How Much Does It Cost to Install Air Conditioning?

How much it costs to install a new air conditioning unit

The average cost to install a new air conditioning unit is roughly $3,846. However, this average comprises the costs for many different types of air conditioning systems. Depending on the design of your AC unit, you could pay significantly more or less than this average.

Additionally, various factors like where you live, the size of your home, and the efficiency of your AC system all affect the total costs. On top of all this, there may be other HVAC components you need to replace or install at the same time, all of which can tack on additional costs. In total, it can cost over $10,000 to get your HVAC back up and running if you’re unlucky or want the best system money can buy.

Keep reading, and we’ll explain how these factors can impact your total costs. Along the way, we’ll provide money-saving tips and point you to resources to help you pay for your new HVAC system. 

Factors that affect AC unit costs

To make an educated guess at how much your new cooling system will cost, it’s important to understand the factors that affect pricing. To help with this, we’ve broken down the most important factors below. 

Unit type

The type of AC unit you get is the primary factor for estimating installation costs. There are four main AC types:

Central air conditioners

Average price range: $5,152–$9,373

These AC units use refrigerants, condensers, and compressors to cool air. Then, an air handler pumps the chilled air throughout your home via ducts. With a central air system, you generally only have one large AC unit (either in your yard or mounted to your roof) that provides cool airflow to your entire home. 

Mini-split systems

Average price range: $3,599–$6,549

Like central AC units, mini-split systems use refrigerant to cool air. Unlike a central system, though, a mini-split AC doesn’t use ductwork to pump air from an outdoor unit into your home. Instead, each room in a home requires its own wall - or ceiling-mounted unit that only provides cool air to that room. 

Because of this design, this type of AC system is sometimes called a ductless mini-split system. 

Window-mounted AC units

Average price range: $788–$1,434

Window-mounted AC units also use refrigerant to cool air and don’t require ductwork to provide airflow. Instead, a window-mounted unit sits in one of your home’s windows, draws in warm air, cools and dehumidifies it, then circulates it into your home. As with mini-split systems, a large home might require multiple window-mounted units.

Swamp coolers

Average price range: $1,538–$2,798

Instead of using refrigerant to cool air, swamp coolers run warm air from outside a home over moist evaporator pads or mesh. This evaporates the moisture in the pads, cooling the air. Once the air is cooled, the system pumps it into the home. This design gives swamp coolers their other name: evaporative coolers.

The benefits and drawbacks of different AC systems

As you can see, new central air systems tend to cost the most, while window-mounted AC units cost the least. Most window units have much less power than central systems, so they usually can’t cool a whole home with multiple rooms. Window units are typically better for smaller homes or apartments. 

On average, mini-split systems cost slightly less than central systems, though this isn’t always the case for homes with many rooms or “zones.” Each room you want to cool requires its own mini-split AC unit, so the more rooms you have, the more an entire mini-split system will cost you. If your home doesn’t have existing ductwork, going for a mini-split AC system may still be cheaper than adding new ductwork to your home to accommodate a central unit.

Swamp coolers tend to be much more affordable than central and split systems, and they’re also much more energy efficient than central air conditioners. However, they add moisture to indoor air by design, making it slightly swampy. As such, they only work well in warm, arid climates. 

Unit size

Every square foot of your home is a square foot that requires a little extra power to fill with cool air, so the larger your home, the larger—i.e., more powerful—your AC system will need to be. And the more powerful the system, the more it will cost.

The output (or cooling capacity) of HVAC systems is measured in British Thermal Units (BTUs), a measure of energy. One BTU is the amount of energy it takes to raise the temperature of one pound of water by one degree Fahrenheit. Because modern AC units are so powerful that their output exceeds several thousand BTUs, manufacturers often list the output of their units in “tons” instead of BTUs for simplicity. One ton is the shorthand for 12,000 BTUs. To illustrate, a four-ton AC unit is the exact same thing as a 48,000 BTU unit.

A home typically requires a system with one ton of cooling capacity for every 1,000 square feet it has. So, if your home has 2,000 square feet, you’ll probably need a two-ton or 24,000 BTU cooling system. If your home has 4,000 square feet, you’ll need a four-ton system, which will cost significantly more. 

Unfortunately, these are just approximations. You can’t precisely calculate how much tonnage your AC unit needs to cool your home solely based on its square footage. Other factors like your region’s climate, how well-insulated your home is, and the height of your ceilings also play a factor. 

