Category Archives: Cost of New A/C equipment

How to avoid paying twice for heating and AC equipment installations

I recently attended a meeting here in Austin, and had some spare time to visit with two other attendees. It turns out that one was an attorney, and another was a heating and AC contractor.  The attorney told a really disturbing account of how she had to pay twice for her home renovation and new heating & AC system. During this discussion, the HVAC company owner shared his experience on how to avoid getting a lien placed on your property, having to pay twice for materials, labor, or both.  Although our discussion was about HVAC, the same process holds true for most any type of home or building improvement projects such as roofing, wiring, plumbing, windows, kitchen or bathroom renovations.

The particulars on this subject vary by state or local jurisdiction. Before going further, I’ll state the following disclaimer: this general article is in no way intended to be advice for a specific location or situation. Rather, the intent is to make you aware of potential problems. Then, you can choose a good contractor, and if needed check with your local authorities or attorney to take preventative action that is appropriate for your location.

Framing the potential problem: unpaid people “downstream”
Here’s the scenario you basically need to avoid: paying a contractor for materials and labor without assurance that they have paid suppliers of materials and sub-contractors. The reason is straightforward: even if you pay your contractor in full and in good faith, if that contractor does not pay others “downstream” who provided materials or labor, those downstream parties could come back and seek payment or other remedies directly from you.

Outline of some ways to avoid paying twice

Below are some tactics you can use or combine to avoid issues:

  1. Most importantly: deal with reputable contractors that you have thoroughly vetted. In addition to paying everyone who is owed, stand up contractors also are usually bonded, carry insurance, keep current with technical updates, and have other attributes that benefit you.  Keep in mind that the cheapest bid for a new heating and AC system may not be the best value. Over its life, monthly utility bills and other operating and repair costs will often be higher than the initial purchase price of your system.  Get a checklist here.
  2. Get release of lien documents signed by all parties who might be able to make a claim for payment against you or file a lien against your property.  There are several types of releases – get the correct release for your situation and locality.
  3. Consider paying with “two party” checks:  make the check payable to both the general HVAC contractor and second parties, as appropriate. The second parties can be the supplier of materials or labor such as a sub-contractor.  For this to work, though, you have to know who the second parties are and how much they are owned.  If the contractor has “issues” you might not have access to all the info you need.
  4. Pay suppliers directly and separately for materials. Of course, you will need to work with the contractor to make sure the equipment is correctly sized, etc. Make separate payments for labor costs and use the tactics above.

In some cases, paying with a credit card might give you some leverage.  If anything about the project does not work out as needed, you might be able to get the credit card company to help you remedy the problem before you pay your bill to your card issuer.  However, if the contractor’s bank account were to be closed, there could a lot less leverage to exert.  If you are financing your system, your lender will often have a say in who gets paid and how the funds are disbursed.

If you have experience with this topic, please send your comments in so that others can benefit.

Dry Charged R-22 Condensing Units For Air Conditioners: What’s up?

Now and then I run across a topic with potential for significant impact, but the details are being debated.  The topic of today’s blog, R-22 dry charge condenser units, is one of those.  Rather than call this blog “news” or “facts”, I’m putting this out as a “heads up” (if your older R-22 system breaks down and are presented with a proposal for one of these), but more as a request for crowd sourcing from those of you who work in the HVAC industry or have experience on this topic.


The following is a bullet point summary of the high points I’ve seen on this topic:

  • The refrigerant R-22 is being phased out by the U.S. EPA (2009) because of links to ozone depletion.
  • There seems to be (depending on who is describing it…) a “loophole” or “wiggle room” in the wording in the law that allows U.S. manufacturers to keep making new AC condenser units that use R-22.
  • A key point is the definition (some are saying misclassification) of the condensing unit as a component.
  • These condensing units cannot be shipped charged with refrigerant R-22. As a result, they are shipped with an inert (nitrogen) holding charge. The R-22 in the old system is supposed to be captured. Then, the nitrogen must be evacuated from the new unit. Then the new unit must be field-charged with R-22 when installed.  Thus, these R-22 units are called “dry shipped” condensing units.
  • One projection I read (I have not yet been able to verify these numbers…) stated that up to six AC manufacturers will produce about 600,000 of the dry charged units in 2011. Each of these units will require up to appx. 8 pounds of R22 refrigerant.

