Air conditioner replacement cost in 2023

Replacing your Air Conditioner is a significant investment and can be a confusing and overwhelming experience. Fear not! We wrote this guide to help. After reading this, you will have the information you need to make an informed decision on navigating air conditioner replacement costs, and various design decisions along the way. In this guide, we’ll cover everything from air conditioner replacement costs and factors affecting pricing to installation considerations and financing options. Let’s get started!

Air Conditioner vs. Heat Pump vs. Furnace vs. Air Handler – What’s the Difference?

The terminology to describe the various equipment that make up heating and cooling systems can be confusing.  Before we delve into the ins and outs of purchasing an air conditioner, lets take a moment to discuss the differences between the various components that can make up your heating and cooling system.

• Air Conditioner: Air Conditioners cool your home.  They do not have the ability to provide heat to your home.  The air conditioner equipment sits external to the home. It is typically placed on a pad, in an area with appropriate clearance.
• Furnace:  Conversely, furnaces heat your home.  They do not have the ability to provide cool air.  Accordingly, air conditioners are frequently paired with furnaces in geographies with varying temperatures across the year.  Furnaces most commonly use natural gas for fuel, but they can run on propane, oil, and electricity in some areas.  Furnaces are located inside the home.
• Heat Pump:  Heat pumps provide both hot and cool air to your home, and thus can be used year-round.  Generally, heat pumps are used in moderate climates, as heat pumps tend to lose efficiency and operability at lower temperatures.  In cold climates, heat pumps can be matched with gas furnaces. In this set-up, known as “Dual Fuel,” the furnace serves as the primary heating source during periods of intense cold.  Heat pumps, similar-to air conditioning systems, are located outside of the home.

Air Handler:  Air handlers are generally paired with heat pumps, and are located inside of the home.  Air handlers move the hot or cold air throughout the home and are a required part of your HVAC system.  Furnaces also are able to move air through the home, and thus do not require a separate air handler.

When should you consider replacing your air conditioning system?

Homeowners should consider replacing their air conditioning system when it is no longer providing optimal comfort, efficiency, or reliability. There are several factors to keep in mind when determining the right time for a replacement:

• Age of the system: The average lifespan of a well-maintained air conditioning system is around 10-15 years. As your system ages, its efficiency and performance may decline, leading to higher energy bills and more frequent repairs.
• Frequent repairs: If you find yourself frequently calling for repairs or experiencing recurring issues with your air conditioner, it may be more cost-effective to invest in a new system rather than continuing to repair an aging unit.
• Rising energy bills: Older, less efficient air conditioning systems can lead to higher energy consumption and increased utility bills. Replacing your system with a newer, more efficient model can result in significant energy savings over time.
• Inconsistent temperatures or reduced comfort: If you are experiencing hot and cold spots in your home or find that your air conditioner struggles to maintain a consistent temperature, it may be a sign that your system is no longer functioning effectively.
• Outdated refrigerant: If your air conditioning system uses R-22 refrigerant (commonly known as Freon), it may be wise to replace your system with one that uses an environmentally friendly refrigerant like R-410A. R-22 has been phased out due to its environmental impact.

Should you just replace the air conditioner (external unit), or the whole system (internal and external units)? 

Homeowners often wonder whether they should replace just the outdoor unit or the entire system, including the indoor unit. While replacing only the outdoor unit may seem like a more cost-effective option, we generally recommend replacing both the indoor and outdoor components for several reasons:

• Compatibility: Newer outdoor units are designed to work with matching indoor units, which ensures optimal performance and efficiency. Mismatched components can lead to decreased efficiency, reduced comfort, and potential system failure.
• System efficiency: By replacing both the indoor and outdoor units, homeowners can take advantage of the latest technology and energy efficiency improvements. This can result in significant energy savings over time.
• Warranty coverage: Most manufacturers require that both the indoor and outdoor components be replaced together to maintain warranty coverage. Replacing only one part of the system could void the warranty on the new equipment, leaving you without protection in the event of future issues.
• Long-term savings: While the upfront cost of replacing the entire system may be higher, the long-term savings in energy efficiency, reduced repair costs, and extended system lifespan can outweigh the initial investment.

