If you’ve started calling around for HVAC estimates, you’ve probably noticed something confusing:
• One company says “around low five figures”
• Another is closer to “upper five figures”
• Everyone says they’re giving you “a good deal”

So what should a new HVAC system cost in the San Francisco Bay Area in 2025?

The honest answer: it depends a lot on your home and what you’re installing—but there are realistic ranges and patterns you can use to budget and compare quotes.

In this guide, Galaxy Heating & Air Conditioning breaks down what really drives HVAC costs in the Bay Area, typical price ranges for different system types, and how to avoid surprises.

📍 Serving Contra Costa, Alameda & San Francisco counties
📞 Have a quote you want help decoding? Call or text (925) 578-3293.

Quick Answer: What Does a New HVAC System Cost in the Bay Area?

For a typical Bay Area home, here’s the big-picture view (equipment + standard installation, not including extreme electrical/structural surprises):

• Furnace only replacement: from the high four figures and up
• AC or heat pump only (add-on or swap): from the low five figures and up
• Full system (furnace + AC or heat pump + air handler): from the low to mid five figures
• Ductless mini split systems (1–4 zones): from the mid to higher five figures, depending on zones and layout
• Projects with new ductwork, panel upgrades, or major zoning: expect higher five figures in many cases

Those ranges are wide because no two homes are identical. The rest of this guide explains exactly why.

1. The 6 Main Things That Drive HVAC Cost in the Bay Area

When we build a proposal, we’re basically adding up six big buckets:

1. Type of system (gas furnace, heat pump, dual fuel, ductless)
2. Equipment tier (basic vs high-efficiency, single-stage vs variable-speed)
3. Ductwork scope (reuse, repair, redesign, or full replace)
4. Electrical work (new circuits, panel upgrades, code corrections)
5. Permits, Title 24 & HERS testing
6. Labor quality & warranty coverage

Let’s walk through each one.

1.1 System Type: Gas, Heat Pump, Dual Fuel, or Ductless

A. Gas furnace + AC (traditional split system)

• Common in existing Bay Area homes with natural gas
• Cost depends on furnace efficiency, AC efficiency, and whether ducts are adequate
• Lower upfront than some all-electric options, but you’ll still pay PG&E for gas

B. All-electric heat pump system

• One unit provides both heating and cooling
• In our mild climate, heat pumps can be incredibly efficient and often lower overall energy usage
• May require more electrical work (especially older panels), but can reduce gas use or eliminate gas heat entirely

C. Dual fuel (heat pump + gas furnace)

• Heat pump handles most of the year
• Gas furnace kicks in when it’s colder or when you want that gas-heat feel
• Great option if you want to reduce gas use but still keep gas as a backup

D. Ductless mini split systems

• Fantastic for additions, ADUs, upstairs comfort, and homes without ducts
• You pay per outdoor unit and per indoor head/zone, so layout matters a lot
• Can be incredibly efficient and quiet, especially with premium brands like Mitsubishi (Galaxy’s specialty)

Each step up—from basic furnace/AC to high-efficiency heat pump, dual fuel, or multi-zone ductless—adds complexity and cost but usually also adds comfort, flexibility, and efficiency.

1.2 Equipment Tier: Good, Better, Best

Even within the same brand, cost varies based on:

• Single-stage vs two-stage vs variable-speed
• Standard vs high-efficiency (SEER2 / HSPF2 / AFUE)
• Noise level and comfort features
• Warranty length and terms

In simple terms:

• Good: Meets code. Single-stage, basic controls, louder, more temp swings.
• Better: Two-stage or high-efficiency, quieter, more even temperatures.
• Best: Variable-speed / inverter systems, top efficiency, ultra-quiet, maximum comfort and humidity control.

Galaxy generally steers Bay Area homeowners toward the “better” and “best” tiers, especially for long-term homes. The upfront cost is higher, but:

• You get better comfort and quieter operation
• You may qualify for larger rebates and tax credits
• You usually see lower monthly bills

1.3 Ductwork: The Hidden Cost That Changes Everything

Most quotes people compare are actually equipment + duct strategy wrapped together.

