$6,300 installed is the lowest we saw an installed air conditioner sell for in Arizona in 2024.
On the other end of the spectrum, we saw a single system installation go in for $39,000 in 2024, too.
But I’ll be honest; most folks neither need nor want either of these extremes.
The average price of an installed air conditioner in Arizona was $14,368 in 2024. This price can vary greatly based on the type of system, the size of your house, and the quality of your home's insulation.
Now, you might be thinking, "But I know a guy who'll do it for 7,500 bucks." Remember, there are considerably more companies selling systems for over $16,000 than there are small operators installing systems on the cheap for beer and weed money.
We’ve never found that “any system” is better than the “right system” for your comfort needs, the environment’s needs, and the needs of the system itself. We are always sad when we have to rip out a cheap 3-year-old system that didn’t cut the mustard.
The most important thing to know is the true value of a high-quality installation. You really should get what you pay for. We also have to take into consideration the refrigerant mandates coming up in January 2025, as well as the newly released rebate programs.
Let's break down how this all works.
Types of Air Conditioners Suitable for Arizona Heat
Air conditioners suited for Arizona heat come in three main designs:
- Package Systems
- Split Systems
- Ductless Mini Splits
Package systems are the most common in Arizona, followed closely by split systems. Ductless mini-splits are most often used as additional comfort control to a primary system in specific rooms.
You also have two primary fuel sources when it comes to air conditioning in Phoenix, and each of these affects the HVAC system design.
- Dual Fuel Systems (Gas and Electric)
- Electric Heat Pump Systems
Factors Affecting Your Specific AC Price
Prices will range drastically based on eight important factors:
- The size of the system your home needs
- The type of system you purchase
- The features that benefit you the most
- The warranty provided
- Changes in refrigerant mandates
- The size of the company installing it
- The quality of the installation
- The level of insulation
1. System Size
Approximately 24% of new AC systems in Arizona are incorrectly sized for the house they're installed in. Of these, 83% are oversized due to one of three reasons:
- Incorrect ductwork size and design, causing ineffective (and invisible) airflow issues.
- Salespeople who don't have a clue how to size equipment properly.
- No consideration for additions or lack of insulation.
The remaining 17% are undersized, mainly because undertrained salespeople fail to account for homes that have been renovated. In some cases, lazy salespeople just match the size of the existing equipment, assuming it's good enough. With meaningful changes in refrigerant, this leads to AC systems that struggle to keep up when it gets hot.
Why does size matter? Because you want your system to last as long as possible at the lowest cost of ownership without jacking up your airflow.
2. System Type
The reason your HVAC System type matters in 2025 revolves around government initiatives to switch people off gas and into electric heat pump systems. While it is true if you have a rooftop package unit, it will cost nominally less than a split system unit tucked into your garage or closet; it’s the cost of converting to an electric heat pump that makes up the difference in spend when making a change.
It’s important to know that over 70% of electrical panels are not prepared to handle the load of a new Heat Pump HVAC system in Arizona. You may need to upgrade your electrical panel to be able to manage a more modern household. Depending on your home’s needs, this could be a $5000 to $10,000 touch.
While this is likely necessary anyway for the majority of houses built over 25 years ago, it should factor into your decision on whether to convert from gas at this time.
You may also want to start thinking about a backup generator if you are updating your panel, as well. As the infrastructure gets more loaded, so does the risk of power outages. For the aging population in need of medical equipment security, a generator is important to keep you safe.
When heat pumps eventually become the standard, you should anticipate a sharp increase in gas prices to offset the lower demand. With new rebates for Arizona State in 2025, in conjunction with the current federal rebates, now is a good time to consider offsetting the cost of conversion, but only if your system actually needs to be replaced.