Air Conditioner Replacement cost

This is naturally the most common question that homeowners have, and unfortunately, there isn’t a straightforward answer here.  Air conditioning systems come with several design options, including system efficiency, brand, installation considerations, duct quality, and humidity and indoor air quality solutions.  That said, air conditioner installation costs can start as low as ~$4,400 (replacing the external unit only), to upwards of $21,000 depending on the homeowners preferences and additional work required (i.e. ductwork).  In the sections below, we’ll discuss these factors in more detail.

Components included in your air conditioner replacement

High-quality installations include more than just the air conditioning unit itself. For each of our installations, we provide the following, which factor into the overall cost:

• Indoor evaporator coil: This is the part of the system that absorbs heat from the indoor air, allowing the refrigerant to evaporate and cool the surrounding space. The evaporator coil is typically installed in the air handler or furnace.
• Outdoor pad: The outdoor pad is a level, stable surface on which the outdoor condenser unit sits. It helps to protect the unit from debris, dirt, and potential flooding.
• Outside electric disconnect: This is a safety device that allows for the quick and easy disconnection of power to the outdoor condenser unit, making maintenance and repairs safer for technicians.
• Electric conduit: Running from the electric disconnect to the air conditioner, the electric conduit is a protective casing that houses the electrical wiring, protecting it from damage and exposure to the elements.
• New copper line set: This is the pair of refrigerant lines that connect the indoor evaporator coil to the outdoor condenser unit. The line set is crucial for the efficient and effective transfer of refrigerant between the indoor and outdoor components.
• 10-20 feet of PVC pipe: Used as a drain line, this PVC pipe safely transports condensate produced by the evaporator coil away from the indoor unit, preventing potential water damage and mold growth. Proper installation and maintenance of the drain line are crucial for ensuring the system’s overall safety and efficiency.

Factors affecting air conditioner replacement cost

Several factors can impact the price of a residential air conditioning system, including:

• Brand and model
• System size and capacity
• Efficiency rating (SEER)
• Type of system (single-stage vs. two-stage vs. variable speed)
• Additional features and accessories

Selecting the right size air conditioner is essential for optimal performance and energy efficiency. It’s a common misconception that a larger system will provide better cooling; however, this is not the case. One of the leading causes of issues with new systems is incorrect sizing. This can lead to decreased efficiency, higher energy bills, and uneven temperatures throughout the home.

Air conditioner capacity (size)

An undersized system will struggle to cool your home, while an oversized unit will cycle frequently, wasting energy and increasing stress on the system. Proper sizing is crucial for the long-term performance and efficiency of your air conditioning system.

To determine the appropriate size for your home, The Otter Guys perform a detailed heat load calculation. This process takes into account factors such as your home’s square footage, insulation, window types, ceiling height, future home modifications, and the number of occupants. A thorough heat load calculation ensures that your new air conditioning system is sized correctly. This ensures optimal comfort and efficiency and should be completed before each installation.

Impact of System efficiency on air conditioner replacement Cost

Efficiency is a crucial factor when choosing an air conditioner, as it will impact your energy bills and overall comfort. The efficiency of an air conditioner is measured by its Seasonal Energy Efficiency Ratio (SEER). The higher the SEER rating, the more energy-efficient the unit. The government minimum SEER2 rating for new air conditioners is 14.3. High-efficiency models can have ratings of 20 or higher. While more efficient systems have a higher upfront cost, they can save you money on utilities in the long run.  When considering efficiency, it’s essential to weigh the higher upfront cost against energy savings over the system’s lifespan.

For homeowners living in their ‘forever home’, investing in a high-efficiency system can provide significant energy savings over time. However, those who aren’t, may opt for a lower-cost and efficiency option.

Single-stage vs. two-stage vs. variable-speed air conditioners

System efficiency is directly tied to the type of compressor that powers your air conditioner.  Broadly, there are three types of compressors:  single-stage, two-stage, or variable-speed systems.