Possible Pros and Cons

  • Meeting the letter of the regulation vs. the spirit or intention of it.
  • For a home or building owner of an older R-22 system with a worn out /failed outdoor component, the initial cost of having it replaced with a dry-charged R-22 unit could be substantially less expensive than getting a new system with R-410A.
  • Consumers have been educated that R-22 needs to be phased out, and that we should buy higher-efficiency, environmentally friendly systems that use R-410A.
  • Rebates and tax credits need to be factored into any major AC and heating purchase. Most rebate and tax credits require a whole new system purchase – I have not seen a major component qualify.  (Since tax credits are taken post-purchase, always get tax credit details in writing from your contractor before you buy.)
  • Field matching of components can cause issues (sooner or later..) that having a new, factory matched system will avoid.
  • Since existing R-22 units come in a wide range of ages and types, there are some potential compatibility issues. A technical bulletin from one manufacturer of the dry-charged replacement units I found read as follows: “If the (indoor) coil was made in 1999 or earlier replace the coil or air hander.  Do not install a new condenser if the indoor unit has a  “cap tube” style coil.

Why the confusion or controversy?

  • Well, for starters, it seems that at least one of the companies manufacturing these (a major manufacturer, of these) dry charged units equipment is petitioning the EPA to modify the rules to end the production of these units.  See the link below, and to read comments that attest to the strong opinions on this topic, scroll to the bottom of the linked article.
  • When I visited several of the manufacturer websites, I see references to the compressor motor and corrosion-resistant cabinet, and that the outdoor units make an alternative solution to compressor replacement.  So, for us non-technicians, the whole outdoor unit is involved in the replacement, not just the condenser coil.
  • Within the industry, the debates fall under several themes: cost (initial and later), refrigerant availability, effectiveness of the procedure, proper installation and handling of refrigerant, environmental/regulations.

Link to article in Contracting Business:  Carrier Petitions EPA To Close R-22 Loophole

More info added 8/6: check out this 6-minute YouTube clip. It is a panel discussion by HVAC industry leaders on this same topic

If you have experience on this topic, please let us hear from you.

Federal Tax Credits For Air Conditioning and Heating Systems Expire Soon

If you have been considering buying a new A/C and heating system, you should start taking action, because the Consumer Energy Efficiency program is set to expire December 31 of this year. This is less than 120 days away.

To learn more you can visit the federal government Energy Star website.  I find this website to have a lot of useful information about the tax credit requirements. Included in that info is the following statement (with the first sentence written in red on their website for emphasis)

Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit.

As we mention in our video that describes how to compare the cost of AC and heating systems installed be sure to get the details in writing from the local HVAC contractor who installs your equipment, verifying that the installed equipment meets the federal guidelines for the tax credit.  The reason: it will be later, when you send in your tax returns, that you are able to take the tax credit, and you would not want to find out then that the equipment or installation date did not qualify.

Since these programs are, in our opinion, triple wins we hope that another program or an extension will be available.  In our next blog, we will write about state tax credits and rebates.  If you have experience related to this topic, please post so others can get the benefit of your knowledge.

Can A 13 SEER AC Unit Make Sense For Energy Efficiency?

I’m visiting this week with some former Austin neighbors who now live at 8,000 feet elevation in the mountains above the town of Ruidoso, NM. They just had a new house built and, being curious about their new HVAC system, I took at look at the outside AC unit. When I looked at the energy efficiency rating and saw only 13 SEER, my first thought was this: their builder ripped them off! Then, I remembered my hosts saying that, even thought it’s mid-August, they had only run their AC system for a few hours on two afternoons all summer. Luckily, I had not embarrassed myself by thinking out loud.

My next stops were under the house and in the attic. There I saw a gas furnace rated at 97% efficiency (the efficiency range of new furnaces is about 80-98%) and super thick insulation. Thinking it though, and knowing about the “whole house” approach to energy use and conservation, the reasons for their choices became clear. Due to the high elevation, colder winters, and minimal need for air conditioning, they spent proportionally more on passive solar design and windows, high-efficiency heating, and extra insulation to retain more heat.

Coming from Austin, with its long, oven-hot, subtropical summers, at first it seems a bit ironic that relatively low efficiency AC equipment of any kind can make sense.  However, when considering what my friends did with the extra money that higher efficiency equipment would have cost (or other energy use that was avoided in not generating the income to buy overkill efficiency) the interconnections do get interesting.  The focus of this post is on a new system. For a list of way you can lower utility bills and energy usage on your existing equipment, visit this page.

