Thinking About a Heat Pump? Here’s What It Costs and How Much It Could Save

Heat pumps are 2-in-1 units that provide efficient heating and air conditioning to your home. Also referred to as air-source heat pumps or heat pump HVAC (heating, ventilation, air conditioning), heat pumps harvest heat from the surrounding air instead of creating it, making them highly efficient. Powered by electricity rather than gas, they reduce fossil fuel pollution while providing year-round comfort.

Thousands of dollars in rebates and installation support are available from Silicon Valley Clean Energy to help residents upgrade old gas furnaces to heat pump systems. Additional incentives are available from local cities. In this article, we’ll walk you through what you can expect to spend and save on a heat pump system.

According to an analysis of over 1,000 real projects submitted by Silicon Valley Clean Energy (SVCE) rebate participants, the median cost of a heat pump heating and cooling system is $18,900, including equipment and labor.

The actual cost depends on a variety of factors, including central versus ductless systems, unit size, and labor and materials. To ensure you have the best options, we recommend obtaining quotes from 2-3 service providers.

As a reference point, below is a sample project estimate from the Full-Service Home Upgrades program by Silicon Valley Clean Energy, which provides pre-vetted contractors to install heat pump systems and apply for rebates, all with transparent pricing. Prices are all-inclusive and cover equipment, materials, prevailing wage labor, and a standard one-year warranty.

A recent study by Silicon Valley Clean Energy (SVCE) and WestLight Energy shows that despite recent increases in electricity rates, heat pumps can help customers throughout the Bay Area save money on their utility bills today. Analysis was conducted using real-world SVCE rates and market-ready equipment.

In the South Bay, heat pump heating and cooling can deliver $6,000-$8,700 in average lifetime (15-year) bill savings compared to existing gas furnaces.

Homes adding air conditioning for the first time may see slight bill increases, but this can be avoided by installing a variable capacity or inverter heat pump, which saves energy by matching heating or cooling output to real-time temperature needs.

To maximize savings with heat pump heating and cooling:

• Choose a high efficiency heat pump. Look for a variable capacity or inverter heat pump. On mild days, it runs at lower capacity, while on more extreme days, it ramps up to meet demand, providing more consistent comfort and greater efficiency compared to single or double-stage heat pumps. Additionally, look for SEER (Seasonal Energy Efficiency Rating) of 17 or greater or SEER2 of 16 or greater.
• Choose the correct unit size for your home. An oversized system may turn on and off more often than necessary because it heats or cools your home too quickly. These frequent cycles can put extra strain on the equipment and create uneven temperatures.
• Pair with home weatherization upgrades, such as air sealing and insulation to reduce energy leaks through doors, windows, walls, attics, and other gaps.
• Enroll in a heat pump-friendly rate plan, such as E-ELEC or EV-2A. These rates are designed to reduce costs for homes with heat pumps and offer high discounts on off-peak electricity between 12 a.m. – 3 p.m.
• Use optimal seasonal settings. Set your thermostat to 68°F (Heat) in winter and 74°F (Cool) in summer. Avoid Auto mode, which can increase energy use by switching between heating and cooling.
• Inspect filters every season. Set a reminder for regular cleaning and replacement.

Home Rebates by SVCE are available for all customers, including extra rebates for income-qualified households. Certain cities may also offer additional rebates. Maximize savings by stacking rebates from different sources.

Income-qualified renters and homeowners may receive heat pump installation at 100% no-cost through SVCE.

Rebate amounts are subject to change.

Typically, rebates are available for a limited time or until funds run out. Rebate providers, including SVCE, may also require reservations before installation. It’s best to apply for rebates as soon as you start your project.

Tự phục vụ Các Khoản Hoàn Tiền

If you already have a contractor or prefer to install a heat pump yourself, reserve your rebate and claim your reimbursement through the SVCE Home Rebates program.

Full-Service Installation and Rebates

Take the hassle out of your installation with the SVCE Full-Service Home Upgrades program. Our pre-vetted contractors will handle your project from start to finish, including a free assessment, installation with warranty, and applying for permits and rebates.

No-Cost Installation for Income-Qualified

Renters and homeowners who meet income qualifications may receive 100% no-cost heat pump appliances and installation. White-glove support includes pre-vetted contractors, a free assessment, installation with warranty, and applying for permits and rebates.