HVAC replacement cost is one of the first things homeowners want to know when they’re staring at an aging furnace and air conditioner, wondering whether to patch things up again or finally replace the whole system. It’s a tough call, and the price tag doesn’t make it easier.
Here’s the straight answer: most Oakland County homeowners pay between $10,000 and $15,500 for a complete furnace and air conditioner replacement. The average lands somewhere around $12,000 to $13,000.
Replacing both units at the same time saves you $1,000 to $2,000 compared to doing them separately. You also get a matched system that runs more efficiently and lasts longer.
This guide breaks down what you’ll pay in Southeast Michigan, what’s included in that price, and how to make sure you’re getting a fair deal—real numbers from real installations in Oakland County.
Average HVAC Replacement Costs in Southeast Michigan
The cost of your HVAC replacement depends primarily on the efficiency tier you choose and the size of your home. Below is a detailed breakdown of what you can expect, by system type and typical installations in the Oakland County area.
HVAC Replacement Pricing Table
To provide a clearer picture, we have categorized the costs by system efficiency, which is the primary driver of price. These ranges reflect typical installations in the Oakland County area.
| System Tier | Efficiency Ratings | Typical Cost Range (Full Installation) |
|---|---|---|
| Basic System | 80% AFUE Furnace + 14-15 SEER AC | $10,000 – $11,500 |
| High-Efficiency | 96%+ AFUE Furnace + 16-18 SEER AC | $13,000 – $15,500+ |
| Premium System | 98% AFUE Modulating Furnace + 18+ SEER Variable-Speed AC | $16,000 – $22,000+ |
These prices include everything: equipment, labor, permits, and hauling away your old system. No hidden fees, no surprise charges at the end.
The range exists because every home is different. A 1,200 square foot ranch needs a smaller system than a 3,000 square foot colonial. Your ductwork condition matters too. The efficiency level you choose also makes a big difference in the final number.
What's Included in a Full HVAC System Replacement?
When a contractor gives you a quote for a “full system replacement,” you need to know exactly what you’re paying for. A legitimate price from a reputable company should cover everything, with no surprises on installation day.
New Furnace and Evaporator Coil
This is your indoor heating equipment. The furnace heats your home during Michigan winters, and the evaporator coil sits on top of it to work with your air conditioner. These two components need to be properly matched, which is one reason replacing both systems together makes sense.
New Air Conditioner Condenser
That’s the outdoor unit, the big metal box next to your house. It pulls heat out of your home during summer and releases it outside. Modern condensers are quieter and more efficient than units made 10 years ago.
Professional Installation and Labor
This is where much of your cost goes, and for good reason. A quality installation determines whether your system runs efficiently for 15 years or breaks down constantly. Skilled technicians know how to size equipment correctly, seal ductwork connections, and set up your system for optimal performance.
Smart Thermostat
Most quality contractors include a programmable or smart thermostat with new installations. This isn’t just a nice extra. A good thermostat helps your new system run at peak efficiency and can cut your energy bills by 10% or more.
Permits and Inspections
Your contractor should pull all required permits and schedule inspections with your local municipality. This protects you. Permitted work means the installation meets building codes and won’t cause problems if you sell your home later.
Removal and Disposal
Getting rid of your old equipment is included. Your contractor will disconnect everything safely, haul it away, and dispose of it properly. You shouldn’t have an old furnace sitting in your driveway when the job is done.
Standard vs. High-Efficiency Systems: Which One Makes Sense?
This is where you need to make a choice. Do you pay less now with a standard system, or invest more upfront in high-efficiency equipment that saves money each month?
Standard-Efficiency Systems (80% AFUE Furnace + 14-15 SEER AC)
Typical Cost: $10,000 – $11,500
An 80% AFUE furnace means 20 cents of every dollar you spend on heating goes up the exhaust pipe. It’s not terrible, but it’s not great either. These systems make sense if you’re on a tight budget, planning to move in a few years, or installing in a rental property.