Wise AC and Heating System Buyers Know: It’s Not About the Box

Today, while reading in an interview in a HVACr trade journal, I read a quote that summed up an important point:

It’s not about the box, it IS about the whole house

In this case, the “box” is the new AC and heating equipment you are thinking about having installed. And the whole house (actually the part HVAC insiders call “the envelope”) interacts with the outside elements to determine how comfortable you are inside, how hard your AC and heating equipment has to work, and how much you pay (or save) each month in utility bills.

Here’s a real life example from a reader who sent an email to us recently.

This fellow lives in the northeast U.S., and was quite surprised when his local AC contractor discouraged him from buying the top of the line, most efficient system. Rather, the contractor advised him go for the 16 SEER A/C unit, and to take the extra $2,000 the most efficient AC was going to cost and use that to add insulation to his attic and seal up leaky walls and electrical outlets.  Although the summer cooling needs of this northeastern state are lower than central Texas where we are, the same principle applies everywhere:

For each home or building and its climate, there is an optimum mix of heating or cooling efficiency attributes and energy efficiency improvements that could be done to the “envelope” that interacts with the outside air.

Since you only buy an new AC and heating system every decade or so, you don’t have to know everything about this topic. Your best bet is to be aware of the big picture and ask the right questions. This way you will find a local contractor who uses best practices (training, certifications, experience & business practices) and takes the “whole house” approach.

Let us hear from you if you have experiences to share along these lines

Compare Bids for a New Heating AC System AND Anticipate Contractor Add-On Costs

Comparing Equipment Features
Attempting to compare heating and AC brands, or shopping for features get the most attention from buyers. We wrote about this in last month’s blog and in other place.  We provide a free grid to compare new equipment cost at a glance. From your research or bids, you can fill in the blanks on this printable chart to cut through the “noise” and understand the equipment efficiency and other objective features. However, this equipment must be installed as a system in the structural environment of your home or building, which has variables. So, on to our main topic.

Preparing for What ELSE Might be Necessary to get a New HVAC System Installed
In situations where the new heating and cooling equipment is going into an existing structure (as contrasted with new construction) there are some major potential “gotchas” to prepare for.  I’ve experienced this personally, so hopefully you can benefit from my lessons, some of which were costly. Two good examples of this are electrical wiring and ductwork. They both have the potential to be significant “add ons” to the scope of the work in the project.

Electrical Wiring
If you are having central heating and AC installed into an existing structure for the first time, be sure to get info about wiring conditions.  This would be especially true for a older home or building with original wiring.  Essentially, you want to make sure that the wiring, connections, and circuit breakers, etc. can safely and efficiently handle the new load. If they cannot, you will experience circuit breakers tripping or perhaps much worse.  Because inadequate wiring will increase the cost of a job or might slow down the decision to buy a new system,  some equipment installers might be tempted to not bring it up at all. Or, they might focus the discussion on the new equipment first, get that signed, then bring up the wiring issue and cost.  This is also true for an older structure that already has central heat and air, but needs them replaced.

If your home or building already has ductwork, there are several parallels with electrical wiring to consider:

– The existing ductwork might be usable, OR it may need to replaced due to its structure, design or condition.

– Most potential issues can be seen ahead of time, but some could be discovered during installation of the new system.

– Project add-ons can be  awkward to negotiate or expensive to buy, because work has already begun.

The solution: Focus First on Getting High Quality Advice and Labor on the Installation
We rarely miss an opportunity to highlight the variable that matters most in heating and AC: the quality of the installation.  If you choose a dealer whose sales reps and technicians are trained, experienced and  ethical, dealing effectively with existing wiring or ductwork should be automatic. That way, you can be sure to get the right equipment for your situation and needs AND deal with potential variables in the original project scope.

If you and your contractor handle it well, getting a new system installed will be the start of a long-term relationship that includes preventative maintenance. There are also manufacturer and possibly installer warranties to consider, and those will be the topic of our next blog post.

If you find this useful, please share your thoughts and experiences with other reads. If not, let us know how we can improve.

Best Way To Compare New AC and Heating Systems Before Buying

This blog describes how to cut through the “clutter and noise”, and buy a new furnace and AC system wisely.   I first learned this way of thinking while working my way through college in a bicycle shop, and there are some useful, current parallels to the way HVAC equipment and systems are sold.

More Brands Than Factories
Working in the bike shop, I learned that there are a lot more bicycle brands than there are bicycle factories.  Same (or very similar) bicycles…different label, marketing and prices.  Bicycles have a frame onto which major and minor components, made by other manufacturers around the world, are added.  These are combined in a box at the bike frame factory, sold through distributors, and must be assembled by a trained mechanic at a shop to be warranted.

