Calculator
Heat Pump Cost & Payback Calculator
Size the bill: heat pump installed cost, the 25C tax credit, and how fast the savings pay it back.
Verified August 2026
Select a state to re-price the estimate with local labor and material costs.
Net cost after credit
$6,895 – $9,794
Installed, minus the federal 25C credit
- Installed cost before credit
- $9,835
- Federal tax credit
- $2,000
- Simple payback
- 8.7 years
- 20-year net saving
- $10,165
Estimates only. Local pricing, site conditions and code requirements change the real number.
The formula
Net cost = (tons x cost per ton x efficiency) + permit − tax credit; Payback = net cost / annual savings
The federal 25C credit covers 30% of qualifying heat pump costs up to $2,000 per year. Savings depend on what you are replacing — the swing is largest when displacing electric resistance heat.
Worked example
A 3-ton 17 SEER2 heat pump at $9,600 installed nets about $7,600 after the credit, paying back in roughly 8 years against a $950 annual saving.
Frequently asked questions
How much does a heat pump cost to install?
Typical 2026 installed pricing is $7,000 to $16,000 before incentives, driven mostly by capacity and whether you choose a cold-climate variable-speed system.
Is there still a heat pump tax credit?
The federal 25C credit covers 30% of qualifying costs up to $2,000 per year for eligible high-efficiency heat pumps. Many states and utilities add rebates on top.
Price this job in your state
Same tool, re-priced with local labor, material and permit-fee indexes.
Sources
Sources & verification
Last verified August 2026. Cost figures are modeled estimates based on national baselines adjusted for local labor and material pricing — they are not quotes. Permit rules change; confirm with the building department before starting work.