Tempe, AZ Heat Pump Leasing & Installation
In this guide
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
Tempe, AZ Heat Pump Load Calculator
Use our calculator below to estimate your home’s heating and cooling needs based on square footage. It uses ACCA-standard design conditions for Tempe, AZ: 110°F cooling and 60°F heating outdoor temperatures, with a 72°F indoor setpoint. For a precise Manual J load calculation and personalized quote, connect with Palmetto’s team. Get in touch with our team for an official quote.
Step 1 of 3
Home location & size
Your home’s location and size directly impact heating needs.
Step 2 of 3
Home attributes
Step 3 of 3
Additional details
Description of what this means for context.
Estimated Heating Needs
Your home’s location falls within the a climate zone with the average extreme winter falling between 10° – 15° F.
Home Details
Recommended equipment capacity
60,000 BTU
5 Tons
Calculated Cooling Mode
102,000 BTU
8.5 Tons
03
Buy it or finance it. Your comfort, your call
There's no wrong way to get cozy. Here's how the options stack up, so you can choose what works best for you.
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Cash |
Loan |
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|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
Local Incentives
Tempe, AZ Heat Pump Rebates & Incentives
Local and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to Tempe homeowners.
Efficiency Arizona HEAR
Up to $14,000The HEAR program provides rebates for eligible electric appliances and upgrades in low-income and historically underserved households. The program is available through September 30, 2031 for qualified projects including the installation of Energy Star certified electric heat pumps for space heating and cooling.
SRP Heat Pump Water Heater
$500SRP offers a $500 rebate per unit to customers who install qualifying heat pump water heaters. The HPWH must be installed by a contractor licensed in Arizona to install residential plumbing before April 30, 2026.
Federal IRA Tax Credit
Up to $2,000The Inflation Reduction Act provides a federal tax credit of up to $2,000 for qualifying heat pump installations through 2032.
Tempe homeowners have access to multiple heat pump incentive programs in 2026. The Efficiency Arizona HEAR program offers up to $14,000 in rebates for qualifying low- and moderate-income households, while SRP provides a $500 rebate for heat pump water heater installations. Additionally, the federal IRA tax credit of up to $2,000 remains available through 2032. Palmetto can help homeowners navigate these programs, verify eligibility, and maximize available rebates to reduce upfront costs for heat pump installations.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
04
Climate Zones
Tempe sits in IECC Climate Zone 13, which means mild winters with design temperatures around 60°F and scorching summers that can hit 110°F. This hot-dry climate demands a heat pump system sized for serious cooling capacity while still handling those occasional chilly desert nights. At Palmetto, we understand exactly what works in Tempe's unique conditions. Explore other climate zones below, or enter your ZIP code to confirm your zone.
Climate Zone 1
Climate zone 1 is not typically seen within the United States outside of Alaska. It represents the coldest climates on the planet.
Climate Zone 1A
Avg. extreme winters: -60° to -55° F
Climate Zone 1B
Avg. extreme winters: -55° to -50° F
Tempe Electricity Prices
Understanding electricity costs in Tempe helps you make smarter decisions about home comfort systems that can save you money for years to come.
Arizona's electricity rates have climbed steadily from 12.5 cents per kWh in 2021 to 14.9 cents in 2024—a 19% increase in just three years that directly impacts your monthly cooling and heating bills.
Heat pumps offer a practical solution to rising energy costs. Because they're 2-3x more efficient than traditional HVAC systems, they use significantly less electricity to deliver the same amount of heating and cooling for your home.
As electricity rates continue their upward trend, that efficiency gap becomes increasingly valuable. A heat pump can help protect your household budget against future rate increases while keeping your Tempe home comfortable year-round.
Price of Energy: Arizona vs National Average
Tempe Area Utility Providers
Tempe residents primarily receive electricity from two major utilities: Arizona Public Service (APS) and Salt River Project (SRP). According to 2023 data, APS averaged 15.3¢ per kWh, while SRP averaged 12.5¢ per kWh.
Both utilities charge below the 2023 national average of 16.0¢ per kWh. SRP's rates are particularly competitive, coming in under Arizona's state average of 14.0¢. These favorable rates reflect Arizona's diverse energy mix and public utility infrastructure.
Lower electricity costs make heat pumps an even smarter investment in Tempe. Their exceptional efficiency means you'll use less energy for heating and cooling, maximizing savings where electricity is already affordable compared to national rates.
Tempe Utilities Electricity Rates
Let our smart tools do the heavy lifting.
Get personalized tips, usage insights, project tracking, and that daily satisfaction of making your energy work smarter with the Palmetto mobile app.
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Repair versus replace
When a heat pump is in need of repair it is worth considering whether a replacement would be a better investment. While each case is unique, we generally recommend investing in a new unit when repairs exceed $5,000.
A heat pump's lifetime is impacted by a number of factors including environment, use and the quality of the unit. It's important to choose the right unit for your climate zone and home's unique attributes.
