HVAC replacement cost, SEER2 and payback

What sets HVAC replacement cost

The quote depends on the type of system, its capacity, its efficiency rating and how much ductwork and electrical work comes with it. The only national figures from a federal survey are per job: the Census Bureau's 2023 American Housing Survey counted 12.8 million owner HVAC jobs over two years, with a median of $5,500 and an average of $6,836.^[3] Those cover everything from a single repair to a full system, including do-it-yourself work, so they are a floor for context, not a price for your house.

• Type: central air conditioner with a furnace, heat pump, or a packaged unit.
• Capacity: tons of cooling, set by a load calculation for your house.
• Efficiency: the SEER2 (cooling) and HSPF2 (heat pump heating) ratings.
• Ducts and wiring: new or resealed ducts, a larger circuit, a new thermostat.

SEER2 minimums since 2023

Central air conditioners and heat pumps made on or after January 1, 2023 must meet these federal minimums, and in the Southeast and Southwest, split air conditioners below the regional level cannot be installed:^[1]

The Southeast is Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virginia, the District of Columbia and the U.S. territories; the Southwest is Arizona, California, Nevada and New Mexico.^[1] Before 2023 the national minimums were 13 SEER for split air conditioners (14 in the Southeast) and 14 SEER for split heat pumps, under an older test method,^[1] so a unit's old SEER number and a new unit's SEER2 number are not measured the same way; treat the comparison in the calculator as approximate.

How much a higher SEER2 saves

Cooling energy is capacity times hours divided by efficiency, so the saving grows with your cooling hours and your electricity price. With a 3-ton system, 1,000 full-load hours and the 2025 U.S. average of 17.23¢ per kWh:^[2]

Going from the old 13 to 14.3 saves about $43 a year here; going to 18 saves $133. Divide the extra price the higher-efficiency system costs in your quotes by that yearly saving to see how long the upgrade takes to pay for itself: enter only the price difference in the calculator's equipment field and leave the others blank. In a hot state with long summers and high rates, the hours and the price are both larger, and so is the saving; EIA's state prices are in the calculator's list.

Sizing: use a load calculation

A replacement should be sized for the house as it is now, not copied from the old unit's label: insulation, windows and air sealing may have changed since it went in. Ask the contractor for a room-by-room load calculation and the capacity it supports, and compare quotes at the same capacity and efficiency. An oversized system costs more to buy and cycles on and off; an undersized one runs constantly on the hottest days.

Worked example

A 3-ton (36,000 Btu/h) air conditioner rated 13 SEER running 1,000 full-load hours uses 36,000 × 1,000 ÷ (13 × 1,000) = 2,769 kWh a year, $477 at 17.23¢. A 14.3 SEER2 replacement uses 2,517 kWh, $434: about $43 a year less. Enter your quoted price and the payback appears; for a whole system it is usually long, because most of the price buys cooling you would need anyway, not efficiency.

Tax credits and paying for it

The energy efficient home improvement credit, which paid 30% of a qualifying heat pump up to $2,000 a year from 2023 through 2025,^[4] is not allowed for property placed in service after December 31, 2025.^[5] If you borrow against the house, interest is deductible only when the money buys, builds or substantially improves the home,^[6] and a home equity loan's fixed payment differs from a HELOC's variable one.^[7] Compare both in the home improvement loan calculator or check what a line would cost on the HELOC calculator.