Your duct situation might be:

• Use existing ducts “as-is”
• Seal and adjust existing ducts (for airflow and leakage)
• Modify or add returns/registers
• Full duct replacement with new layout, sizes, and materials

In the Bay Area, a ton of older homes have:

• Undersized or badly designed ducts
• Leaky, uninsulated runs in the attic
• Not enough return air (very common)

If your ducts are in rough shape and you want even temperatures and a quiet system, you’ll pay more for a quote that fixes them—but you’ll also actually get the comfort you’re hoping for.

A “cheap” quote often just swaps equipment and leaves problematic ductwork in place. A proper solution invests more in ducts and airflow.

1.4 Electrical Work & Panel Upgrades

This is becoming a bigger factor with heat pumps, EV chargers, and induction ranges all going into the same homes.

Potential electrical costs depend on:

• Age and capacity of your main panel
• Whether you already have open spaces and adequate amperage
• Distance from panel to the new equipment
• Need for sub-panels, new circuits, or load management

Some projects only need a simple new circuit and a properly sized breaker. Others need a panel upgrade or significant reworking to be safe and code-compliant.

Galaxy handles HVAC + electrical in-house so you’re not stuck coordinating multiple contractors.

1.5 Permits, Title 24 & HERS Testing

In California, a legit HVAC install usually involves:

• Local building permit
• Compliance with Title 24 energy code
• HERS testing (duct testing, airflow, refrigerant charge, etc., depending on scope)

All of that takes time, coordination, and some hard costs (city fees, testing, etc.).

Some contractors skip permits and testing to keep prices low. We don’t.

Yes, including these steps increases the quote—but it also means:

• Your system is documented and legal
• You’re far less likely to have issues when you sell your home
• You know your system meets minimum performance and safety standards

1.6 Labor Quality, Warranty & Company Stability

The last major cost factor isn’t a part you can touch—it’s the people and the company behind the install:

• How many hours are they budgeting for the job?
• Are they sending experienced installers or a lowest-bid subcontractor?
• Do they have NATE-certified techs and ongoing training?
• Are they licensed, insured, and A+ rated with strong real reviews?
• How long is their labor warranty, and how do they handle callbacks?

Galaxy invests heavily in training, certifications, and quality control. That costs more than “slap it in and hope for the best,” but it directly shows up in:

• Fewer problems
• Better comfort
• Longer system life

2. Typical Cost Ranges by Scenario (Bay Area)

Every home is unique, but here’s how we think about ballpark ranges for typical situations.

⚠️ These are generalized ranges, not a quote. Complex homes, major duct/electrical issues, structural work, or extensive zoning can push projects higher.

2.1 Furnace-Only Replacement

When this applies:

• You already have working AC or don’t use AC
• Your furnace is old, unsafe, or unreliable

What affects cost:

• Efficiency (basic vs high-efficiency)
• Single-stage vs two-stage/variable
• Flue/venting changes
• Gas line updates
• Code corrections and permits

Homeowners often choose this when the AC is still okay, but the furnace is near the end of its life or has a cracked heat exchanger.

2.2 AC or Heat Pump Add-On / Replacement

When this applies:

• You have a gas furnace and want to add or replace AC
• You’re replacing traditional AC with a heat pump while keeping the furnace (hybrid now or later)

What affects cost:

• SEER2 / HSPF2 efficiency
• Single-stage vs variable-speed
• Refrigerant line set condition or replacement
• Condensate management
• Electrical work for the outdoor unit

Heat pumps typically cost more upfront than basic AC, but in the Bay Area, they can significantly reduce gas usage and provide very efficient heating.

2.3 Full System: Furnace + AC or Heat Pump + Air Handler

This is what most people think of as “a complete system replacement”.

When this applies:

• Your entire system is 15–20+ years old
• You’re ready to update both heating and cooling together
• You want maximum comfort, efficiency, and warranty alignment

What affects cost:

• System type (furnace+AC, all-electric heat pump, dual fuel)
• Equipment tier (good/better/best)
• Ductwork scope and condition
• Electrical upgrades
• Permits, Title 24, HERS testing

This is where projects most commonly land in the low to mid five-figure range for standard homes, with higher-complexity projects going above that.

2.4 Ductless Mini Split Systems (Mitsubishi, etc.)

When this applies:

• No existing ducts (older homes, ADUs, additions, small apartments)
• You want zoned comfort (upstairs hot, downstairs cold)
• You’re done fighting with one thermostat for the whole house

What affects cost:

• Number of zones/indoor units
• Size/layout of home
• Line set lengths and concealment (soffits, covers, etc.)
• Electrical work (dedicated circuits, panel capacity)
• Brand and efficiency level

A simple single-zone ductless project can be much less than a multi-zone whole-home design. But a full-home Mitsubishi ductless system with multiple heads can move into the higher five-figure range because you’re essentially installing several systems in one.

