How Much Does a New Heat Pump System Cost in Indiana?

If you’re considering upgrading your home’s heating and cooling, heat pumps are well worth a look. The average cost of a new heat pump system typically falls between $5,000 and $12,000 in Indiana, though some installations can reach higher depending on your specific needs. This investment covers the equipment and professional installation, providing you with an efficient system that handles heating and cooling in Johnson County’s changing seasons.

Key Takeaways

• The average cost to install a heat pump in Indiana is generally between $5,000 and $12,000.
• Variables like system size, efficiency ratings, and installation complexity affect the final price.
• Replacing an existing heat pump often costs less than a new installation since the infrastructure is already in place.
• Heat pumps are worth it in Indiana because they provide heating and cooling with greater energy efficiency than traditional systems.
• Working with experienced local technicians who understand Indiana’s climate helps optimize system performance and longevity.

New Heat Pump Installation Costs in Indiana

The cost of a new heat pump varies widely depending on your home’s specific requirements and the system you choose. For most homeowners in Franklin and surrounding communities, a complete heat pump installation involves equipment, labor, and any necessary modifications to your home’s existing infrastructure.

Smaller homes in Greenwood with basic heat pump installation needs might see costs on the lower end, around $5,000 to $7,000. Mid-sized homes with standard configurations often fall in the $7,500 to $10,000 range. Larger homes or properties requiring significant modifications, additional ductwork, or premium high-efficiency systems can reach $12,000 to $15,000 or more, depending on the scope of work.

The type of heat pump you choose also impacts the overall investment. Traditional ducted systems generally cost less upfront than ductless heat pump configurations. Indiana’s climate makes heat pumps an increasingly popular choice. Modern heat pumps perform efficiently even during our coldest winter months, with advanced models including backup heating elements.

Average Cost to Replace a Heat Pump

The average cost to replace a heat pump ranges from $4,500 to $10,000 for most Indiana homeowners. Replacement projects can cost less than brand-new installations because the necessary infrastructure is already in place. However, replacement costs may increase if your current system is outdated and requires updates to meet modern standards, such as electrical panel upgrades or ductwork modifications.

If your current heat pump experiences frequent breakdowns, struggles to maintain comfortable temperatures, or your energy bills have increased significantly, replacement may make more financial sense than continued repairs. 

Heat Pump Cost Factors Indiana Homeowners Should Know

Several variables influence the final price of your heat pump system. By taking the time to understand these factors, you can budget appropriately for your home’s comfort needs.

Size & capacity

Size directly impacts the cost of a new heat pump system. HVAC professionals measure capacity in tons, with residential systems typically ranging from 1.5 to 5 tons. Our NATE-certified technicians perform detailed load calculations that account for your home’s square footage, insulation levels, window placement, and other factors to determine the right size.

For a typical 1,500-square-foot home in Columbus, IN, a 2.5 to 3-ton heat pump often provides adequate heating and cooling, though actual sizing varies based on insulation, ceiling height, and home layout. Properly sized systems maintain comfortable temperatures without wasting energy or experiencing premature wear.

Efficiency ratings

Efficiency ratings significantly affect both the upfront cost and long-term operating expenses of your heat pump. The Seasonal Energy Efficiency Ratio (SEER) measures cooling efficiency, while the Heating Seasonal Performance Factor (HSPF) indicates heating efficiency. Higher ratings mean better performance and lower energy consumption.

Standard efficiency heat pumps have SEER ratings of 14 to 16, whereas premium high-efficiency systems may boast SEER ratings of 18 or higher. For homeowners who want an energy-efficient heating system, investing in a more efficient model can provide long-term value through lower monthly utility costs.

System type

Traditional air-source heat pumps are the most common and affordable option, transferring heat between your home and the outdoor air. Ductless mini-split heat pumps offer flexibility for homes without existing ductwork. Geothermal heat pumps represent the premium option with exceptional efficiency, but installation requires significant excavation work. 

For most Johnson County homeowners, air-source heat pumps provide the best balance of performance, reliability, and value.

Site & installation complexity

Your property’s specific characteristics can significantly impact installation costs. Homes with straightforward access, existing compatible electrical service, and well-maintained ductwork often fall on the lower end of the price spectrum. Properties requiring additional work see higher costs.

If your home needs electrical upgrades to support the new system, you might budget an additional $500 to $2,000. Homes with damaged ductwork may need repairs or replacement, while properties with challenging outdoor unit placement can add $500 to $1,500. Older homes may need additional modifications like upgrading thermostats or adding supplemental insulation. 

Our technicians assess your property during the initial consultation to identify any potential challenges and provide accurate cost estimates.

Labor costs

Professional installation represents a significant portion of your total investment, often accounting for 30% to 50% of the project cost. Working with NATE-certified technicians who understand local building codes and climate conditions adds immeasurable value beyond basic installation.

At Dugan Air, our EPA-certified technicians bring years of experience installing heat pumps across Indianapolis and throughout Johnson County. We know the local requirements, understand how Indiana’s climate affects system performance, and stand behind our work with comprehensive warranties. Our Premium Service, No Shenanigans approach means you get honest assessments, transparent pricing, and quality workmanship without the gimmicks.

Ways to Save on Heat Pump Installation

You can offset the cost of a new heat pump system without compromising quality or performance in several ways. 

• Heat pumps qualify for federal tax credits under the Inflation Reduction Act. 
• Local utility companies throughout Indiana frequently offer rebates for installing qualifying heat pumps.
• Dugan Air offers flexible financing plans with approved credit, allowing you to spread the cost over manageable monthly payments.
• Regular maintenance after installation protects your investment and helps prevent costly repairs.

Keeping your system well-maintained extends its lifespan and helps you avoid expensive emergency breakdowns that could require a heat pump replacement. If you’re wondering whether you can replace a gas furnace with a heat pump, our technicians can assess your Indiana home and recommend the most cost-effective approach.

Invest in Year-Round Comfort With an Energy-Efficient Heat Pump

Now that you better understand the cost of new heat pump systems, you can make an informed decision about your home’s heating and cooling needs. While the initial investment can be higher than traditional gas furnaces, modern heat pumps offer long-term value through reduced energy bills, lower maintenance costs, and reliable performance in both summer and winter. 

At Dugan Air Heating and Cooling, we’re committed to delivering Golden Service to homeowners throughout Franklin, Columbus, and surrounding Johnson County communities. Contact us today to discuss your heat pump options and receive a free estimate. Experience the Dugan Difference with a touch of Irish charm and a strong commitment to your comfort.

Dan Dugan

President
Dan Dugan is the President and co-owner of Dugan Air Heating & Cooling. A licensed HVAC professional with over 25 years of industry experience, Dan brings extensive technical expertise and leadership to the company he and Sue founded in 2009. He remains deeply involved in training, innovation, and maintaining the company’s reputation for integrity-driven service across Central Indiana.