Heat Pump Installation Costs

There are no standard rates for heat pump installation costs and there is little data on current heat pump installation costs.

Several things seem clear:

  • Homeowners are likely to receive a wide range of bids.
  • Accepted contract prices vary widely across homes.
  • Overall, prices are much higher than expected only a couple of years ago.
  • The high incentives from Mass Save are likely contributing to the high prices.

Escalation of heat pump install prices in Massachusetts

Sources: Building Sector Technical Report for Decarbonization Roadmap Study, page 52; Energy Pathways to Decarbonization (p.97)Residential ccASHP Building Electrification Study (slide 30)Eversource Benefit-Cost Model filing in DPU Docket 21-129 – see MeasureYR1 tab, column M; conversations with heat pump installation coaches and others.?

Return to heat pump outline

Please share your market experiences and observation as comments below!

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

2 replies on “Heat Pump Installation Costs”

  1. I’m in the trade. First, all equipment manufacturers have been raising prices. Heat pumps are no exception. Secondly, I think some contractors have used the run up in energy prices and the ensuing panic from some consumers to increase prices. Energy prices have dropped substantially from this time last year, so that dynamic may be over. Mass Save rebates have definitely added pricing power for installers. Even with incentives, there’s a 2-3x multiple over conventional equipment cost. With operating costs very high due to high electric rates in New England as well as feedback regarding overall lack of comfort relative to conventional heating sources, the uptake for these will be a challenge. In short, the average homeowner who is loathe to spend money on a heating system to begin with is unlikely to spend 2-3x more to get an uncertain result. Those with relatively new equipment (<10 years) will not follow your lead and remove and replace with heat pumps.

  2. My experience in summer 2022, getting quotes from about 10 different contractors, was that labor cost worked out to be between $2000-$2500 per person per day; (i.e. $4K-5K for 2-person 1-day job, etc). Even if one accounts for overhead cost, it’s a very hard to stomach number for most home owners. I’d imagine this year, 2023, it’s even more. Incentives always distort market, and in this case with heat pumps and Mass Save, it seemed to get so out of hand that instead of encouraging people to install heat pumps, it caused the price to increase so much that it may now actually discourages people from considering heat pumps! Of course HVAC contractors love the free money thrown at them, and who knows that might be the intention, e.g. via contractors lobbying.

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