How much does it cost to replace your HVAC system?

A heat pump replaces both your furnace and your AC in one unit. After the 30% federal tax credit, it often costs less than buying the two units separately.

Tallyard EditorialUpdated April 20, 2026Reviewed against ACCA Manual J, AHRI ratings, and IRS Section 25C (heat pump ITC)

One unit replaces two, and the government pays 30%

When both your furnace and air conditioner need replacing (which happens often since they are usually the same age), you have two options. Option A: buy a new furnace ($3,000-6,000) and a new AC ($3,500-5,000) separately. Total: $6,500 to $11,000. Option B: buy a heat pump that does both jobs. Cost: $6,000 to $13,000 before the 30% federal tax credit, bringing net cost to $4,200 to $9,100. In most cases the heat pump is cheaper than buying both conventional units, and it operates on electricity only, eliminating your gas bill for heating.

How much does it cost to replace a furnace and AC together?

Replacing both a furnace and central air conditioner at the same time costs $6,500 to $11,000 for standard efficiency equipment. High-efficiency (96%+ AFUE furnace with 18+ SEER2 AC) runs $9,000 to $15,000. The combined install saves $500 to $1,000 compared to replacing each unit separately because the HVAC contractor mobilizes once, handles both refrigerant lines and gas connections in one visit, and avoids compatibility issues between mismatched old and new equipment.

Fig. 1. A heat pump after the 30% ITC costs less than a furnace + AC combo in most markets. And it replaces two aging appliances with one new one.

How we calculated these numbers▾

Equipment pricing from AHRI certified product directory cross-referenced with HomeGuide and Angi contractor surveys. Operating costs use EIA 2025 residential energy rates. Heat pump ITC per IRS Section 25C as amended by the Inflation Reduction Act (qualifying heat pumps must meet CEE Tier 1 or Energy Star Most Efficient).

Fig. 2. A heat pump saves $200-1,000/year in operating costs compared to the system it replaces. The savings come from eliminating gas and running a more efficient cooling cycle.

Illustrative example · Richmond, VA (Zone 4)

A homeowner replaced a 20-year-old 80% AFUE gas furnace and 10 SEER central AC with a 3-ton 16 SEER2 heat pump. Installed cost: $9,800. Federal ITC (30%): $2,940. Virginia state rebate: $500. Net cost: $6,360. Previous annual heating and cooling: $2,400 (gas + electric). New annual cost: $1,500 (electric only). Annual savings: $900. Payback on net cost: 7.1 years. If he had bought a new furnace + AC instead: $8,500, no tax credit, annual operating cost $1,600. The heat pump cost $2,140 less to buy and $100 less per year to run.

Composite illustration based on typical project dimensions, regional contractor pricing, and 2026 material costs. Not a specific real project.

Fig. 3. If your system uses R-22 refrigerant, repair is no longer economically viable. R-22 costs $75-150 per pound and is no longer manufactured.

	Heat pump	Furnace + AC
Net cost (after ITC)	$4,200–9,100	$6,500–11,000
Tax credit	30% ITC	None
Fuel	Electric only	Gas + electric
Heats AND cools?	Yes (one unit)	Two separate units
Best climate	Zones 1–5 (moderate cold)	Zones 5–7 (extreme cold)

Heat pumps win in zones 1-4 on both install cost and operating cost. In zones 5-7, a dual-fuel system (heat pump + gas backup) covers both mild and extreme cold.

The sizing mistake that costs $3,000

Oversized HVAC equipment short-cycles, leaving humidity high and wearing out components faster. A 3-ton system in a house that needs 2.5 tons costs more to buy, more to run, and dies sooner. The BTU calculator sizes the system correctly. Do not let a contractor upsell you a larger unit.

For system sizing, use the BTU calculator or heat pump calculator. For insulation upgrades that reduce required system size, the insulation calculator shows the ROI. For the full comparison, read the heat pump vs furnace buying guide.