What Are the Expected Upfront Costs of Having an HVAC Technician Replace a Building's HVAC System?

HVAC technician repairing an HVAC's system

When it comes time to replace or repair a building's heating, ventilation and air conditioning (HVAC) system, one of the foremost business concerns is the upfront costs of the project. Fortunately, available rebates and incentives and several energy- and cost-efficient equipment options can make the initial investment one that pays off in the long term.

Business owners and managers can also maximize their investment in a new commercial HVAC system by working with a technician. Qualified HVAC contractors can put their experience and knowledge to work and guide a business to successful and energy-efficient system completion.

Consider the repair and replacement indicators
There are times when a business owner or manager's HVAC system concerns can be alleviated with rather simple repairs at a lesser expense. However, if a building's HVAC system has been plagued by problems for months or even years, it is likely that a full HVAC replacement is necessary. That is especially true if the system is more than 10 years old. In fact, the general industry rule is to replace heat pumps and air conditioners every 10 years, and to replace furnaces and boilers after 15 years.1

In either event, an HVAC contractor can outline key considerations in a business's building assessment to determine whether the HVAC system needs to be entirely replaced or requires a simpler repair.

Of course, there are other indicators to look for when deciding between replacement and repair, including:

  • An uncommon spike in utility bills
  • Excessive maintenance costs
  • Noisy equipment
  • Consistent difficulty controlling indoor temperatures

An HVAC contractor can be a great resource for evaluating those issues and developing a plan to tackle them.

Commercial HVAC system values
Numerous factors can contribute to the upfront costs of HVAC repair or replacement, dependent on parts such as compressors, fans or motors, and condition of the duct system. However, when HVAC replacement is the correct course of action, rebates and incentives from PG&E can help with upfront costs that can initially lead to an excellent, long-term return on investment.

The best way to evaluate the ROI on system installation is by measuring energy input/output compared to the amount of utility bills paid before and after an HVAC repair or upgrade. For example, a new air conditioning unit can reduce cooling energy costs by up to 20%.2 Compared to such savings that can be gained from replacing an HVAC system, the upfront costs can be an excellent investment.

ROI for an HVAC replacement can also be anywhere from a few months to several years, depending on the initial cost and which HVAC systems or components are replaced. Larger, more sophisticated equipment, such as central natural gas boilers or chiller plans, can cost many thousands of dollars to purchase and install. However, their lower monthly costs could be beneficial depending on a business's individual ROI preferences. Natural gas central furnaces and packaged air conditioning equipment, typically found in most small- to medium-sized businesses, are normally not as sophisticated to purchase and install as these types of larger systems. The list of energy- and cost-efficient replacement systems or additions below can be added or retrofitted to systems typically found on most SMBs.

A 2011 study conducted by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) looked at ROI for various HVAC replacement measures. It found that the average payback period was a little less than four years — and that was without accounting for initial rebates and incentives.3

The ROI on instituting energy-efficiency measures is also made greater because they can help businesses stay compliant with energy-efficiency standards or such state regulations as California's Title 24 Building Code.

HVAC system replacement equipment
The initial costs of replacing an HVAC system depend on how much of the system is being replaced and the new equipment being used in that project.

There are many energy- and cost-efficient replacement systems or additions a business owner or manager can make to those new systems. These include:

  • Split-system packaged units
  • Central natural gas furnaces
  • Variable frequency drives for HVAC fans
  • Energy recovery ventilation systems
  • Air-side economizers
  • Programmable thermostats
  • Demand or CO2 sensors

When installing new HVAC systems, businesses must also be sure to look for ENERGY STAR-certified equipment.4 These eco-friendly products not only help reduce energy consumption but can lower monthly utility bills for businesses.

Working with an HVAC technician
While upfront costs of an HVAC repair or replacement are inevitable, businesses must continue to look at the impacts that can save them more in the long term. Through the help of an HVAC contractor, business owners and managers can not only better realize this but receive expert guidance on HVAC equipment choice, proper installation techniques and rebates and incentives.

To learn more about finding and working with an HVAC contractor who can help optimize HVAC occupancy sensor use, please reference "Where's the Waste? The inside story on your HVAC system" eBook from PG&E. The eBook will help businesses take the initial steps necessary to ensure the long-term health and efficiency of any new systems and equipment.

Referenced in article:

  2. U.S. Small Business Administration