Converting a gas furnace and central AC to one ducted heat pump usually costs about $15,000 to $24,000 in the Sacramento area before any rebate, and the median job sits around $18,000 to $19,000. If the ducts are replaced as well, plan on roughly $20,000 to $31,000. SMUD customers can get $2,000 or $3,000 back on a qualifying system.
Tule Sacramento Heat Pump plans and manages furnace-to-heat-pump conversions in Sacramento County, south Placer County, east Yolo County and El Dorado Hills; licensed and insured contractors do the installation. Below, the conversion price is taken apart line by line. Every figure is a budgeting range for a single-family house. None is a quote.
Conversion price ranges by scope
The two boxes are only part of it. The total depends mostly on how much of the house the project reaches past the equipment.
| What the project includes | Budget before rebates | What moves it |
|---|---|---|
| Split system on the existing ducts, sealed to pass, no electrical upgrade | The lower half of the main range | In local program data, jobs without panel or duct work came in under the overall median |
| Split system with a normal amount of extra work | $15,000 to $24,000, centered around $18,000 to $19,000 | SMUD’s $18,951 median falls in this band |
| Rooftop or pad package unit swapped for a package heat pump | $15,500 to $24,000, centered around $18,000 to $19,500 | Crane time, a curb adapter and wiring |
| Conversion that also replaces the ducts | $20,000 to $31,000 | How many runs, how easy the attic is, whether returns get bigger |
| Panel upgrade added to any of the above | Another $1,500 to $4,500 | Moving the panel or underground service can take it over $5,000 |
Package heat pump replacement covers rooftop and pad units in detail, and the Sacramento heat pump cost guide compares every job type side by side.
What’s inside a Sacramento conversion price
A conversion pulls in more trades than a straight swap: refrigeration, electrical, sheet metal and the gas side. Each line below is a cost the quote should account for, with a public number where one exists.
| Cost line | What decides it | Public number |
|---|---|---|
| HVAC labor | Taking two systems out, putting one in, reaching the attic or closet | Sacramento-Roseville-Folsom HVAC mechanics earn a mean $34.46 an hour; the US mean is $31.14 (BLS) |
| Electrical labor | Outdoor circuit, disconnect, strip-heat circuit, panel | Local electricians average $38.40 an hour against $34.37 nationwide (BLS) |
| Heat pump and air handler | Capacity, compressor type, SEER2 and HSPF2 | Nobody publishes a local equipment price; SMUD’s rebate needs a two-stage or variable-stage unit at 15.2 SEER2 or higher |
| Gas line and flue | Capping the furnace branch, sealing the vent opening | No published figure; scope item |
| Removal | Recovering the old refrigerant, hauling off the furnace and condenser | No published figure |
| Permit | Which city or county the parcel is in | City of Sacramento: $175 flat for an HVAC change-out, plus valuation-based add-ons (City fee schedule); reinspections from $216 |
| Title 24 testing | The ECC-Rater’s leakage, charge and airflow checks, and any retest | Required by state energy code; no published fee |
| Duct work | What the leakage and airflow tests show | Any new run beyond 25 feet: R-8 insulation and its own leakage test |
| Panel | Existing service, free breaker spaces, strip heat size | $1,500 to $4,500 when an upgrade is needed |
| Thermostat | Connected or communicating control, new wire | A Wi-Fi, seven-day programmable connected model is a SMUD rebate condition |
| SMUD rebate | Compressor tier and the gas heat replaced | $3,000 variable-stage, $2,000 two-stage |
Why the labor rows matter
Bureau of Labor Statistics figures from its May 2025 wage survey put the Sacramento metro’s HVAC installers about 11% above the national mean wage, and its electricians about 12% above. Labor is one documented reason the same conversion costs more here than in a national average.
Wages and billed rates are different things. A contractor’s hourly charge also pays for insurance, licensing, trucks and overhead, and no public data says how many hours a conversion takes, so the wage figure explains some of the price but cannot produce it.
The gas-side work a conversion adds
Because the furnace leaves the house, a conversion has steps that a heat-pump-for-heat-pump swap never does.
- The gas branch. The pipe that fed the furnace is turned off and capped. If a water heater, range or dryer still burns gas, the meter and the PG&E gas service stay as they are.
- The flue. The vent pipe is pulled and its hole through the roof or wall is closed, so rain and attic air stay out. A roof penetration adds a small roofing step.
- The cabinet. A heat pump air handler goes where the furnace stood. In a dual fuel setup the furnace stays instead, with a matched heat pump coil on top. Attic, garage and closet locations each change the labor.
