HVAC equipment cost increases mean it’s time to repair or replace heating and cooling systems

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It’s been more than a year since many businesses have come back to work in-person in office environments. Now it’s time to ask a crucial question: have office owners and operators had heating and cooling systems serviced since then? While semi-annual upkeep is recommended all the time–whether systems are in heavy use or not–this year that service call is especially important. That’s because prices for heating, ventilation and air conditioning (HVAC) services are about to increase between 15 and 30 percent in Indiana and beyond.

The cause for the increase is two-fold. Not only is the industry still experiencing crippling supply chain shortages that mean supplies are often hard to come by, but new federal regulations will also go into effect in January 2023 that require increased minimum efficiency standards for heat pumps and air conditioners. Additionally, furnaces and air handlers are being redesigned to meet the new changes, which could mean more extensive updates are needed for some people.

The New SEER2 Regulations

According to the U.S. Energy Information Administration, on January 1, 2023, the federal minimum will increase by 1 SEER for all across the United States, for both AC units and heat pumps. This includes central air conditioners, as well as split systems like ductless mini splits. 

While these numbers may not mean much to you, they mean a great deal to equipment manufacturers and installers, which risk penalty if caught installing systems that do not meet the standards after the first of the year.

*Source https://seer2.com

The new standards apply to AC units and heat pumps manufactured after December 31, 2022, so existing appliances aren’t covered. However, consumers and contractors looking to install a new air conditioner, heat pump, or any of the appliances mentioned above next year will have to abide by the new minimum SEER2 ratings.

New SEER2 testing procedures for manufacturers as mandated by the Department of Energy will more accurately reflect current field conditions of equipment in use, thus keeping HVAC systems lasting longer to match these new efficiency standards.

While the new standards do mean a price increase on many new systems, they also come with an environmental efficiency benefit that is great for the planet, and potentially good for energy bill costs. The Department of Energy estimated the new standards could collectively save U.S. households between $2.5 billion and $12.2 billion on energy bills in the 30-year period after the new standards are implemented. Whether or not there will be cost savings–and if there is, how much it will be– will be dependent on the size of the space where the system runs and what kind of unit was previously used. 

These regulations vary by region, but Indiana is one of the states affected. In our region, any unit manufactured before January 1, 2023 can still be installed after January 1, but nothing with outdated standards can be produced after that date. Meeting the increased standards means total costs will be up to 30 percent more on new HVAC equipment in the coming year. 

Of note: the price increase will most deeply affect the cost of entry-level units, as some of the more expensive units sold were already meeting the new standards.

For office owners and homeowners that think a new heat pump or air conditioner may be needed soon, it may make sense to move forward on a replacement before the end of the year, to save money before the price increases. 

Analyzing Your Units at Home and the Office

Not all HVAC companies service corporate offices, so that makes scheduling an appointment as soon as possible crucial if you want to potentially save before the 2023 regulation changes. It’s important for homeowners too, as many people have already scheduled their regular system maintenance appointments before winter’s chill. Keep in mind new systems must be installed, not just purchased, before January 1 if the new units do not meet the new standard requirements.

Here are some of the signs that a heat pump or air conditioner may be experiencing an issue that needs to be addressed.

Air Conditioners

Chances are the AC hasn’t been turned on in about a month. Think back to summer and ask yourself these questions:

• Did the AC do a good job keeping the building/house cool?
• Did you have your AC serviced by a technician?
• Did the temperature on the thermostat seem to be accurate?
• Has it been less than 10 years since the unit was installed? 
• Have your energy bills remained relatively stagnant year-over-year?

If you answered “no” to any of these questions, it’s probably a good idea to call a professional HVAC company. Also consider whether the air conditioner put out a foul smell or made strange noises; both of those could be symptoms of issues.

Heat Pumps

Heat pumps generally last about 12 years, so regular maintenance is key to getting every possible year out of the system. Things to look for that may be indicative of an issue on a heat pump include:

• Not getting cool or hot enough air
• Higher energy costs
• Water leaks
• Unit not turning on
• Air taking too long to get cool or warm
• Foul odor

Prepare for SEER2 Now and Save

Regular maintenance on HVAC equipment is imperative whether a new system is an expected upcoming cost or not. Getting the most life out of a system should be the contractor’s top priority, but if a new system is needed, consider these new regulations, the up-front added cost they bring after the new year, and potential lower monthly operating cost they could bring, and give a certified heating and air conditioning technician a call to discuss.

Greg Wells is the president of MAX Service Group which operates Williams Comfort Air and Mr. Plumber in central Indiana, Thomas & Galbraith Heating, Cooling & Plumbing in southwestern Ohio, Buckeye Heating, Cooling & Plumbing in greater Columbus, Ohio and Jarboe’s Heating, Cooling & Plumbing in greater Louisville, Kentucky.