Why does AC installation cost so much?

Why does AC installation cost so much?

When you think of installing a new AC, you think of it as an appliance. With a dishwasher, you purchase the model you want, get someone to install it, and — voilà — we are up and running. The cost of this is generally the labor cost of a handyman plus the cost of the appliance.

An AC is a part of the whole HVAC system of your house. So it is unhelpful at best, and disingenuous at worst, to publish a price range for installing an AC.

There are many factors that go into the cost of the installation of an AC. Here are some important ones.

The size of the AC

Unlike a dishwasher where you can determine the size of the dishwasher, you need a professional to evaluate the size of the unit for your house.

It is very important to get the size of the unit correct. If you get a bigger one, then the unit will turn on and off frequently resulting in wear and tear of the equipment. You will also spend your money in energy for this inefficiency. The biggest issue is that you are going to have comfort issues – noisy equipment, hot and cold spots in the house, etc.

If the unit is not sized correctly, your equipment will not be able to keep up with the demands of making your home comfortable.

Energy efficiency

SEER (Seasonal Energy Efficiency Rating) ratings measure the energy efficiency of an AC. Purchasing a higher energy efficient unit will be more expensive. In the long run though, it will cost you a lot less in energy bills. EER tells you miles/gallon about how efficient your equipment is. This has been tested in the factory’s controlled settings where they send this information to dept of energy to tell them how efficient this equipment is.

Duct work

Ducts are the tubes that carry the cold (or warm) air to the various rooms in your home. If you need to replace these, it will cost you a lot more. The cost of duct work varies depending on many factors, including the following:

  • Size of the home
  • Diameter of the duct needed
  • Material used
  • Design of the duct work
  • Space where the duct work will be installed

Number of vents & returns

These are the outlets for your duct where it either releases air into the house (vents) or pulls air into the duct (returns). You need vents in all the rooms and different areas where you need to feel comfortable. With each additional area/room to heat/cool, your installation cost goes up.

Zones and controls

Different areas in your home may need different types of heating/cooling. For eg., an upstairs room will be noticeably warmer than the room below because warm air rises. These 2 areas are considered to be in 2 different zones. So you will need separate temperature control upstairs and downstairs.

The more such localized controls you need, the higher your installation cost will be.


You will have to get a permit to install a whole HVAC system. In such a case, your contractor should be able to get a permit. Remember that the cost of the permit will be added to the cost of the installation. Once you get a permit, all these tests, including HERS, air leakage, static pressure, will be done.

Remember to compare apples to apples. Read your contract to find out what you are getting. Ask questions about how they came up with the design of the system.


Call Sal at (650) 575-3915 to give you an estimate on your AC and other HVAC projects.

The following 2 articles may be helpful for you in picking the right contractor for your job:

How to choose an HVAC contractor

Questions to ask your HVAC contractor