As such, you won’t know exactly how powerful your new AC system must be until you talk to a professional installer who’s seen the layout of your home. 

Unit efficiency

Getting a more efficient AC unit can save you a lot of money on your energy bills. Unfortunately, more efficient units tend to cost more upfront than low-efficiency models.

The energy efficiency of an air conditioner is usually listed in terms of its “seasonal energy efficiency ratio,” otherwise known as its SEER rating. The greater the SEER rating, the more efficient the air conditioner. You can find a unit’s SEER rating by measuring how much heat is removed from a conditioned space during the entire cooling season. This measurement is then compared to how much energy the unit consumed that same season.

According to the U.S. Department of Energy, all residential AC units sold in the U.S. need to have a SEER rating of 13 or greater. Units must have a SEER rating of 14 or greater to receive Energy Star qualification. Any cooling system with an efficiency rating of 14 or more is considered a high-efficiency model. 

If you want to reduce your energy consumption, save money on your power bills, and shrink your carbon footprint, shop for AC units with higher SEER ratings. You can opt for an AC unit with the Energy Star label to simplify things. 

Installing other components 

So far, we’ve only discussed the costs of replacing your air conditioner. However, additional upgrades and replacements might be necessary to meet your needs. In older homes especially, other HVAC system components—such as the ductwork, furnace, or thermostat—might require replacement around the same time as the AC unit.

While replacing or upgrading these components will raise the overall costs of this home improvement project, replacing everything that requires replacing at once is more cost-effective. This will ensure your entire HVAC system runs as efficiently as possible, saving you money on your power bills and saving you a little money on labor costs. 

To give you an idea of what different HVAC components cost to replace, here are the average prices for common HVAC installation projects:

• The average price for a furnace replacement: $2,372–$4,414
• The average price for boiler replacement: $1,500–$15,000
• The average price to replace ductwork: $12–$35 per linear foot

You may not need to replace all of these items at once, though. It’s possible you just need to replace your AC to restore your home’s average temperature. Unfortunately, you can’t really know what requires maintenance until something fails or you meet with an HVAC technician.

AC installation pricing tiers

The budget option

If you need to get your cold air flowing again but don’t have much money to spend, opt for a low-end replacement air conditioner. This might mean getting a system that doesn’t have all the output your home actually requires (not recommended), getting a cheaper type of system than you currently have (switching from central air to a swamp cooler, for example), or getting an inefficient unit. 

Alternatively, you could also try to get your existing equipment repaired instead of replacing it. Repairs are usually much cheaper than wholesale replacements. For example, repairing a central air conditioner’s compressor or condenser is usually thousands of dollars cheaper than installing an entirely new AC unit. Simple repairs aren’t always an option but are worth asking your HVAC technician about.  

To keep costs low, it’s also essential to only replace what absolutely needs replacing. If your ductwork is only a little leaky and your furnace can limp along for a few more years, don’t worry about replacing them right now, as doing so could double the cost of this project. 

Of course, these budget-saving tips aren’t the most cost-effective options. Working with inefficient or improperly sized equipment will cost you substantially more on your utility bills than if you’d upgraded. However, these tips will keep your upfront costs low.

A word to the wise: unless you have hands-on experience maintaining and replacing HVAC components, you shouldn’t try to DIY your air conditioner replacement. While going the DIY route could save you hundreds on labor costs, you run a serious risk of damaging your equipment. This could make the existing problems worse and require a professional to come in and fix everything anyway.

Additionally, DIY installation can void the warranties on HVAC equipment. This means that if some part of your system fails down the road and you installed the equipment yourself, you may have to pay out of pocket to replace everything all over again instead of making a warranty claim.

All told, hiring pros is the best way to get your HVAC working again despite the costs. 

The mid-range option

If your AC kicks the bucket, but you have money in the budget, opt for a new, updated system of the type you already own. While you’re shopping, you should look for a model that runs more efficiently than your old one. This will cost more upfront than getting a low-efficiency replacement, but it will be more cost-effective in the long run because it will shrink your utility bills.

Unless you want to spend a lot of money on this project, it’s probably best to avoid replacing any other part of your HVAC right now unless something absolutely must be replaced.

