As I mentioned in my homeownership and priorities post, one housing project that we wanted to tackle sooner rather than later was replacing our HVAC unit. Within months of moving into our new house, we had to shell out a thousand bucks to repair our 20-plus-year-old HVAC unit when it broke on a 108-degree day. While we haven’t had a problem since (knock on wood), the fellow who came out to fix the problem for us gave us a ballpark estimate of $7,000 for a new unit.
Since we had just paid about 15 percent of that amount for a single repair, the peace of mind associated with having a new unit that would hopefully be problem-free (for several years, at least) sounded like a bargain to us.
We held off for a few months because we thought we might get solar panels and do everything at once. But it turned out that the financial benefits of solar panels were not significant enough for us to pull the trigger on that in the near future.
So we went back to our original plan of simply getting a new HVAC. We had been setting money aside ever since our original repair and with over $23,000 in our online savings account as of my 2014 update and 2015 goals post, we were ready to pull the trigger. Then I got an email from our utility company about their Cool Cash rebate program.
Essentially, if we went through this program, we could receive a rebate of up to $400 directly from our utility if we installed a unit that met their efficiency criteria. Bonus: The utility would refer us to a contractor that met the standards of the Electric League of Arizona, a statewide non-profit trade association dedicated to quality contractor referrals, consumer advocacy, and efficient use of electric energy.
Getting the estimate, Part I: tonnage required
When I called the utility’s referral service, the representative asked some questions to verify our eligibility for the program and submitted the referral request. Within 15 minutes, I received a call from a local, family-owned HVAC company. They were able to set up a time the very next day to assess our home and provide an estimate. (Ha! They’re not super busy this time of year.) Twenty minutes later, I received a follow-up call from the utility company to verify that the HVAC company had, in fact, contacted me.
When the contractor came out, he initially told us we would likely need a 4-ton unit.
Note: This is not how much the unit weighs! The tonnage of an air conditioner refers how many British thermal units (BTUs) of heat the unit can remove from your home per hour. The term comes from how long it takes to melt a ton of ice, since that is how buildings were cooled before air conditioners were invented. A 1-ton unit removes 12,000 BTUs of heat per hour and would melt one ton of ice in a day, assuming the ice melted uniformly.
In terms of tonnage, buying a unit that is too small won’t cool your home efficiently. Buying a unit that is too large means spending more money for something you don’t need. After crunching all the numbers, our contractor returned the next week with the good news that we only needed a 3.5-ton unit.
According to the measurements the contractor took, our system needed the capacity to remove just under 39,000 BTUs per hour. A 3-ton unit would remove 36,000 BTUs, not quite enough. A 4-ton unit would remove 48,000 BTUs, a waste of money given our needs. A 3.5-ton unit would remove 42,000 BTUs, a comfortable buffer. Since a 4-ton unit would cost about $6,000 and a 3.5-ton unit would cost about $5,500, we saved about $500 simply by buying the appropriately-sized unit.
Getting the estimate, Part II: SEER rating
The next number to consider is the unit’s SEER rating. SEER stands for Seasonal Energy Efficiency Ratio. SEER is calculated as the ratio of cooling in British thermal units (BTU) to the energy consumed in watt-hours. Basically, the higher the SEER rating, the more efficient the unit. We wanted the most energy-efficient unit they offered for a variety of reasons:
Lower monthly bills (during the months we run our air conditioner)
Higher potential resale value
Using less energy is better for the environment
The highest SEER rating available included a 10-year parts and labor warranty at no additional cost
The highest SEER rating available through this contractor was 15, so that’s what we chose. The total cost of the install was $5,536 and that price includes:
The new unit
Removal and disposal of the old unit
Installation of the new unit
A new stand for the unit (the old one was the wrong size)
Modification of the existing elbow (the part that connects your unit to your ductwork)
A new filter grill (since the old one had openings that were spaced too close together)
A new thermostat
The aforementioned 10-year parts and labor warranty (which is through the manufacturer, so any company who services our air conditioner brand will honor it)
Selecting the 15 SEER rating qualified us for a $200 rebate from our utility company and would provide an estimated savings of 33 percent on the portion of our electric bill attributable to running the unit. A 14 SEER unit, the next step down, would provide an estimated savings of 29 percent and be about $1,200 cheaper, but it would not come with a 10-year warranty and it wasn’t eligible for a rebate. In addition, choosing the unit that was eligible for the rebate meant that our utility would continue to monitor our interactions with the contractor — good for added peace of mind.
Next, we did some comparison-shopping to make sure we weren’t paying too much. The home improvement stores sell HVAC systems and have installation programs, but didn’t carry 3.5-ton systems with the SEER rating we were interested to buy. As a result, we would either have to buy a less efficient unit for about the same price or pay more for a 4-ton system, which didn’t appeal to us. Research on other independent contractors didn’t result in a significant price difference, and we were also able to verify that the cost we were quoted was average for our area.
We have picked a date and are now awaiting install! Part II will talk about the installation process, the rebate process, and what time of year is best to replace an HVAC unit and why. In the meantime, comments and questions are welcome below!