• Single-stage air conditioners operate in two modes: “100% on” or “off.”  When they are on, they operate at full capacity, which can lead to temperature fluctuations, reduced energy efficiency, and a louder noise profile.
• Two-stage air conditioners have two levels of operation when they are on, high (100%) and low (50%).  This allows for adjustment of their cooling output based on need, provides better temperature control, improved energy efficiency, and quieter operation compared to single-stage systems.
• Variable-speed systems often are designed with “modulating” compressors.  This technology is incredible. The most efficient models can toggle cooling output in 1% increments, starting from 30% capacity.  This design allows the air conditioning unit to precisely match the cooling demands, offering the highest levels of efficiency, comfort, and noise profiles. 

While two-stage and variable-speed systems are more expensive, they are more energy efficient, provide enhanced comfort, and operate more quietly. System efficiency should be clearly noted in the air conditioner replacement cost estimate you receive.

additional air conditioning features and accessories

When you purchase a new air conditioning system, you’ll also need to consider the cost of additional components and accessories, such as:

• Thermostat: $150-$1,200, depending on the type and features (e.g., programmable or smart thermostat)
• Air filter: $10-$100, depending on the type and quality (e.g., disposable or reusable, HEPA or electrostatic)
• Ductwork: $1,000-$15,000, depending on the scope of the project and materials used
• Refrigerant line set: $100-$500, depending on the length and type
• Condensate pump: $100-$250, if needed for proper drainage
• Air quality equipment: $300-$4,000, depending on type (i.e. clinical grade UV light, steam humidifier, etc)

Ductwork: an essential part of your HVAC system!

Ductwork is a critical and often overlooked component of a properly functioning HVAC system.  The duct system is the “straw” that distributes the cool air “blown” by the air conditioning system through the home.  Air conditioning systems supported by improper ductwork will not be able to fully realize its energy savings and comfort potential.  At The Otter Guys, we will not recommend a more efficient system to a homeowner unless the ductwork is correct. Without proper ductwork, the ac unit will not fully deliver its promised benefits.

Issues with ductwork can include incorrect sizing, duct leakage, and inefficient design. Incorrectly sized ducts can cause hot and cold spots in the home and put unnecessary stress on the HVAC system. Duct leakage can result in energy loss as conditioned air escapes before reaching its intended destination. Inefficient duct design can also lead to poor airflow and uneven temperatures throughout the home.

To ensure that your air conditioning system performs, it’s essential to address ductwork issues during the installation process. This may involve sealing leaks, insulating ducts, resizing ducts, or even replacing old, inefficient ductwork.

If a portion of the ductwork needs to be replaced, such as a supply or return box, costs could range somewhere in the $500 to $2,000 range, depending on the nature of the required work.  This work typically will add between half a day to a day of installation time. However, if the whole duct system need to be replaced, the price could be anywhere from $5,000 to $15,000 or more, depending on the size of the system and the complexity of the home.  This work may add anywhere between 1 to 5 days of additional time to complete the installation.

zoning systems

Another option that relates to controlling airflow is zoning.  A zoning system divides your home into separate areas or “zones,” each with its own thermostat, allowing you to customize the temperature settings in different parts of the house. This is particularly useful in homes with multiple floors or areas that have unique heating and cooling requirements, such as rooms with large windows, sunrooms, or basements.

By incorporating a zoning system, you can reduce energy waste by only conditioning the areas of your home that are in use or require temperature adjustments. This can lead to significant energy savings and a more comfortable living environment. Additionally, zoning systems can help alleviate issues with uneven temperatures, hot and cold spots, and over-conditioning of unused areas.

When installing a zoning system, dampers are placed within the ductwork to control airflow to each zone. These dampers are connected to a central control panel, which receives temperature information from the thermostats in each zone and adjusts the dampers accordingly.  Dampers can also be adjusted manually.  For instance, since warm air rises, the dampers can be adjusted to direct warm air to lower levels of the home in the winter, or cool air to upper levels of the home in the summer. 

Adding a zoning system may cost anywhere between $1,000 to $4,000 depending on the complexity of the system, and could add between half a day to a full day to the installation of your new air conditioning system. If you choose to install a zoning system, the cost will be highlighted individually in your air conditioner replacement cost estimate.

