| System | Cost Range | Best For | Rebates Available |
|---|---|---|---|
| Central AC only | $4,000–$8,000 | Mild winters, existing furnace OK | $0–$300 |
| Gas furnace only | $3,000–$7,000 | Existing AC OK, cold climate | $0–$600 |
| AC + furnace combo | $6,000–$12,000 | Traditional, proven system | $0–$600 |
| Heat pump | $8,000–$18,000 | Moderate climates, max efficiency | $2,000–$8,000 |
| Dual fuel (HP + furnace) | $10,000–$20,000 | Cold climates, max savings | $2,000–$8,000 |
| Mini-split ductless | $3,000–$8,000/zone | No ducts, room additions, garages | $2,000–$8,000 |
The Inflation Reduction Act provides two incentives for heat pumps. The first is a $2,000 annual tax credit available to all homeowners who install an Energy Star-certified heat pump — this is a dollar-for-dollar credit on your federal taxes with no income limit. The second is the HOMES rebate program administered by each state, which provides up to $8,000 for heat pump installations for households earning under 80% of area median income, and up to $4,000 for households earning 80–150% AMI. These can be combined: a qualifying household could receive $2,000 tax credit plus $8,000 HOMES rebate for a total of $10,000 in incentives on one heat pump installation. State availability varies — check rewiring.org or your state energy office.
Replace if: your system is 15+ years old and needs a major repair, the repair costs more than 50% of a new system, you are using R-22 refrigerant (phased out, $100–$200/pound to refill), your energy bills have been creeping up despite maintenance, or the system cannot keep your home comfortable on the hottest and coldest days. Repair if: the system is under 10 years old, the repair is under $1,000, and it has been well-maintained. The break-even point is usually around the $1,500–$2,000 repair mark on a system over 12 years old — at that point, the money is better spent toward a new system.