3. System Features
Systems range in quality and options, from basic, single-stage motors and non-programmable thermostats to variable-speed inverter technology that saves you money with whisper-quiet operation. While the cheapest prices seem like the obvious choice, very often, they are the most expensive to own for a few key reasons:
- A shorter life should be expected from systems that come in cheap. Lower-quality parts and harsher operation will typically get you what you pay for. If a slightly better system lasted twice as long, it would actually be a lower price than the cheap option.
- A higher cost of ownership would be normal for a system that will use more energy to operate and be more prone to wear and tear, especially in the heat of Arizona.
- The cost beyond cash includes the stress and time cost of breakdowns, more disruptive operation, and the time living with discomfort until the system is back up and running.
What we’ve found are sweet spots for different scenarios. There is almost always a range of options that will serve the customer's comfort needs, the environment we are putting the system in, and the system requirements itself. When we sort out all the information, the key is to come up with the perfect range of options that give you the choices that serve you best.
4. Warranty
All manufacturers provide a warranty on the parts they sell. As individual components, you often see them provide the obligatory one-year parts warranty. As a system, they will offer parts warranties on specific items up to 10 years, with a few boasting lifetime warranties on specific components.
Most manufacturer warranties in excess of 10-12 years are gimmicks to make you believe they are selling superior products, but they often come with enough caveats that they will not have to actually deliver on the promise they make. I inherently do not trust anyone who says lifetime warranty, as all mechanical and electrical components have a shelf life.
For example, because they know the average American family moves every 7 years, the warranty is placed on the purchaser, not the equipment. A despicable act if I ever saw one.
In Arizona, Contractors are obligated to offer a 2-year workmanship warranty, including any repairs or replacements. This means any new system should have at least a 10-year compressor warranty and a two-year workmanship (labor) warranty. A repair should have at least a 1-year parts warranty and a 2-year labor warranty.
Most homeowners really want one simple thing. You want your air conditioner to be invisible and do its job for as long as possible. Am I wrong?
For a bit more money, a Contractor could provide a fully transferable, comprehensive warranty that only excludes the obvious—air filters. Since everything else is a part of the system and, by rights, should never wear out within the warranty period, why make the customer pay exorbitant labor charges on a system the Contractor installed? Insanity.
5. New 2025 EPA Refrigerant Mandates
Starting January 1, 2025, new residential and light commercial air conditioners and heat pumps installed in Arizona must utilize refrigerants with a Global Warming Potential (GWP) of 700 or less. This mandate, established by the U.S. Environmental Protection Agency (EPA) under the American Innovation and Manufacturing (AIM) Act of 2020, is trying to phase down the environmental impact of hydrofluorocarbons (HFCs).
The primary refrigerants expected to replace the commonly used R-410A (which has a GWP of 2,088) are R-454B and R-32, both classified as A2L refrigerants with significantly lower GWPs. These alternatives are designed to be more environmentally friendly, aligning with global efforts to reduce greenhouse gas emissions.
This, of course, means more technology, more research and development, and more cost to consumers. Now, I’ve watched a bunch of companies put out fear-mongering posts on Facebook talking about the price of systems rising 25% to 30%, and they’re right. What they don’t say but surely imply is that it’s 25% to 30% more to the end user, and that is just deceitful.
The price increases are at the cost and wholesale level, not at the consumer level. While we are all going to be paying more for HVAC systems in 2025, the difference is hundreds of dollars more on equipment costs, not thousands or tens of thousands of dollars for customers.
Just more dirty tricks to watch out for.
6. Company Size
As AC companies get larger in Arizona, their operating costs increase significantly. The expenses of management, marketing, and sales add to the price you pay. While some companies run efficient operations at fair margins, others expect you to pay for their inefficiencies and greed.
Fancy truck wraps, billboards, TV ads, and expensive Google ads all drive up the cost of doing business. And salespeople in khakis and shiny shoes are an expense that's passed along to you, the buyer.
On the flip side, when a company is really small, they might not offer the same level of convenience before and after the sale.
We believe that actual family-owned businesses that live in the same communities you do and provide a quality service with quality repairs and a long-term mindset are the best options for your dollar.