You probably shouldn’t take this opportunity to switch from a mini-split system or a swamp cooler to a central AC unit. Doing so might require you to install a lot of expensive ductwork. That said, if your home already has the necessary ductwork and you’re financially equipped to make this change, it might be your best decision. 

The high-end option

If you’ve got plenty of wiggle room in your home improvement fund and want to ensure your HVAC system keeps humming for decades, replace every component with a state-of-the-art model. 

This could mean replacing your AC unit, furnace, boiler, and leaky ductwork all at once, but it could also mean making a more drastic upgrade, like getting a heat pump system.

Heat pumps are some of the most expensive HVAC systems money can buy, but they’re also far and away the most efficient. They rely on radiant heat or coldness from outside—either in the air, the ground, or groundwater—to warm and cool a home. They don’t actually use any energy to produce heat.

On average, air source heat pumps cost about $4,461 to install, but they can cost much more than this. In some cases, these HVAC units can cost over $10,000, and if you opt for a geothermal system, you could pay $40,000 or more. Still, if you want the very best system you can get, and money is no object, then you can’t do much better than replacing your old air conditioning system with a heat pump.

How to pay for your new AC unit

The high costs for AC installation might be disheartening if you want to do the job right, but you don’t have thousands of dollars to throw at it. Luckily, there are several ways to cover your costs without breaking the bank. 

Financing through your HVAC installer

Setting up a payment plan and financing directly through your HVAC technicians might be your best option. Many HVAC carriers and installers offer financing, either in-house or through a partnership with a third-party lender.

The exact terms and conditions of the financing depend on the technicians you hire, but they may be able to offer you the best deal in terms of interest rates or payment schedules. To know exactly what financing through your HVAC company will entail, ask your technicians about it during your consultation. 

Of course, you shouldn’t accept whatever financing the HVAC company offers without exploring other options. They could have the best deal, but they could also have the worst one. 

Taking out a personal loan

Taking out a personal loan from a bank or other lender is one alternative to using your installer’s financing. The terms of personal loans are highly variable, and they usually depend on your credit score. If you’ve got good credit and are confident you can pay your loan back in time, a personal loan may work best for you. 

Taking out a home equity loan

If you don’t have great credit, you could take out a home equity loan instead of a personal loan. A home equity loan is like a personal loan in that a lender gives you a lump sum of money, but the exact amount they’ll lend you depends on how much equity you have in your home. Your interest rate will also be highly dependent on your equity, but interest rates for these are often lower than those of personal loans. 

The only downside to home equity loans is that they use your home as collateral. This means that if you can’t pay your loan back in time, the lender could take your home away. So while home equity loans are generally easier to pay back than personal loans, they pose a much greater risk if you default. 

Opening a HELOC

A home equity line of credit—or HELOC—is similar to a home equity loan in that the terms largely depend on how much home equity the borrower has. Additionally, a HELOC also uses your home as collateral. 

The primary way that a HELOC differs from a home equity loan is that it works more like a credit card than a loan. Instead of getting one lump sum of money, this option gives you a new line of credit that you can repeatedly use as long as you stay on top of your payments.

Other factors to consider

One way to make your AC replacement more affordable is to purchase a system that qualifies for a rebate or tax credit.

Rebates usually make your system cheaper by refunding you a certain amount of your spending. The exact terms depend on the rebate, so carefully read the fine print. Rebates may be offered by your state, the manufacturer of your system, or some other organization

Tax credits work a little differently. Instead of sending you cash back on qualifying purchases, they ease the financial burden of your taxes the following tax season. They do this by crediting you a percentage of your project costs on your taxes, though the amount they’ll credit you can differ depending on what type of system you get. 

Remember that only high-efficiency systems are typically eligible for rebates and tax credits. You probably can’t monopolize on these programs if you’re skimping on efficiency to save money, so you’ll have to weigh the benefits and costs of getting a high-efficiency system.

To learn more about air conditioning tax credits, check out this resource from Energy Star. Then, if you want to see what rebates and incentives are available in your area, hop over to this resource from DSIRE. You can often double- or triple-dip by applying for tax incentives and rebates. 

The costs of replacing your AC unit

Though they cost several thousand dollars to install, high-end air conditioners are a worthwhile investment. They keep you and your family comfortable and safe from extreme heat waves. With the various incentives and financing options available, upgrading your HVAC system with a better AC unit is possible, even if you’re working with a shoestring budget.