairs and diagnostics discounts and extended system life span.
You should purchase your HVAC system from a reputable source and get maintenance and replacement parts from a trusted, experienced service provider. That way, you’ll know you’re getting authentic, quality products, expert installation, and excellent client support. Browse your potential service providers’ reviews and testimonials online to better understand their reputation and efficacy.
Since 2003, the technicians at Strada Air Conditioning & Heating have maximized home comfort in the Southeast with courtesy, professionalism and an unwavering dedication to quality. We offer exceptional air conditioner and heating system installations, maintenance plans, repairs and other premium services.
We’re here to help your HVAC system remain efficient and reliable so you can enjoy peace of mind, no matter what the weather is like outside. Whether you need a unit upgrade or repair, you can depend on our team to be responsive and here for you. We also offer 24/7 online scheduling.
Are you ready to get started? Contact us online to schedule an appointment with one of our expert technicians today.
Joe Strada, owner of Strada Electric, Security & Air Conditioning, started working at the young age of 14. He’s never attended college, but he has spent his life dedicating his time and energy to his trade and providing high-quality services to his customers. At 19, Joe started working at a well-known air conditioning company and developing his commitment to excellence. He has state certifications in electric, plumbing, air conditioning, residential building and general contracting. During his years of training and experience, Joe noticed a sincere need for a dependable electrical contractor in Florida who embodied the same dedication to customer service in which he believed. In 2003, Joe co-founded Strada Electric, Security & Air Conditioning. Since then, the company has been in the business of providing peace of mind to customers. We offer expert electric, security and air conditioning solutions for homes and businesses, leveraging our experience to deliver professional and responsive service with reliability and respect.
