How to save money on an HVAC system

Because homeowners spend, on average, 50% of their utility bills on cooling and heating, it’s important to have efficient systems in place for both. For cooling, older air conditioning systems are usually inefficient, which leads to higher energy bills.

Keep in mind that you’ve already made a smart choice by having an HVAC system, as there are many advantages to having a system rather than using individual air conditioning units. The major benefits are:

  • They are energy efficient and provide better airflow through the premises.
  • They are less noisy than older air conditioning units.
  • Because they’re less bulky, they can be positioned out of the way
  • They are controlled by thermostats
  • Ductwork can be shared with heating system ducts

 Whether you need to buy a new HVAC system or replace your old one, though, you are looking at a major household expense. Costs range from $2000 to $12,000 and upwards, depending upon SEER (energy efficiency) rating and options. The average cost, including installation, is $5,250. Investing in an HVAC system can eat up your savings or require financing. Though heating, cooling, and ventilation are all necessities, there are things you can do to save what could be a significant amount of a new system or replacement costs.


Types of Central Air Conditioners

The two main types of central air conditioning units are:

  • Packaged unit – With this type of central air, the compressor, evaporator, and condenser are located outdoors. Installation is easier, and the unit doesn’t use up any indoor space
  • Split system – Unlike the packaged unit, only the compressor and condenser are located outdoors, while the evaporator is installed indoors. Split system central air conditioners are very energy efficient, with SEER ratings between 13 and 23.


We’ve already discussed how a new system can be a significant investment, so here are a few ways you can save:

Check product reviews

If you’re wondering if the brand name products are the best out there, you can check online reviews from Consumer Reports, Angie’s List, and other reliable websites to inform yourself before deciding on a unit. Doing some research upfront should lessen the chance of paying more for repair costs and maintenance check-ups later.

Check contractor reviews

It’s also a good practice to check Better Business Bureau ratings before picking a contractor. You can also check Yelp or Angie’s List for reviews, which might lead you to cross some contractors off your list or be reassured about your choices, depending on their reviews.  Keep in mind that what looks like a great deal may cost you more down the line.  

Consider the installation cost

There are two costs when you replace or install a new air conditioning unit: the price of the unit, and the price of the installation.

Though you might be able to save money by comparison shopping for your A/C unit, it never makes sense to skimp on your installation costs. A high-quality, professional installation can make certain that the air conditioner is well-suited for your home before all the hard work is done.

Think about size

Many factors should be considered before choosing an air conditioner. These include how many floors or levels your home has, the square footage, and the amount of insulation.

A too-large unit will cycle on and off frequently, which wastes money on your energy bill. A too-small unit won’t be able to cool your entire home on the hottest days.

Ask for the warranty

According to HomeAdvisor, “any newly installed air conditioning unit will come with a manufacturer’s warranty.” Warranties differ depending on the manufacturer: they range anywhere from 5 to 15 years, with 10 years being typical warranty length. Your warranty will cover unit parts of the A/C unit and parts associated with the HVAC system.

The labor for A/C unit repair and additional work will also be covered If you choose to invest in a contractor’s warranty. Extended warranties, while usually more expensive than regularly scheduled maintenance visits, cover the cost of replacement parts and repairs by a third party. They usually have strict guidelines.

Look for rebates

Many states and HVAC manufacturers offer rebates to help offset the cost of a brand-new system, particularly those that are higher efficiency. Some states have hundreds of opportunities for tax credits, incentives and grant money, as well as loans, subject to approval. DSIRE, or the Database of State Incentives for Renewables & Efficiency®, is the best resource for information on incentives and policies that support renewables and energy efficiency in the United States. Keep in mind that purchasing a new HVAC system can also save you money through tax deductions.

Don’t jump at the first estimate or the lowest price

It’s never a good idea to take the first estimate. A large household expense like an HVAC system merits more careful consideration.  Consumers need to think about the long-term–the 12 to 15 years that the unit should last–when purchasing a new air conditioning unit. A high-efficiency system that adds an extra $800 to your costs could save you $300 a year on energy bills.

Other Ways a New Air Conditioning System Can Save You Money

A new air conditioning system can save you money in other ways. These include:

  • Lower maintenance costs – Because newer air conditioning units are better constructed than their older counterparts, they wear better and will need less maintenance.
  • Control system – If you opt for control strategies in your unit, the system will activate only within the parameters you choose and otherwise be idle, which will lower costs.

Another advantage to installing a new system or replacing your existing one is that today’s air conditioners use Puron which–unlike Freon–is energy efficient and environmentally friendly.