The AC side runs at 14-15 SEER, which meets current minimum efficiency standards. It’ll cool your house, but your summer electric bills will be higher than with a more efficient unit.
High-Efficiency Systems (96%+ AFUE Furnace + 16-18 SEER AC)
Typical Cost: $13,000 – $15,500+
A 96% AFUE furnace loses only 4 cents per heating dollar. That’s a big difference when your furnace runs for five or six months straight.
The high-efficiency condensing furnaces in this category extract so much heat from the combustion process that they produce condensation, which is why they need a drain line. That extra heat extraction is why they cost less to operate.
Is High-Efficiency Worth It in Michigan?
For most Southeast Michigan homeowners who plan to stay in their home, absolutely yes.
Here’s the math. A high-efficiency system costs about $2,500 to $3,500 more than a basic setup. But it can reduce your winter heating bills by 25-35% compared to an older 80% AFUE model. Combined with DTE or Consumers Energy rebates, you break even in about 4 to 6 years.
After that, it’s pure savings for the remaining 10 to 15 years of the system’s life. Plus, you’ll be more comfortable. High-efficiency systems run longer at lower speeds, which means more even temperatures throughout your house and better humidity control.
5 Factors That Determine Your Base Price
That price range of $10,000 to $15,500 is wide. Here’s what pushes you toward one end or the other.
1. Your Home’s Size and Layout
Bigger homes need bigger systems. A proper contractor will do a load calculation to determine exactly what size equipment your home needs. This involves more than just square footage. They’ll look at your insulation, window sizes, ceiling heights, and how your home is oriented to the sun.
An undersized system will run constantly and never keep up. An oversized system will short-cycle, turning on and off too often, which wastes energy and wears out components faster. Getting this right matters more than most people realize.
2. Efficiency Ratings (AFUE and SEER Explained)
AFUE stands for Annual Fuel Utilization Efficiency. It measures how much of the fuel your furnace actually converts to heat. An 80% AFUE furnace turns 80% of the gas into heat. A 96% AFUE furnace turns 96% into heat.
SEER stands for Seasonal Energy Efficiency Ratio. It measures air conditioner efficiency. Higher numbers mean lower operating costs. Michigan requires at least 14 SEER for new installations, but ENERGY STAR certified equipment typically runs 16 SEER or higher.
3. Equipment Brand and Quality
Not all furnaces and air conditioners are created equal. Premium brands like Carrier and Trane cost more. Mid-tier manufacturers like Rheem offer reliability and performance at more accessible prices. Budget brands cost less upfront but may not last as long or perform as efficiently.
We install Rheem equipment because it hits the sweet spot of quality, reliability, and value. Their systems are built to handle Michigan’s demanding climate, and the warranty support is solid.
4. Your Current Contractor
This matters more than most people think. The cheapest bid isn’t always the best deal. A contractor who cuts corners on installation will cost you more in repairs, higher energy bills, and a shorter system lifespan.
Look for established local companies with real addresses and longstanding reputations in your community. Check that they’re licensed, insured, and pull proper permits. A quality installation is the single most important factor in how well your new system performs.
5. Time of Year
HVAC companies get slammed during heat waves and cold snaps. Everyone wants their system fixed or replaced right away. If you can plan ahead and schedule your replacement during spring or fall, you might find better availability and sometimes better pricing.
Don’t wait until your system fails in January just to save a few hundred dollars. Emergency replacements during a cold snap are stressful and limit your options.
Add-Ons That Can Increase Your Quote
Sometimes a straight swap isn’t possible. Your contractor should inspect your system and tell you upfront if additional work is needed. Be suspicious of any quote that doesn’t account for these potential issues.
Ductwork Repairs or Replacement
Old, leaky ductwork can waste 20-30% of your heating and cooling before it reaches your rooms. If your ducts are falling apart, poorly insulated, or the wrong size for your new equipment, fixing them is worth every penny. There’s no point in buying a high-efficiency system if a third of that efficiency leaks into your attic.