Galaxy is a Mitsubishi Diamond Elite contractor, which allows us to offer enhanced warranties and finely tuned designs for ductless projects.

3. How Rebates & Tax Credits Change the Math

The sticker price is only part of the picture. In 2025, Bay Area homeowners may be able to reduce their net cost with:

• Federal tax credits for qualifying high-efficiency equipment
• Local and utility rebates for heat pumps, heat pump water heaters, and panel upgrades
• Occasional manufacturer promotions

These programs change frequently and often have:

• Income limits or tiers
• Specific equipment efficiency requirements
• Deadlines and funding caps

Galaxy keeps current on active programs and can:

• Help you choose equipment that may qualify
• Provide documentation for your tax professional
• Point you to up-to-date rebate resources and portals

The key idea: a slightly more expensive, higher-efficiency system can end up costing similar or even less net once incentives and lower monthly bills are factored in.

4. Operating Costs: The Part Most Quotes Ignore

Two quotes might be only a few thousand dollars apart, but the long-term energy usage can be very different.

What affects operating cost?

• Efficiency ratings (SEER2, HSPF2, AFUE)
• How well the system is sized and installed (very important)
• Duct leakage and insulation
• Thermostat settings and usage patterns

In the Bay Area’s climate, high-efficiency heat pumps and variable-speed systems often:

• Run longer on low power rather than short, hard bursts
• Maintain steadier temperatures
• Use less total energy and put less strain on the equipment

Over 10–15 years, those lower monthly bills can easily offset the initial price difference between a basic and a higher-end system.

5. How to Budget for an HVAC Project in the Bay Area

Here’s a practical way to think about budgeting:

1. Decide your goals first, not the price:
   • All-electric vs mixed fuel?
   • Maximum comfort and quiet?
   • Solving hot/cold rooms?
   • Preparing for future EVs / electrification?
2. Get a real evaluation, not a phone quote:
   • A good contractor will look at ducts, electrical, windows, insulation, and layout
   • They’ll talk through options and tradeoffs, not just push one “special”
3. Expect a realistic range, not a single magic number:
   • Ask for a “good, better, best” set of options
   • Compare equipment type, scope, and warranties, not just totals
4. Plan for some contingencies:
   • Undiscovered duct issues, hidden electrical quirks, or code changes can add some cost
   • Working with a contractor who is transparent about this up front is a good sign

6. FAQ: HVAC Costs for Bay Area Homeowners

Q: Why is my neighbor’s HVAC quote so much lower than mine?

A: Your home may have more complex ductwork, electrical needs, or comfort goals. They might be installing basic single-stage equipment while you’re looking at variable-speed, higher-efficiency systems. Or their contractor may be skipping permits or duct fixes. The details matter.

Q: Is it cheaper to replace the furnace now and the AC later?

A: Sometimes, but not always. There are labor efficiencies in replacing everything at once, and you get matched equipment and warranties. If both units are older and you plan to stay in the home, a full system replacement often makes more sense long-term.

Q: Are heat pumps really more expensive than gas furnaces?

A: Upfront, a high-quality heat pump system can cost more than a simple furnace swap. But it replaces both your furnace and AC, often qualifies for more rebates, and can lower your gas usage and overall energy bills in our mild climate.

Q: Can you give exact pricing over the phone?

A: We can give rough ballparks, but to give you a fair, accurate price, we need to see your home, ducts, and electrical. That way you’re not hit with change orders later for things that should have been found up front.

7. Want a Clear, No-Pressure HVAC Quote?

If you’re in Contra Costa, Alameda, or San Francisco counties and you’re trying to budget for a new system, we’re happy to help.

When you schedule a visit with Galaxy Heating & Air Conditioning, we:

• Look at your existing system, ducts, and electrical
• Ask about your comfort issues, energy goals, and future plans
• Design real options—not just one number—so you can choose what fits your home and budget
• Explain current rebates and tax credits you may qualify for

📞 Call or text (925) 578-3293
💬 Or reach out through our website to request an estimate

We’ll help you understand not just what it costs today, but what makes the most sense for your home over the next 10–20 years.