When you are in need of repair, we recommend choosing a service provider that is an expert in the heat pump brand you have installed, and checking online reviews to ensure you are investing in the right level of service.
| Potential repair | Cost range | Description |
|---|---|---|
| Capacitor Replacement | $150 - $400 | Common issue when unit struggles to start or makes a humming noise. Capacitors store the electrical energy needed to start the compressor and fan motors. |
| Refrigerant Recharge | $250 - $750 | Needed when the system loses cooling or heating efficiency due to low refrigerant levels. Includes leak detection, repair of minor leaks, and recharging the system to the manufacturer-specified level. |
| Reversing Valve Replacement | $450 - $900 | Required when the unit cannot switch between heating and cooling modes. The reversing valve directs refrigerant flow and is unique to heat pump systems. |
| Compressor Replacement | $1,500 - $3,000 | Major repair needed when the unit fails to heat or cool entirely. The compressor is the heart of the system, circulating refrigerant between the indoor and outdoor coils. |
| Evaporator/Condenser Coil Replacement | $1,200 - $2,800 | Replacement needed when coils develop leaks or corrosion that cannot be economically repaired. Coil damage reduces heat transfer efficiency and can cause refrigerant loss. |
| Control Board Replacement | $500 - $1,200 | Required when the system has electrical failures or erratic behavior. The control board manages all system operations including defrost cycles, fan speeds, and compressor staging. |
| Full System Replacement | $4,500 - $8,000+ | When repairs exceed the value of the unit or multiple major components fail simultaneously. Includes removal of the old system and installation of a new heat pump with updated refrigerant lines and electrical connections. |
Frequently Asked Questions
Heat pumps make excellent sense in Tempe, where cooling demands dominate most of the year. In Climate Zone 13, with summer temperatures reaching 110°F and mild winters rarely dipping below 60°F, heat pumps efficiently handle both cooling and heating needs while using less energy than traditional systems, helping manage electricity costs at Arizona's current rate of 14.9¢ per kWh.
Palmetto makes heat pump installation accessible through two options: the Comfort Plan with $0 upfront and all maintenance included, or direct purchase with potential federal tax credits up to $2,000. Both approaches deliver year-round comfort while reducing energy consumption, making them a practical investment for Tempe homeowners looking to modernize their home climate control.
Heat pumps are highly efficient in Tempe's climate, particularly for cooling during the intense summer months when temperatures reach 110°F. Modern heat pumps can deliver 2-4 times more heating or cooling energy than the electricity they consume, making them cost-effective even with Arizona's electricity rate of 14.9¢ per kWh.
Tempe's mild winters, with design heating temperatures around 60°F, create ideal conditions for heat pump efficiency since they perform best in moderate climates. Palmetto offers flexible options to help you benefit from this efficiency—choose our Comfort Plan with $0 upfront and included maintenance, or purchase directly to qualify for up to $2,000 in federal tax credits.
The choice between leasing and buying a heat pump in Tempe depends on your financial priorities and homeownership plans. Purchasing outright means you own the equipment and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act, plus local rebates. Leasing through Palmetto's Comfort Plan requires $0 upfront and includes all maintenance and repairs for life, making budgeting predictable.
Given Tempe's extreme cooling demands—with design temperatures reaching 110°F—maintenance becomes especially important for system longevity and efficiency. If you prefer avoiding large upfront costs and want protection from repair expenses as your heat pump works hard through Arizona's intense summers, leasing offers peace of mind. If you can leverage tax incentives and plan to stay in your home long-term, purchasing may provide better value over time.
Heat pump costs in Tempe typically range from $5,000 to $15,000 for a complete installation, depending on your home's size, existing ductwork, and the system's efficiency rating. Tempe's extreme cooling demands—with design temperatures reaching 110°F—often require robust systems that can handle Arizona's intense summers while providing efficient heating during milder winters.
Palmetto offers two straightforward options: a Comfort Plan with $0 upfront and predictable monthly payments that include all maintenance and repairs, or direct purchase where you own the equipment outright and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act. With Arizona's electricity rate at 14.9¢ per kWh, an efficient heat pump can deliver meaningful energy savings compared to traditional cooling and heating systems.
In Tempe's hot climate, heat pumps are typically worth the investment due to significant cooling cost savings. With Arizona's electricity rate at 14.9¢ per kWh and temperatures reaching 110°F, an efficient heat pump can reduce your energy bills compared to traditional HVAC systems while providing both heating and cooling year-round.
Palmetto makes heat pumps financially accessible through two options: a Comfort Plan with $0 upfront and maintenance included, or direct purchase with potential federal tax credits up to $2,000. The right choice depends on whether you prefer predictable monthly payments or owning your equipment outright while capturing available incentives.
In Tempe, licensed HVAC contractors install heat pumps, and it's essential to choose professionals familiar with Arizona's Climate Zone 13 requirements. These specialists understand how to size and install systems that handle Tempe's extreme cooling demands, with design temperatures reaching 110°F, while maintaining efficient heating during milder winters.
Palmetto offers professional heat pump installation in Tempe through two flexible options: a Comfort Plan with $0 upfront cost and included maintenance, or direct purchase where you own the equipment and may qualify for up to $2,000 in federal tax credits. Both options include expert installation by certified technicians who ensure your system operates efficiently in Arizona's desert climate.
HVAC is an umbrella term that stands for Heating, Ventilation, and Air Conditioning—it describes any system that controls your home's temperature and air quality. A heat pump is actually a type of HVAC system that both heats and cools your home by transferring heat rather than generating it, making it highly efficient in Tempe's Climate Zone 13 conditions.
Unlike traditional HVAC systems that use separate furnaces and air conditioners, a heat pump handles both jobs with one unit. This efficiency matters in Tempe, where cooling demands reach 110°F and electricity costs 14.9¢ per kWh. Palmetto makes heat pump installation accessible through flexible options: a Comfort Plan with $0 upfront and included maintenance, or direct purchase with potential federal tax credits up to $2,000.