- Backup heat. If the design includes electric strips in the air handler, their size is what decides whether the panel needs work. On the valley floor they mostly cover defrost cycles and the occasional cold snap.
Ducts: the swing item
Most projects keep the ducts. City of Sacramento permit records for October 26, 2025 to October 25, 2026 show 1,950 heat pump permits, of which 1,167 said “No Duct Work Permitted” and 176 included new ducts. Keeping ducts is not free, though: state rules require the installer to seal them and an ECC-Rater to test them whenever the system is changed out.
When sealing is enough
Passing means no more than 10% total leakage, or no more than 7% leaking outside the house. If the ducts can’t get there, sealing every leak that can be reached, checked visually and with smoke, also passes. The cost of that sealing rises with the leakage and with how cramped and hot the attic is.
When the ducts get replaced
The refrigerant charge check assumes at least 300 cfm of airflow for each ton. Small returns and kinked flex runs that a furnace’s hot air disguised can fail it, and then sealing becomes duct work. That step is what separates the main range from the $20,000 to $31,000 one. Heat pump ductwork explains the test numbers and the repairs.
Panel and electrical costs
The outdoor unit often needs a 240-volt circuit much like the old AC’s. Strip heat is the wild card: a large set in the air handler can overload an older 100-amp service. When a panel upgrade is needed it typically costs $1,500 to $4,500 and needs its own electrical permit.
For SMUD customers switching from gas, the Go Electric program adds rebates for panel, subpanel and circuit work, set per project with SMUD. The panel upgrade guide explains how a load calculation decides whether the upgrade is needed at all.
Permit fees across the area
A building permit is required for every conversion, issued by whoever governs the parcel. Inside the City of Sacramento the change-out fee is $175 flat, with a technology surcharge and a few small charges based on project valuation added. The City’s standard online change-out assumes the new unit sits where the old one did and is no more than 25% bigger.
Other cities and the county
Elsewhere, Sacramento County (for Carmichael, Fair Oaks, Arden-Arcade and the other unincorporated areas), Elk Grove, Roseville, Citrus Heights and El Dorado County each set their own fee, usually a few hundred dollars, confirmed for the parcel. SB 222 limits a residential heat pump HVAC permit to $200 unless the local agency adopts written findings, so it is worth asking whether that limit covers your permit yet. Office-by-office details are in the permit and Title 24 guide.
Rebates that change the net cost
| Program | Can you use it? | Effect on a conversion |
|---|---|---|
| SMUD heat pump HVAC rebate | Yes, while funded | Variable-stage system replacing gas heat: $3,000; two-stage: $2,000. Qualifying equipment installed by a participating contractor in the SMUD Contractor Network |
| SMUD Go Electric | Yes, while funded | Extra money toward panel, subpanel and circuits when gas equipment is replaced |
| TECH Clean California | No | Stopped reserving on November 14, 2025 |
| HEEHRA | No | California’s allocation is fully reserved |
| Federal 25C credit | No | Covers nothing placed in service after December 31, 2025 |
| Roseville Electric or PG&E electric service | No utility program listed | Plan the budget with no rebate |
SMUD allows the participating contractor to take the rebate off the invoice upfront. Installations set up to qualify are available on request, with eligibility confirmed job by job. Every SMUD requirement is listed in the SMUD rebate guide, and the California rebate guide explains what closed and when.
Three illustrative conversion budgets
Each example is built from the ranges above. They show how the pieces add up and are not quotes.
- A 2000s SMUD-area house with an attic furnace. Sealing gets the ducts to pass and the panel has space. A two-stage system lands around the $18,000 to $19,000 middle, less SMUD’s $2,000 if it qualifies.
- A 1950s Arden-Arcade ranch with tired ducts. The leakage test fails by a wide margin, so new insulated ducts go in, and the 100-amp panel needs an upgrade to carry backup strips. Start from the $20,000 to $31,000 duct range, add $1,500 to $4,500, then subtract the SMUD and Go Electric rebates.
- A Davis home with a rooftop package unit. PG&E is the electric utility, so no utility heat pump rebate applies. The package range of $15,500 to $24,000 is the guide, and crane access is the biggest unknown.
Getting a conversion number for your house
Start with the online cost estimator for a quick range, or the readiness assessment to see whether ducts or the panel are likely extras. Whether the switch pays for itself turns on your electric rate, which the heat pump vs gas furnace guide works through. When you want an itemized figure, call (916) 516-1454 or ask for an estimate, and compare it with other bids using the heat pump quote checklist.
