Buying a New HVAC System
Critically Thinking about a major homeowner expense
One of the reasons I was able to retire at age 34 — and to be able to enjoy a comfortable living since that time — is that I pay attention to expenditures. These range from groceries to income taxes. Today I’ll explain some ins-and-outs of buying a replacement HVAC system, which typically runs $10,000 to $20,000 — but (based on certain variables) can be much more. I’m of the vintage where such an expenditure is still a big deal.
HVAC (Heating, Ventilation, and Air Conditioning) is a common electric system used to control the temperature, humidity, and air quality in a home. Most HVAC systems are two parts: 1) an outside compressor, and 2) an inside air handler. The air handler is connected to supply ductwork (typically one or more in each room), plus return ductwork (which brings air from 3± selected places in the home that need to be “conditioned”: warmed or cooled).
The basic principle of a HVAC system is that it extracts heat from the inside air in the Summer (providing cooling), and it extracts heat from the outside air in Winter, sending warm air throughout the house.
My example (below) is about: a) an electric replacement system [not the first HVAC for a property], b) a home [not a business], c) just one system [multi-story homes can have one system per floor], and d) installed in North Carolina [different geographical areas can have some variables].
Just like I would do on any larger purchase, I keep track of everything on my computer (NOT phone). I set up a “New 2025 HVAC” folder. In that I have subfolders for each local company providing me a quote. I also have subfolders for other related materials, like IRS HVAC tax credits.
I then put together an Excel spreadsheet (in this folder) to record the main details for multiple expected quotes. I then carefully select several apparently competent providers to get quotes from. On the form, I keep track of several important variables in columns: a) company name, b) website, c) location, d) phone, e) visit date, f) brand quoted, g) cost, h) plus several more.
Hint: below the table section of the spreadsheet, leave several lines for making notes — e.g., explaining what abbreviated column headings mean. Yes, it takes some time to put this together properly, but it is an ESSENTIAL step!
The first part of my making a purchase decision involves the interface with a local HVAC company. These included such things as: a) their website, b) the person answering the phone [vs an answering machine], c) the ease of setting up an appointment, d) the timeliness of the estimator person, e) the thoroughness of the estimator, f) how well the estimator answered my questions, g) did they have a business card, h) the quality of the quote I received, etc. I gave each company a grade on my Excel spreadsheet. This comes into play when deciding between two companies that have given me roughly equal quotes. After all I will be dealing with these people for 10+ years.
With each local company, ask for written quotes for at least two (2) options: a good system and a higher efficiency one. Have these emailed to your computer. The higher efficiency version should save you electricity costs over its lifetime (15± years). Another benefit of the higher efficiency unit is that it may qualify for IRS (and maybe State) credits. However, the higher efficiency (more expensive) unit is not necessarily more reliable…
Once you get written quotes, you will start encountering terminology and practices that you need to understand somewhat, or you may be taken advantage of. Here are some factors that will likely come up:
1 - A quoted system will be something like “3 Tons.” As explained here, that has nothing to do with weight, but rather the cooling capacity of the system. [In a replacement situation, estimators will likely quote you the same capacity you already have. Make sure the prior system did an acceptable job!]
2 - On colder days (well below freezing), there isn’t much heat in the air to be extracted, so the HVAC system provides auxiliary electric heat. Usually, an HVAC system will have something like 10 kW — but be sure to ask. This is like having an electric space heater, which is more expensive to operate.
3 - SEER2 ratings are the current measurement of how efficient an HVAC system is, the higher the better. Good systems are 14± while high efficiency systems are 18+.
4 - New HVAC circuit breaker box and wiring (aka Whip). The company will likely say that this is needed “per code,” which is rarely the case. This is another advantage of getting multiple written quotes — if only one bidder says it’s needed, it is almost certainly unnecessary.
5 - New platform for the outside compressor unit. Again, if what you have seems solid, this is likely an arbitrary option that you should decline. [One exception is if your NFIP flood zone rating has changed, the platform may have to be raised to conform with your current rating.]
6 - Ultraviolet air treatment. This is rarely quoted, but it is a proven way to minimize airborne bacteria, viruses, and other microorganisms that can cause health problems, etc. in your home. It also helps prevent the growth of mold and mildew in HVAC systems. Here is an article about this. This is a UV unit I bought to install, so use that as a reference for cost.
7 - Surge protector. This is also rarely quoted, but it is a wise idea to have one, as nearby lightning strikes, etc, can easily fry very expensive HVAC electronics. Here is one I bought and installed myself. Compare that cost to what you are quoted for someone else to purchase and install.
8 - Thermostat. If this is included, get the price if it is not itemized. With a Trane HVAC I was quoted, it included a fancy Trane thermostat for $460. You can get a high-end thermostat for under $200 (e.g., see here).
9 - Warranties are typically 1 year labor, 10-year limited warranty on parts. That said, carefully read the quotes for gotchas.
10-Service costs. These are not usually on a quote, so you should ask: if I need service, what is your hourly rate? There can be big differences here. Also, some local companies will offer a special rate for new customers, or if you buy an annual service contract.
11-Credit card fees. When you get a quote, ask if: a) there is a charge for using a credit card, and b) is there a discount for paying by check? In my case, one supplier offered a 3% discount for paying by check. That may seem small but on a $15,000 HVAC unit, that is $450.
12-Tax Credits. If you play your cards right, you may qualify for an IRS $2000 credit (MUCH more valuable than a $2000 deduction!). See here for details… Some States have additional credits (see here for NC’s). Check out the conditions for those prior to buying. Also, ask the local company you are leaning toward for info. If you press them, they might even volunteer to do some of the paperwork!
13-Baker’s Dozen Bonus. When there is a new HVAC system replacing a prior one, the party line is that they take the old one to the scrap heap. What if you have put in important parts (like the compressor) in the last year, and they work fine? That was my situation, so after I got written quotes from each potential supplier, I emailed them that question. The jury is still out if any will give me some credit for resaleable parts. In any case, I will keep some circuit boards and sell them on eBay…
Bottom Line —
I’m sharing this with you before I’ve made my selection. That said, the quotes so far range from $8,000 to $20,000 — a LARGE difference. Hopefully, you have found this semi-detailed overview of buying a replacement HVAC to be helpful. Questions or observations can be posted in the comments below.
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There's a 2nd factor besides the SEER rating that's also worth considering. It's called the Heating Season Performance Factor (HSPF). It's frequently included in the product spec sheet. SEER rates efficiency when the heat pump is in cooling mode. HSPF rates efficiency for heating. If you rely on your heat pump for heating more than cooling, this rating should also be considered.
The most interesting feature of a cooling system is what is actually providing the cooling you enjoy. It is you. This fact actually works to save you money if you understand it properly.
Humidity control is far more important than temperature. Your body releases moisture through your skin and as that moisture evaporated you feel cooler. This, you are your own cooling system and the key is to control the release of moisture.
On a hot summer day you will find yourself sweating. That is not because it is hot, it is because the humidity is high and your perspiration cannot evaporate fast enough. Case in point, go to Arizona where the humidity at the same temperature is low. You will not feel as hot because you are evaporating sweat much more efficiently.
So, in designing a home cooling system, do not go for a bigger compressor. If the peak load is 3 Tons, put in 2.5 Ton unit. On a design day the unit will run more but it will be dehumidifying the whole time. It may not be able to hold a 76 degree set point, but you will actually feel much more comfortable because the humidity will not spike up while the unit is not running. Your house sucks up moisture faster than it gains heat because insulation doesn’t control moisture movement.
I hope this helps.