Why Does HVAC Installation Cost So Much? - An Expert's Perspective

The cost of an HVAC job can vary greatly depending on a variety of factors such as materials needed, complexity of project, size of area/system being repaired & type of equipment used.

Why Does HVAC Installation Cost So Much? - An Expert's Perspective

The cost of an HVAC job can vary greatly depending on a variety of factors, such as the materials needed, the complexity of the project, the size of the area or system being repaired, the type of equipment used, and more. All of these elements determine how long the installation will last and therefore affect the total cost incurred by customers. Demand for air conditioning parts, new units, and repairs tends to increase when the climate warms up, and our industry is used to receiving price increases from manufacturers every year. However, this year, the COVID-19 pandemic has created a perfect storm that is making HVAC parts and equipment more expensive than usual this time of year.

The pandemic has reduced the supply of raw materials and created labor shortages in the factories that manufacture the parts and equipment we need. Here's what you should know about the many factors contributing to rising HVAC replacement and repair costs this summer. The cost of diesel has been high, meaning it takes more fuel to get our HVAC truck to your location to repair or replace your air conditioner. We stock our trucks with as many HVAC consumable parts, tools, and supplies as we can to facilitate repairs. Larger vehicles are needed to transport HVAC units and supplies when they need to be replaced.

Diesel vehicles allow us to carry more weight with better fuel consumption, and our trucks can also stay in service longer. Some HVAC companies may begin to reduce the size of their service areas. It can also mean that travel rates go up. The raw materials used to make HVAC parts and equipment are in short supply and are also becoming more expensive. The Bureau of Labor Statistics monitors the prices of products manufactured in the United States by month, so you can see average prices as they change over time.

The NASDAQ also documents commodity prices and you can see the upward trend in prices over the past year. Another way we can know that prices are high is when we recycle used HVAC equipment parts. Demand during the pandemic was low because factories were not operating at their maximum capacity, meaning that prices were low. That has changed over the past few months. Fortunately, healthy air conditioning systems shouldn't need additional refrigerant. This is why a fully loaded system should not need to be “refilled”.

If so, it means you have a leak, which needs to be repaired. Semiconductor chips are found within highest-efficiency HVAC systems, such as variable speed HVAC units, multi-speed central air units, heat pumps, and minisplits. Consumers love them because they are efficient, quiet and increase interior comfort. However, Newsweek reports that the shortage of chips is affecting the manufacture of new cars, smartphones and computers. They also expect the chip shortage to spread to HVAC systems.

This means that we could see a lower supply of high-end, optimally efficient HVAC units and parts. PC boards, the minicomputers that make them so efficient, can be harder to get and more expensive if you need a repair or replacement. Labor shortages due to the pandemic have added to delays and equipment shortages. That's why when you look at the US Bureau of Labor Statistics Producer Price Index (PPI) for HVAC equipment going up (as shown in the chart below), HVAC service companies and consumers can also expect higher prices on air conditioners, heat pumps and parts. The “producer price index” measures the average change over time in the sales prices received by domestic producers of goods and services. Staying informed allows customers to better understand why supplies of air conditioners and heat pump parts may be limited and why prices are higher than usual this time of year. A variety of factors - not just warm climate - are contributing to increased demand and decreased supply of HVAC equipment. The inflation rate is trending higher than it has been for some time according to government statistics.

This means that the value of a dollar is lower meaning that a consumer may have to pay more for the same item. Understanding all market forces at play can help you plan ahead and be patient if searching for an air conditioner repair part takes longer than usual. Homeowners who know their air conditioner may not last during summer or fall may start thinking about changing it now so they have more time to decide what type of system they want and what features are essential. Most people keep a central air conditioner for 12-17 years so it's worth buying what you want as you might have it for a long time. Starting the HVAC replacement process before it's an emergency gives you additional time to make a decision and if you want explore funding. Facing an expensive repair or replacement when temperatures reach 80-90 degrees or higher isn't ideal. Starting that process earlier puts you in driver's seat and can reduce stress for everyone involved.

An air conditioner breakdown when it's hot can be stressful. That's why we advocate regular maintenance and keeping abreast of market conditions. This gives savvy customers options to stay comfortable in hot weather. Save money on a new Ruud air conditioning and heating system for your home or business. We offer expert and reliable air conditioning and heating repair, installation and consulting services to keep you comfortable all year round. We do visits to homes and businesses in West Houston, Katy, Sugar Land, Richmond, Katy, Richmond, Richmond, Fulshear and more. I understand running a business costs money - tools having employees - but profit margin seems very exaggerated from what I can see surely installers aren't making much money with these facilities.

Vincent Tuman
Vincent Tuman

Proud troublemaker. General zombie practitioner. Gamer. Infuriatingly humble bacon ninja. Proud thinker. Incurable food lover.

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