Why does size matter? Because you want to pay a fair price and reward efficiently run companies that can hold up their side of the bargain after the purchase has been made.
7. Installation Quality
My mentor, Mick, always told me, "The most important day of an air conditioner's life is the day it's installed." System failures can almost always be traced back to a lack of quality and attention to detail in the installation process.
While big companies are keen to 'rip and replace' two to three systems a day per install truck, this is where corners get cut, and important details are missed. To "keep their guys busy," they can always come back and fix their mess later. For some, it's even a profit center. We think this is reprehensible.
Taking the time to do an installation right makes all the difference in the world. In my personal experience, we saw a drop in callbacks and warranty work when an installation took an extra hour and 38 minutes compared to the "fast installers."
Why does installation quality matter? Because it will save you time, stress, anxiety, frustration, and effort after the sale has been made. Nobody has time for unnecessary hassles, and nobody wants to pay for labor on a poor-quality job that has repairs being done way too soon for a new system.
8. Insulation Levels
As insulation levels in your home vary, so will results. From attic insulation to window glazing, and the weatherstripping around the doors, there are a lot of places cool air can escape on a hot day.
The more places you button up your home, the more you save, but this doesn’t come without consequence. The more sealed a home, the more consideration has to be put into air quality. While you trap in the cozy temperatures, you also trap in all the toxins, invisible gases, and smells. Insulation in your home is more than dumping in some pink batting or styrofoam; it’s about measuring air quality and airflow carefully and finding a healthy balance to keep you and your family healthy and safe.
What Goes Into the Price of an AC Installation in Arizona?
Running a company costs significantly more than most people understand. While some companies struggle with the burden of their inefficiencies, others are morally burdened with entitled greed. Find a company that you feel is walking the high road, looking out for your best interest in an efficient and trustworthy manner.
An average-sized, well-run company spends the following to operate before taxes are paid to the IRS:
- 40% on labor, payroll, and health benefits
- 1% on efficiency performance pay
- 25% on permits, services, equipment, and materials
- 5.5% on vehicles
- 2.5% on banking and interest charges
- 3.5% on facilities and utilities
- 1.5% on insurance and workers' compensation
- 3% on training
- 10% on marketing
- 8% profit (before tax, interest, depreciation, and amortization)
Business comes with risks and rewards. When there aren't enough appointments, the cost of payroll goes up. Then, the cost of marketing increases to get more appointments, with no guarantees that it will work. When the weather changes and there's no demand for the service, those fixed costs don't go away.
When everything works well, operationally excellent companies will profit a little more. And as companies get larger, they can leverage economies of scale. Just remember, they have a much larger beast they need to keep fed, and that beast eats customer cash.
2025 Package Unit Pricing
Package units are the simplest design and, therefore, the less expensive primary AC system for a home in Arizona. Heat exchangers are built into these systems, so they take up less living space in your home.
While more susceptible to weather, a well-maintained rooftop AC unit typically lasts 15 to 20 years, while a package unit in the attic can last as long as 35 years with some proper TLC, depending on the installation quality. That makes attic package units the lowest price option for a primary HVAC system in Phoenix, AZ.
One additional expense for AC Package units is the crane needed to place them on the roof. This is often the reason for a delay in installations. Can you get it up without a crane? Yes.
Should you? No. The chances of damaging your system are exceptionally high, particularly when getting over the lip of the roof. The following prices include the cost of a crane:
These prices include all the typical expenses listed above. They are based on a well-run, medium-sized family business in Arizona in 2025 and reflect a comprehensive parts and labor warranty for 10 years. They are neither the lowest or the highest priced systems available, but a sound estimation of the most common product purchased in Arizona in 2025.
2025 Split AC System Pricing
Split AC systems are a three-piece design, making them a bit more expensive. The furnace is a separate unit that goes inside a closet, garage, or attic. A well-maintained split AC system should last 20 to 25 years, and with proper preventative maintenance, we've seen them last 35-40 years without drama. The installation quality and environmental conditions will dictate the future of your new Split HVAC system.
