Heating and cooling installation cost in Australia: split, ducted and heat pump hot water in 2026

A heating and cooling installation in Australia is priced mainly by capacity (kW), system type and installation complexity. On this site's illustrative ranges, a back-to-back wall split system costs roughly $350–$600 per kW of rated capacity plus fixed job costs, a ducted reverse cycle system with new ductwork roughly $750–$1,250 per kW, and a heat pump water heater a few thousand dollars before incentives. Incentives then change the picture: small-scale technology certificates (STCs) reduce almost every heat pump water heater quote, and depending on your state, the Victorian Energy Upgrades program, Solar Victoria's hot water rebate or the NSW Energy Savings Scheme can take more off. This overview explains each price factor and links to the detailed guides.

All prices on this page are illustrative examples to show the method, not market rates or quotes.

The three things every quote is really pricing

Whatever the brand, an installer's price breaks down into three parts:

Equipment. The indoor and outdoor units (or the heat pump tank), priced by capacity and by efficiency tier. Higher-efficiency and premium-brand models cost more for the same kW.
Installation labour and materials. Brackets, refrigerant pipe, insulation, cable, condensate drains, wall penetrations, roof access, duct runs, vents, controllers and zoning motors. This is where quotes differ most.
Extras and compliance. A dedicated electrical circuit, a switchboard upgrade, removal and disposal of the old unit (including refrigerant recovery), plumbing compliance for hot water, and any making good of walls or ceilings.

If one quote is much cheaper than the others, it is usually because part 2 or part 3 is thinner or missing, not because the equipment is cheaper.

Illustrative installed price ranges by system type

System type	Illustrative rate per kW (installed, incl. GST)	Example size	Illustrative total (fixed costs $700 for splits, $1,500 for ducted)
Wall split, back-to-back	$350–$600	7.1 kW	about $3,200–$5,000
Wall split, long run or two-storey	$450–$750	5.0 kW	about $3,000–$4,500
Floor console split	$450–$700	3.5 kW	about $2,300–$3,200
Multi-head split (outdoor unit size)	$450–$750	8.0 kW	about $4,300–$6,700
Ducted, new ductwork, single storey	$750–$1,250	14 kW	about $12,000–$19,000
Ducted, re-using sound ductwork	$500–$850	14 kW	about $8,500–$13,400

The rates are assumptions chosen for this site to show the arithmetic. For example, 14 kW ducted with new ductwork: low = 14 × 750 + 1,500 = $12,000; high = 14 × 1,250 + 1,500 = $19,000. You can rerun these with the installation cost estimator.

Heat pump water heaters are priced per system rather than per kW. Integrated units (compressor on top of the tank) and split units (compressor separate) in the 200–315 litre range are common for households. The heat pump hot water cost guide covers the factors in detail.

Price factors that move a quote up or down

Capacity. More kW means a bigger compressor and more refrigerant. Oversizing wastes money upfront and can cause short cycling; undersizing leaves rooms cold in winter. See sizing a system in kW.
Pipe run and access. A back-to-back install, where the outdoor unit sits directly behind the indoor head on the other side of the wall, is the cheapest. Every extra metre of pipe, every storey and every roof cavity adds labour.
Electrical work. Larger units often need a dedicated circuit. Older switchboards with ceramic fuses or no spare capacity may need upgrading. See switchboard and circuit costs.
Ducted design. Number of outlets, zones, return air grilles, duct insulation rating and roof space height all affect labour.
Removal. Taking out an old ducted gas heater, a wall furnace or an old electric storage tank costs money and, for gas appliances, needs a licensed gasfitter to cap the gas line.
Location and timing. Regional travel and peak-season demand (the first hot week of summer, the first cold week of winter) can affect both price and wait times.

Incentives that may apply in 2026

Incentive	Who runs it	Applies to	How you usually receive it
Small-scale technology certificates (STCs)	Clean Energy Regulator, under the Small-scale Renewable Energy Scheme	Eligible heat pump and solar water heaters on the register	Discount on the quote after you assign the STCs to an agent
Victorian Energy Upgrades (VEU)	Essential Services Commission, Victoria	Eligible efficient products installed by accredited providers	Discount on the quote
Solar Victoria hot water rebate	Solar Victoria	Eligible heat pump and solar hot water for eligible owner-occupiers	Rebate applied through an authorised retailer
NSW Energy Savings Scheme	IPART administers; NSW Government scheme	Eligible heat pump water heaters and air conditioners	Discount on the quote via an Accredited Certificate Provider
Home Energy Upgrades Fund	Clean Energy Finance Corporation, via lenders	Finance for eligible upgrades	Discounted loan or plan from a participating lender

Details and stacking rules are in the guides on STCs, Victorian rebates, the NSW Energy Savings Scheme and Home Energy Upgrades Fund loans. Other states and territories run their own programs from time to time; check your state energy department.

Ducted or split, gas or electric: the bigger decisions

Two decisions shape the budget more than any single price factor:

Ducted or split. Ducted systems hide the equipment and condition the whole house, but cost more upfront and lose some energy through ducts. Split systems are cheaper per room. Read ducted versus split system cost.
Staying on gas or going all-electric. If you remove every gas appliance you can stop paying the daily gas supply charge, which often matters more than the per-MJ rate. In Victoria, policy is moving homes away from gas, including a rule that from 1 March 2027 existing homes replace gas hot water with an efficient electric system at end of life. Read the Victorian gas rules and the gas-to-electric worked example.

Running costs belong in the comparison too. A cheaper unit with lower efficiency can cost more over ten years. The running-cost guide shows the arithmetic.

How to get a quote you can compare

Decide which rooms you want heated and cooled and roughly how you use them.
Ask at least three licensed installers to inspect the home, not quote over the phone.
Ask each to state model numbers, capacity, pipe run, electrical work, removal and incentive amounts separately.
Check licences: refrigerant (ARCtick), electrical and, for hot water, plumbing. See the licence guide.
Work through the quote checklist before you sign.

Frequently asked questions

Why do quotes for the same split system differ by more than $1,000?

Usually because of the pipe run, electrical work, the old unit's removal or a different model with the same kW. Ask each installer to break the price into equipment, installation and extras, then compare line by line.

Is it cheaper to install in winter or summer?

There is no fixed rule. Demand tends to spike at the start of hot and cold seasons, which can lengthen wait times. Booking an inspection before the season starts gives you time to compare quotes.

Do incentives apply to every system?

No. STCs apply to eligible water heaters, not to split or ducted air conditioners. State discounts apply only to listed products, eligible properties and accredited or partnered installers. Confirm eligibility in writing.

Are the prices on this site real quotes?

No. They are illustrative ranges chosen to show the method. Your quotes will depend on your home, location and installer.

Official sources

Clean Energy Regulator — Small-scale Renewable Energy Scheme and STCs
energy.gov.au — national household energy information and rebate listings
Solar Victoria — Victorian hot water rebate
Essential Services Commission — Victorian Energy Upgrades program
NSW Climate and Energy Action — NSW household energy saving upgrades
Australian Refrigeration Council (ARCtick) — refrigerant licence checks