With air conditioners and furnaces, the frame is a box, usually made sheet metal. With a few exceptions, the main components, such as compressors, condensers, fans, coils, heat exchangers, come from factories around the world. As in the bicycle brand example, there are fewer AC and heating component factories than there are brands.  Parts do come in differing grades of quality and efficiency, and the cost (and sometimes the complexity) usually goes higher with the efficiency rating.

There are some generalities about HVAC equipment brands that may be worth knowing. However, before thinking about brand there are two more important aspects a buyer needs to focus on:

Needs Local Professional Assembly or Installation

For safety and efficiency, we mechanics often had to true the bike wheels, and adjust the gears & brakes.  Then we adjusted parts to the needs of the rider, and added accessories based on the conditions the rider would encounter.  If we goofed up, the bike would not ride efficiently or the rider could crash and get hurt.

With AC and heating equipment, the installation is a critical factor. Some types of mistakes are very difficult to correct.  First, the local company that installs your equipment should have helped you choose the size and efficiency specifications appropriate for your climate, envelope (the part of your house or building that interacts with the outside air), and budget. Next, the installers have to be skilled in plumbing, electrical, refrigeration and more to connect the wiring, piping and refrigerant to make the equipment run safely and efficiently. Also, if your existing ductwork is used, they must make sure it is in good condition and sealed.  Should the wrong size or type of equipment get installed into your home or building, it will be a major hassle making things right.

Assure Quality of Installation First, Then Compare Features For Cost
In summary, here are the action points to make a wise heating and AC system purchase. Each one has links for more details if you need them:

1- Choose a local service company with trained and experienced installers and technicians.  Go to this page to get more info on how to make a good choice.

2- Verify that you are getting the correct type and size of equipment for your climate, structure, and circumstances. More info here

3- Use our free cost comparison grid to compare the most important features.

4- After you have done this, you can see how brand fits into the picture.

If you find this useful, please comment so others can learn. If not, send a suggested topic and we’ll consider it.

Deciding To Repair Or Replace Your A-C System When Money Is Tight

To stay current on trends, we monitor several air-conditioning and heating industry blogs and HVAC email lists.  In them we are reading that a lot of homeowners are asking their local service company to do just the bare minimum to keep their AC or heating system running.  In recent blogs, we have written on related topics, such as:

a- Initial installation cost may not be highest cost item of owning a heating and air conditioning system over its life. It could be electricity/fuel costs or even a combination of maintenance and repair costs. 
b- Alternative sources of financing, such as a local community-chartered credit union. In those, a person does not have to work at a job related to the credit union. Rather it is based on residency or some easy-to-meet requirement.
c- $1,500 Tax credits, manufacturer or utility rebates or financing for purchasing a new a/c and heating system.

Given the current squeeze on household budgets, the request to avoid a major purchase or to minimize cash outlay is certainly understandable.   Of course, if someone is requesting the minimum repair, chances are they are not calling for service until their system fails to cool or heat properly.  However, If the system is old enough that replacement parts can no longer be sourced, or if a major component such as a heat exchanger or AC compressor has failed, even the minimum repair estimate may large enough to cause a cost/benefits dilemma with your current system.

When facing a major repair or even a modest service work on an older heating and AC system (generally, 10 years is considered old, especially in regards to efficiency), we are listing: 

Seven Useful Questions For Repair Or Replacing Your A-C Heating System

1- How long do you plan to own your home or building?
2- How much have your repair bills averaged costing over the past 1-2 years?
3- Do you believe electricity and fuel costs will tend to go down, stay the same, or go up?
4- What other repairs might you be facing in the near future, other than the issue at hand right now?
5- How much would you save on your monthly utility bills in electricity and gas costs with the new system?
6- How much are the total rebates and tax credits available on a new system?
7- How many months will it take to pay back the cost of the new AC and heating system? After that initial payback period, how much will I get in return each month as a return on my investment?

If there is literally nowhere to turn for the funds to give you a choice, then you may only have to keep your cash outlay as low as possible. However, if you do have choices, making the decision to go with more efficient equipment could pay a monetary return of and on  your investment.  Your local HVAC service company should be able to answer questions 4, 5, 6, and 7.  With these, you should then be able to make a well informed decision.  We welcome your comments and experiences.


Comparison of repair vs. replace A/C and heating calculators

In this post, we compare three calculators or decision tools for the cost of replacing vs. repairing your HVAC equipment. Since the approach of each of these resources is different, you might try two or three of them to get a broader perspective of costs.

