HVAC Efficiency by Equipment, System Upgrades, or Both?

June 29, 2018
A look at the pros and cons of these two approaches and consider the best options for your customers.

When offering efficiency to a customer, some contractors only focus on the efficiency gains available through custom distribution system upgrades. Other contractors offer high efficiency equipment replacement as their preferred source of efficiency. Let’s take a look at the pros and cons of these two approaches and consider the best options for your customers.

High Efficiency Equipment

Each year rated HVAC equipment efficiency improves. Millions of dollars are spent in pursuit of increasing energy efficiency ratings one or two percent at a time. This satisfies government demands for higher efficiency and increases the value of each brand in the eyes of customers seeking new or replacement equipment.

Pros: Typically, when customers evaluate equipment efficiency ratings, they see an opportunity for energy savings between 20% and 30%. They estimate how much of their utility bill goes to their heating and cooling system. Then they divide by 25% and multiply it by 12. They decide if there is a payback to offset the extra investment. If it pencils, and you’ve presented your proposal well, you have a sale.

Other customers decide on high efficiency equipment because of utility incentives, extended warranties, special financing, environmental bragging rights, or increased property value. Their decisions are based on promises of increased comfort, dehumidification, reduced operating noise, and increased capacity to improve airflow to uncomfortable rooms.

Cons: Increased cost often drives high efficiency equipment above the budget of some customers. Additional installation costs may also increase the price of the project. Because the need to replace equipment can be unexpected, money shortages may send your customers back toward less-expensive minimum efficiency equipment.

Often, consumers don’t see a return on their increased investment for high efficiency equipment because they don’t plan to be in the home or building long enough for that to happen. In tenant-occupied properties, many landlords only consider minimum efficiency. There are lower value properties that may not warrant the investment for premium equipment.

High efficiency equipment demands a stellar distribution system. Installing high efficiency equipment onto a less-than-stellar duct system can actually reduce by half the delivered heating or cooling efficiency into your customer’s home or building.

System defects such as improper sizing, poor installations, occupant use, the power provided, venting, refrigerant charge, and other factors cause this efficiency deterioration. What would your customers think if they were aware of installed HVAC system performance?

System Efficiency Upgrades

Many contractors look way beyond the box before offering solutions to their customers. The focus of their work scope is to first upgrade the distribution system performance.

Upgrades aimed at improving the installed system performance also produce energy savings in the 20% to 30% range. Customers evaluate their energy savings in the same way. This approach usually includes testing and calculations made before you provide a proposal for upgrades. This approach allows customers to see what they will receive before they make a buying decision.

Pros: Energy saving upgrades are customized for each individual installed system. Usually your customer participates with you in the testing and diagnostics and has a full understanding of the comfort, safety, and efficiency benefits they will receive.

The primary benefit of prescribed upgrades is they allow equipment to operate at the specification required by the manufacture. The equipment operates as designed and performs closer to its rated capacity and efficiency once installed.

Without field testing, system defects and their resulting degradation of HVAC system efficiency remained hidden for decades. Scoring installed system performance opens a new source of energy efficiency for you. It’s yours to offer your customer without the influence of others.

More importantly, you get to discover these energy losses and help your customers see them on their systems. Your customer decides on the custom repairs they want and that match their needs and budgets. Even better is the lack of competition for this work. Many contractors are unwilling to do more than change the equipment. 

This type of work has low costs and high margins. Custom products carry that benefit. Your customers will pay the added cost because of the value and the verification that they received what you promised. If not, your job is incomplete.

Cons: To accurately test, calculate and diagnose these energy savings issues requires a change in the way you do business. There is a cost to get the needed training and test instruments. New skills are necessary, and your entire sales approach will need an adjustment.

Sales calls will require more from you than pricing a replacement. Additional work and creativity is also needed. Most believe the reward is more than worth it.

Another challenge is that, of all the prospective bidders, you may be the only contractor or technician offering efficiency improvement outside the equipment.

Equipment Replacement and System Efficiency Upgrades

The obvious conclusion to this article is not to choose between new equipment or custom energy upgrades. The preferred option is to replace existing equipment with high efficiency equipment AND provide installed system energy upgrades to allow the promised efficiency to be delivered to customers.

Rob “Doc” Falke serves the industry as president of National Comfort Institute, Inc., an HVAC-based training company and membership organization. If you're an HVAC contractor or technician interested in a free test procedure describing simple testing you can do on a sales visit, contact Doc at [email protected] or call him at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles, and downloads.

About the Author

Rob 'Doc' Falke | President

Rob “Doc” Falke serves the industry as president of National Comfort Institute an HVAC-based training company and membership organization. If you're an HVAC contractor or technician  interested in a building pressure measurement procedure, contact Doc at [email protected]  or call him at 800-633-7058. Go to NCI’s website at NationalComfortInstitute.com for free information, articles and downloads.