Electrical Upgrades
Newer high-efficiency air conditioners sometimes have different electrical requirements than older models. Your contractor might need to run a new circuit or upgrade a breaker. This is common in older Oakland County homes with original electrical panels.
Asbestos or Mold Remediation
Older homes sometimes have asbestos in duct insulation or around old furnaces. If mold is found in your ductwork, it needs to be addressed before new equipment goes in. These discoveries add cost, but ignoring them creates health hazards.
Insulation and Air Sealing
Your contractor might recommend adding attic insulation or sealing air leaks around windows and doors. This isn’t upselling. A well-insulated home lets your new system work less to maintain comfortable temperatures, which means lower bills and longer equipment life.
Zoning Systems
Want different temperatures in different parts of your house? A zoning system uses electronic dampers in your ductwork to direct airflow where you need it. It’s an add-on that increases comfort and cost.
Should You Replace Your Furnace and AC Together?
If your furnace dies and your AC is the same age, around 12 years or older, replacing both at once is usually the smarter move. Here’s why.
You Save on Labor Costs
One crew, one project, one installation. Paying for two separate installations years apart means paying for labor twice. Bundling saves you $1,000 to $2,000 in labor costs.
Your Systems Work Better Together
Modern furnaces and air conditioners are designed as matched pairs. The indoor coil that sits on your furnace is engineered to work with your outdoor AC unit. Mixing an old furnace with a new AC, or vice versa, means neither piece performs as well as it should.
You Actually Get the Efficiency You Pay For
Those SEER and AFUE ratings you’re paying for? They’re tested on matched systems. Pair a new high-efficiency AC with an old furnace and you won’t hit those numbers. Your energy bills will be higher than they should.
You Avoid a Second Emergency
If your furnace and AC are the same age, they’ve lived the same life. Same number of cycles, same wear and tear. When one fails, the other is usually not far behind. Replacing both now means you won’t be scrambling for an emergency AC replacement during a July heat wave.
Financing and Rebates Are Easier
It’s simpler to apply for one financing package and one set of utility rebates for a complete system than to piece together separate deals years apart.
When Does Replacing Just One Make Sense?
The main exception is if one unit is significantly newer than the other. If your AC is only 5 or 6 years old and running fine, it doesn’t make sense to replace it because your furnace died.
If you’re only replacing your furnace, check out our detailed guide to furnace replacement costs in Southeast Michigan for specific pricing on furnace-only installations.
Michigan Rebates That Can Lower Your Cost in 2026
There are still ways to reduce the cost of a new HVAC system. Here’s what’s available for Oakland County homeowners.
DTE Energy Rebates
DTE offers rebates for high-efficiency furnaces and air conditioners.
| Equipment Type | Efficiency Rating | Rebate Amount |
|---|---|---|
| Furnace | 98% AFUE or higher | $400 |
| Furnace | 96-97% AFUE | $200 |
| Furnace | 95% AFUE | $100 |
| Air Conditioner | 18+ SEER2 | $300 |
| Air Conditioner | 16-17.99 SEER2 | $200 |
| Air Conditioner | 15.2-15.99 SEER2 | $100 |
For a high-efficiency system, DTE customers can receive up to $700 in combined rebates. Your contractor handles the paperwork, and your rebate check arrives in about 6 to 8 weeks.
Consumers Energy Rebates
Consumers Energy customer rebates have similar options:
| Equipment Type | Efficiency Rating | Rebate Amount |
|---|---|---|
| Furnace | 97% AFUE or higher | $300 |
| Furnace | 95-96.99% AFUE | $100 |
| Air Conditioner | SEER2 16 and higher | $300 |
| Air Conditioner | SEER2 15.2 to 15.99 | $150 |
Consumers Energy customers can receive up to $600 in combined rebates for a high-efficiency HVAC system.
