What Does a New HVAC System Cost?

May 22, 2023
HVAC Crew AC Installation in Detroit, MI

Your home’s heating and cooling system is so critical to your comfort and safety that you don’t want to cut corners to save money. At the same time, you want to know what to consider when evaluating possible systems to install in your home, whether you’re replacing an existing system or installing one in a new construction. Consider what’s normally included and the cost ranges you may see, plus the variables that may affect your final price.

Common HVAC Systems and General Price Ranges

The common HVAC system usually includes a heating system and an air conditioner. In southeast Michigan, the most common is a forced air gas furnace and a central air conditioner. This setup will range in price anywhere from as low as $2,000 to as much as $30,000 or more. The average is between $8,000 and $10,000 when installing both a furnace and an air conditioner.

Of these systems, the most critical is your furnace as it is used to keep your home safe over the winter. This usually runs between about $1,000 and $4,000. If you choose to install an air conditioner separately, this may cost anywhere between $4,000 and $8,000. Keep in mind that high-efficiency systems cost more, as do alternative systems. The following are the factors that will affect how much your system will cost.

System Size

The biggest factor affecting the cost of an HVAC system is the heating and cooling capacity you’ll need. Both air conditioners and furnaces measure their size in British Thermal Units, or BTUs. The higher the capacity a system has, the more it’ll cost.

Getting the right size system will help control your costs, both at installation and over the course of your system’s life. While purchasing a smaller system may cost a little less at installation, it will run longer cycles, need more frequent repairs, and have a shorter service life.

System Efficiency

The price ranges mentioned earlier were for standard efficiency systems. Furnace efficiency is rated in AFUE or Annual Fuel Utilization Efficiency. Air conditioners use SEER or Seasonal Energy Efficiency Ratio.

AFUE is the percentage of heat the system utilizes to heat your home compared to the amount it produces. The minimum AFUE for new furnaces in 2023 is 78%, with mid-range systems rating around 80%. High-efficiency systems have an AFUE of 90% to 98%.

SEER is the ratio between the cooling output over the summer and the amount of energy it consumed. The minimum rating in 2023 is now 14 SEER, which means the system has 14 times more cooling output than the energy it consumes. High-efficiency systems are 16 SEER and above, usually maxing out around 25.

For both furnaces and air conditioners, high-efficiency models cost more than standard efficiency units. Keep in mind that your monthly utility expenses will be lower with higher-efficiency appliances.

Season You Install the System

When you choose to install your HVAC system during the year can also have a significant impact on your cost. Both HVAC installers and equipment manufacturers are busier during the extreme heat of the summer and the frigid cold of the winter. This is due, in part, to the fact that more systems break down during these times and need replacing.

To compensate for lower demand in the spring and fall, both HVAC service providers and equipment manufacturers offer various discounts and incentives. For instance, you may get your equipment discounted from the manufacturer while getting an extended labor warranty from the HVAC installer.

Single or Multiple Zone

Standard HVAC systems have a single zone, meaning there’s one thermostat to control the system. When it runs, it conditions your entire home. A higher-efficiency system may utilize multiple zones where only those areas that need conditioning receive heated or cooled air.

In a central handling system, dampers inside of the ducts will control where the air flows. These can either be operated manually or automatically by a zone panel. Within each zone, sensors signal when the automatic dampers need to open and close. If it uses sensors, a single thermostat sets the temperature for the full house. However, each zone can use its own thermostat and have different temperatures as needed.

Alternative Types of Systems

You can also opt for different types of systems to heat and cool your home. For instance, some people opt for geothermal heat pumps, which use either the ground or a deep-water source as the heat transfer medium instead of the outside air. These systems may run $18,000 to $30,000 or more.

Other popular options include ductless mini-split systems that use individual air handlers around your home rather than a central system. These connect to a single heat pump compressor to provide both heating and cooling. However, you will likely need an auxiliary heater for the frigid temperatures we get throughout the winter. Mini-splits range from about $4,000 to $15,000 to install.

For heaters, some people opt for boilers, which use heated water that runs through radiators throughout the home. These aren’t as popular as they used to be but are still viable in certain instances. Boilers may range from $9,000 to $20,000.

HVAC Extras

HVAC systems have a variety of extras that you can add to the system to make your home more comfortable. You can improve your indoor air quality by installing a whole-house humidifier, air purifier, or air scrubber with your HVAC system. Another extra that can help improve your system’s efficiency is an ERV, or energy recovery ventilator. This helps minimize energy loss when air vents from inside your home.

Incentives and Rebates

There may be a number of rebates or incentives available when you install your system, especially if you’re installing a higher-efficiency system than you had previously. For instance, the Inflation Reduction Act of 2023 has the Clean Energy Tax Credit, which provides 30% back when you install a geothermal system. Then there’s the Energy Efficient Home Improvement Tax Credit, which provides up to $2,000 for installing a heat pump. Work with your installer and tax professional to find out what incentives you may qualify for and how to take advantage of them.

Choice of HVAC Team

The company you choose to install your system will also make a difference in the price. The best companies have NATE-certified technicians. Most factory warranties don’t cover labor should the system malfunction during the warranty period. Some HVAC service providers will offer a labor warranty with the installation and may offer an extended labor warranty for a small additional fee. As you evaluate your quotes, pay close attention to what’s included in the cost so that you can compare the value to the price you’re paying.

For the last 75 years, people around Greater Metro Detroit have turned to C & C Heating & Air Conditioning to keep their homes comfortable. Our NATE-certified team provides heating and air conditioning installation, maintenance and repair together with duct cleaning, indoor air quality solutions and water heater services. Call C & C Heating & Air Conditioning to schedule your consultation with one of our installation technicians today.

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