While there is an argument that you could use the existing heat exchanger with a new evaporator coil and condenser, this isn’t a scenario without challenges. As technology changes, buyers run the risk of being unable to match a furnace to their system later, forcing them into a difficult and expensive replacement of all their equipment.
Because the blower motor is in the furnace, you have to have all the bits and pieces match up to work properly. The following prices include the cost of the furnace:
These prices also include all the typical expenses listed above. They are based on a well-run, medium-sized family business in Arizona in 2025 and reflect a comprehensive parts and labor warranty for 10 years. They are neither the lowest nor the highest priced systems available, but a sound estimation of the most common product purchased in Arizona in 2025.
PRO TIP: There's no such thing as a free furnace. That's just bad (and illegal, by the way) marketing by people who believe consumers are stupid.
2025 Ductless Mini-Split System Pricing
As the name implies, these systems do not require ductwork to function. They condition the air from evaporator coil “heads” that you place in specific rooms. You can run the air conditioner normally to cool the space and in reverse to heat the space.
Ductless mini-split systems are fantastic for homes without ductwork or where adding ductwork is cost-prohibitive (or unsightly). Mini-splits are most often used in Arizona as supplementary cooling and heating solutions to improve the comfort of specific spaces.
A well-maintained ductless mini-split AC system should last 12 to 17 years, and with proper preventative maintenance, we've seen them last 22 years. They are a little more finicky than a split AC system, and all the heads will need annual maintenance, but on the upside, there are no ducts to clean. As you might have guessed, the installation quality and environmental conditions determine your mini-split's lifespan.
Ductless mini-split systems are excellent for Arizona weather—98% of the time. Where they fall short is when you need them most—extreme heat and cold. This is often why they act as a support to a primary, ducted AC system but won't steer you wrong most of the time.
In a pinch, with the money you save on these units, you can afford some space heaters and ice cream.
These prices include all the typical expenses listed above. They are based on a well-run, medium-sized business in Arizona in 2025 and reflect a comprehensive parts and labor warranty for 10 years. These are neither the lowest nor the highest priced systems available, but a sound estimation of the most common product purchased in Arizona in 2025.
To Replace or Repair? That’s The Real Question.
I have a real issue with these greedy companies that are so desperate to feed the giant mutant they've raised. Don't get me wrong—I respect a well-run, efficient company that does good work, no matter its size.
What I detest are companies that are willing to do anything to generate revenue out of greed and desperation. They’re not here to serve the community. My community. Our Community! They're here to bleed it dry and go back to Wall Street with everyone's money, regardless of the human cost.
These out-of-state private equity companies don't care about anything or anyone but themselves. They run their business from a spreadsheet. This leads them to manipulate unsuspecting people into purchasing new equipment way before it is truly necessary.
These morally corrupt companies are putting Americans in a tough spot financially, and they don't care. Certainly, there comes a time when you need to replace your system, but at least look at what a reasonable repair cost would be first.
Not a band-aid. Not a parts replacement exercise.
A proper repair. Fixed fixed.
There is no legitimate energy-saving graph, cost analysis case study, or "ROI" explanation that can justify buying a new system prematurely. Yes, even a 10-year-old system. Or a 15-year-old system.
It's nonsense disguised as math. It's trickery. It's snake oil.
Preventative maintenance and lasting repairs will always win the real math game. Strangely enough, those scenarios are never presented in the slick pitch to convince you to part with your hard-earned cash.
How do I know? Because I have an old system. Really old. And my bills aren't exorbitant. And repairing it is still reasonable. And a little preventative maintenance is often as good as a cure.
So that's how I've decided to run my AC repair company.
I'm Frankie, and I'd love to be your AC Repair Guy. We’ll replace it when we have to, but not before. It’s your call.