Line set protection

The line set is the pair of refrigerant lines that connect the indoor air handler to the outdoor condenser unit. It’s essential to protect these lines from damage, such as punctures or corrosion, and to replace them when necessary, particularly when transitioning refrigerants from R-22 to R-410A.

Impurities or contaminants that remain in the line set can harm system performance and reduce the lifespan of the new air conditioner. Replacing the line set greatly minimizes the risk of system damage from residual impurities.

Humidity Control

Maintaining proper indoor humidity levels is very important for both comfort and overall health.   Poor humidity control can be damaging to the home and to health.  Low humidity can lead to dry skin and sinus irritation.  High humidity levels can lead to mold and related respiratory issues. 

humidifiers

There are several humidification solutions to achieve the ideal humidity in your home, including fan humidifiers, bypass humidifiers, and steam humidifiers.

• Bypass humidifiers work in conjunction with your home’s heating system. Warm air from the furnace is used to evaporate water from a panel, which is then distributed throughout your home via the ductwork. Bypass humidifiers are energy-efficient, as they do not require a separate fan and utilize the existing airflow from your heating system. However, they only operate when the furnace is running, which may limit their effectiveness in maintaining consistent humidity levels. The cost to install a bypass humidifier in in the ~$800 to $1,200 range.
• Fan humidifiers are whole-house systems that use a fan to blow air across a water-saturated wick, introducing moisture into the air. These systems can be installed as part of your existing HVAC system and are known for their quiet operation and relatively low maintenance requirements.  The cost to install a fan humidifier ranges from ~$1,100 to ~$2,000, depending on model type and water line access. Humidifier options are listed separately in your air conditioner replacement cost estimate.
• Steam humidifiers are the most advanced and efficient option for whole-house humidification. They generate steam by boiling water and then distribute it throughout your home using your HVAC system’s ductwork. Steam humidifiers provide precise humidity control and can operate independently of your heating or cooling system, allowing for year-round comfort and improved indoor air quality.  Steam humidifiers can cost anywhere between $2,500 to $4,500 depending on the model and water line access in the home.

dehumidifiers

There are a number of dehumidification options that can be integrated with your HVAC system to help maintain optimal humidity levels.   Consider these to avoid the mold growth, musty odors and increased allergens that may arise at elevated humidity levels.

• Whole-house dehumidifiers are designed to work in conjunction with your existing HVAC system. They remove excess moisture from the air as it circulates through the ductwork, maintaining a comfortable humidity level throughout your home. These systems are energy-efficient and can operate independently of your air conditioning system, providing dehumidification even when cooling is not required.  Dehumidifer costs can range between $1,500 an $4,000 depending on model, access, and water line arrangement. This accessory is noted as a separate line in your air conditioner replacement cost estimate.
• HVAC systems with built-in dehumidification functions offer another option for controlling indoor humidity levels.  Generally, higher-end two-stage and variable speed air conditioners and heat pumps (as mentioned earlier) are equipped with features which enable them to operate at lower capacities, providing better humidity control without overcooling your home.
• Additionally, certain thermostats and HVAC control systems offer advanced dehumidification settings that can help maintain desired humidity levels. These controls may work in tandem with your air conditioning system, adjusting its operation to optimize both temperature and humidity control.

air purification solutions

Various air purification options can help remove airborne contaminants, allergens, and pathogens, ensuring a cleaner and safer environment for you and your family. One effective air purification option is the use of ultraviolet (UV) lights, which are designed to inactivate or eliminate airborne microorganisms such as bacteria, viruses, and mold spores. UV lights can be installed within your HVAC system, typically in the ductwork or near the evaporator coil, to treat the air as it circulates throughout your home.

uv light options

There are different types of UV light options available, ranging from entry-level to clinical-grade systems, depending on your specific needs and budget:

• Entry-level UV lights provide a basic level of air purification and can help reduce the growth of mold and bacteria within your HVAC system. These systems use a single UV lamp and are generally more affordable than more advanced options.  Typical costs of these systems are in the ~$200-$500 range.
• Mid-range UV light systems offer enhanced performance and additional features, such as improved lamp life and higher intensity output. These systems are more effective at inactivating a wider range of microorganisms and can help improve overall indoor air quality.  Typical expense of these systems are in the ~$600-$800 range.
• Clinical-grade UV light systems provide the highest level of air purification, utilizing advanced technologies such as germicidal UV-C lamps and photo-catalytic oxidation (PCO) to eliminate a broad spectrum of airborne contaminants, including viruses, bacteria, mold, and volatile organic compounds (VOCs). These systems are often used in healthcare settings, but can also be installed in residential homes for those seeking the best possible air quality.  Typical cost of clinical grade UV light systems are in the ~$1,300 to $1,600 range.