What Happened to the Federal Tax Credits?
The Federal Energy Efficient Home Improvement Credit, which offered up to $600 for furnaces and $600 for air conditioners, expired on December 31, 2025.
If you had equipment installed before that deadline, you can still claim the credit when you file your 2025 taxes. But for new installations in 2026, those federal tax credits for standard furnaces and air conditioners are no longer available.
That makes the utility rebates from DTE and Consumers Energy even more valuable. Make sure your contractor helps you take advantage of every rebate you qualify for.
Financing Options
Most reputable HVAC contractors in Oakland County offer financing to help spread the cost over time. This lets you get the high-efficiency system you want without straining your budget. Many homeowners find that their monthly payment is partially or fully offset by the energy savings from their new, more efficient system. Ask your contractor about available financing terms and options.
Why Gas Furnaces Still Make Sense for Michigan
You might have heard about heat pumps and wondered if they’re a better option. For most Southeast Michigan homes, a high-efficiency natural gas furnace is still the best choice for heating.
Here’s why: Michigan winters are brutal. We regularly see temperatures below zero, and cold snaps can keep us below freezing for weeks. Heat pumps work well in moderate climates, but they struggle to keep up when temperatures drop into the single digits or below.
Gas furnaces deliver consistent, powerful heat regardless of how cold it gets outside. Natural gas infrastructure is well-established in Oakland County, and gas prices remain reasonable compared to electricity rates. For reliable heating during our harsh winters, gas furnaces are the most practical option for most local homeowners.
Sizing Your AC for Michigan’s Humid Summers
Our summers aren’t just hot, they’re humid. That sticky, uncomfortable feeling isn’t just about temperature, it’s the moisture in the air.
An air conditioner does two jobs: it cools your home and removes humidity. The problem is, an oversized AC cools so fast that it shuts off before it can pull moisture out of the air. You end up cool but clammy.
A properly sized air conditioner runs longer cycles, pulling out more humidity and leaving you comfortable. This is why a proper load calculation matters. Bigger isn’t better when it comes to air conditioning.
Conclusion
Replacing your furnace and air conditioner together represents a significant investment for homeowners in Southeast Michigan, with 2026 costs ranging from $10,000 to $15,500, depending on numerous factors.
Oakland County homeowners can make more informed decisions about this essential home improvement project by understanding the variables that influence pricing—from system efficiency and home size to ductwork condition and contractor selection.
Oakland Heating & Cooling is committed to helping homeowners navigate these decisions with transparent information and expert guidance tailored to the unique needs of each home.
Common Questions About HVAC Replacement
How long does a full HVAC installation take?
Most complete system replacements take one full day, typically 8 to 12 hours. A professional crew will show up in the morning, remove your old equipment, install the new furnace and AC, connect everything, test the system, and clean up before they leave.
If your installation involves ductwork modifications or electrical upgrades, it might extend into a second day. Your contractor should give you a clear timeline before work begins.
How long will my new HVAC system last?
With proper maintenance, you can expect 15 to 20 years from a quality furnace and air conditioner. The key phrase there is “with proper maintenance.” Annual tune-ups, regular filter changes, and addressing small problems before they become big ones will help your system reach that upper end.
Skipping maintenance? You might get 10 to 12 years before efficiency drops and repairs start piling up.
Will I need to upgrade my electrical panel?
It depends on your home and your new equipment. Older homes with original electrical panels sometimes need upgrades to handle modern high-efficiency air conditioners.
Your contractor will inspect your electrical system during the estimate process and let you know if any upgrades are needed. This is especially common in homes built before the 1980s.
What brands do you recommend?
We’re an authorized Rheem dealer, and we install their equipment because it offers excellent reliability and efficiency at a fair price. Rheem builds systems specifically designed to handle demanding climates like Michigan’s.
That said, brands like Carrier and Trane also make excellent equipment. The most important factor isn’t the brand name on the box. It’s the quality of the installation.