In projections such as these, there is no way to avoid variables in the future, such as repair bills resulting from keeping an older HVAC system going, the price of fuels or utilities, and how hot or cold it’s going to be over time. Therefore, any calculator must make assumptions, standardize or have you project some of the variables.

A quick bit of advice on browsers and online tools in general: if a tool or form such as a cost calculator does not work using one browser, before giving up, try another one. Example: if you are using Mozilla Firefox and an online tool does not seem to work correctly, copy and paste the address into Internet Explorer and see if it works there.

Energy Star Checklist

Rather than making cost projections and entering numbers in a calculator, the approach this government website takes starts with a quick question and answer format. If you have taken the time to gather 12 months of utility bills, at the bottom of the page, there is a link to calculator called the Energy Star Home Energy Yardstick.

Calculator From Service Experts

In the text, it says that if your system was installed before 2000, that you might want to consider replacing it based on age and energy bill savings based on across-the-board improvements in efficiency. This tool, built within the graphics of a thermostat, has a pull down to select the state in which you live. The national average is the default. It calculates savings over 5 years.

Calculator From Aire Serv

This calculator displays one field at a time. After you enter a number in the field and click on the word “tab”, it moves to the next field and saves the previous information. There are a total of 7 fields done in 3 entries. At the end, you can change one variable and recalculate cost or savings without having to enter all data again. Assuming you have already have data such as your utility costs handy, entering the numbers only takes a few minutes.

A couple of parting thoughts
Comparison tools like the three above are merely a starting point. If you select a thorough local HVAC company, they will have actual measuring devices and more sophisticated calculations that take into account your home and its “envelope” (interface with outside air). On-site price quotes for new systems are generally no cost. Also, some utility companies sponsor free energy audits. If you live in one of the cities in the right column of our website home page, on that page there will be a link to some of these programs.

Prices for A/C and heating repair labor, parts and utilities tend to go up rather than down. If using historical numbers, where this has not been factored in, keep it in mind.

How much does a new A/C and heating system REALLY cost?

Often, when looking at buying a new central A/C and heating system, prospective owners tend to focus primarily on the initial cost. With the rising costs of everything from food to fuel putting a big squeeze on all our pocketbooks, most of us have to pay attention to make sure we have more funds coming in every month than going out.

The fact that our website has a cost comparison grid might reinforce the natural tendency of our readers to focus too much on the initial cost. I recently read a really good article that reminded me of the following:

A lot more goes into the ongoing cost of AC system ownership than initial cost – there are really four parts to the total cost picture.

Approached in a different sequence than normal, those four parts are:

  • Monthly energy costs in utility bills
  • Maintenance and repair
  • Eventual replacement cost (10 or more years, historically)
  • Initial cost of the system and installation

Before going further, let’s take out the biggest variable of all, which is the quality of the installation of your new equipment. In HVAC circles, it is often said that a skilled technician can make even a lousy AC system cool your place, while an inexperienced technician might not be able to make the best AC system cool at all. So for this article, we’ll assume that whatever system you choose will be professionally installed and equally well. Of course, this includes the having the correct size and type equipment for your home or building. This leaves the four costs above to consider:

Monthly energy costs in utility bills
Other factors kept equal, energy efficiency of the new equipment is the primary driver of monthly energy cost. Of course, more efficient equipment costs more. It usually has more features, such as variable speed blowers, more copper, and more sophisticated controls. If the electricity and gas portion of your utility bill for heating and cooling only total $60 /month, this could be the largest part of your eventual and total cost of owning your new A/C and heating system. So, higher efficiency costs more up front, but will pay back a part of the extra cost each month in lower bills.

Maintenance and repair
As covered in our blog last month, regular maintenance will pay for itself in lower repair costs and more efficient operation. Don’t skimp on it. You should select a local company you trust and ask for their candid input on which equipment will have the lowest maintenance cost and factor that in. In the HVAC trade journals, I see a trend of manufacturers offering up to 10-year warranties on major components to the original purchaser. Ask about this and include it on your cost comparison grid.

Eventual replacement cost
Of the four parts of total cost, this one is the most subjective. Before you spend too much time on it, think about how long are you likely to stay in your current home or building. Ask your HVAC company for their opinion and what they base it on. Also, remember that if energy prices keep going up, lower efficiency equipment will reach economic obsolescence faster (and probably before the equipment wears out mechanically).

Initial Cost
Our HVAC equipment cost comparison grid helps to cut through the noise to understand the initial cost at a glance.

Taking a bit of time to go through these will help you avoid buyer’s remorse, experience more comfort indoors and save money on your monthly bill.