In addition to UV light systems, other air purification options include HEPA filtration, activated carbon filters, and electronic air cleaners, which can be used in conjunction with UV lights to create a comprehensive indoor air quality solution.

Electrical modifications and impact on air conditioner replacement cost

Upgrading your air conditioning system may require electrical modifications to ensure the new unit operates safely and efficiently. These modifications can include updating the circuit breaker, installing a new disconnect switch, or rewiring to accommodate the new system. Electrical modifications can cost between $300 and $2,100, depending on the complexity of the work.

condensate drainage

Proper condensate drainage is essential to prevent water damage and maintain indoor air quality. Options for condensate drainage include gravity-fed drains, condensate pumps, or evaporative condensate systems. The cost for a condensate drainage system ranges from $100 to $500, depending on type and complexity.  At The Otter Guys, we include this cost as part of our air conditioner replacement cost estimate.

Proper condensate drainage is essential to prevent water damage and maintain indoor air quality. A correctly installed drain line ensures that the condensation produced by your air conditioning system is safely removed from your home. If the drain line leaks or becomes clogged, it can lead to water damage, mold growth, and other issues.

The Otter Guys install an EZ trap on every new system for added peace of mind. The EZ trap is an easily accessible condensate trap that helps prevent potential issues with overflow.

By addressing condensate drainage during the installation process, you can protect your home from water damage.

Tax rebates and credits

When purchasing a new, energy-efficient air conditioning system, you may be eligible for tax rebates and credits. These incentives can help offset the cost of the new system and encourage homeowners to invest in energy-efficient technology. Be sure to consult with a tax professional to ensure you take full advantage of rebates you may qualify for.  The Inflation Reduction Act includes rebates for a range of energy efficient heating and cooling equipment, including Heat Pumps.   Be sure to raise this idea with your tax professional as well.

Total air conditioner replacement cost tiers

Taking into account the factors we’ve discussed, the total cost to replace an air conditioner can fall into several tiers:

• External unit replacement only: $4,000 to $7,000.  This range typically includes a basic, single-stage outdoor unit, and does not include replacement of the air handler
• Low-tier complete system: $7,000 to $9,000 – This price range typically includes a basic, single-stage air conditioner with a lower SEER rating and minimal additional features or modifications.
• Mid-tier: $9,000 to $14,000 – In this range, you’ll find higher efficiency systems, possibly with variable-speed technology, and some additional features or necessary modifications.
• High-tier: $13,000 to $27,000+ – This tier includes the highest efficiency systems with advanced features, such as smart thermostats or zoning capabilities, as well as more extensive ductwork modifications or other installation complexities.

Why Air Conditioner costs change

Air conditioner replacement cost can vary based on several factors, including:

• Geographic location: Labor and material costs can vary significantly depending on where you live.
• Time of year: Demand for air conditioner installations tends to be higher during peak cooling seasons, which can impact pricing.
• Inflation:  In the current inflationary environment, equipment prices have increased on average every 3-6 months for the last two years

conclusion: AC REplacement Cost

Choosing the right residential air conditioner involves considering several factors, such as system capacity, efficiency, and ductwork . By understanding these factors and working with a reputable, licensed HVAC contractor, you can select a system that best meets your needs and budget, providing optimal comfort and energy efficiency for your home.

At The Otter Guys, we pride ourselves on offering outstanding quality, friendly customer service, and technical excellence. Our team of professionals is here to help guide you through the process of selecting the perfect air conditioning system for you. Contact us today to schedule a consultation and take the first step toward a more comfortable, energy-efficient home.