Home HVAC (heating, ventilation, air conditioning) systems in most climates will be a large user of energy. In hot climates, it can represent 60% or more of your total electric bill. If your system is ten years old or older, it’s a prime candidate for an upgrade. Air conditioning systems are SEER (Seasonal Energy Efficiency Ratio) rated. This is kind of like a car MPG rating. The higher the number, the higher the energy efficiency and the less energy you will consume per amount of cooling compared to a system with a lower SEER rating. A system 10 years old or older was likely rated at 10 SEER or less when new. As they age, they can lose efficiency due to compression loss and heat transfer restrictions, such as a dirty or damaged coil. If you have an older unit that needs repairs, you may be tempted to spend the few hundred or thousand dollars it takes to get it up and running instead of the thousands it would take to replace it with a high-efficiency system. Repairs can often be the best alternative on a tight budget or in a case where you don’t plan on staying in the house long enough to get a ROI (return on investment) from the new system.
But in the long run it can cost more to repair an old drive than to replace it. If you have an average 2,000 square foot home with a 4 ton AC unit, it could cost around $5,000.00 to replace give or take a thousand depending on the grade of the equipment and everything that goes into the installation. If this hypothetical system needs repairs in the typical $600-$1,000.00 range, it might seem like you save about $4000.00 by repairing instead of replacing. But you need to factor in the cost of operation and future repair and maintenance to get a true cost comparison. If your system is starting to need repairs in that price range, chances are good that year after year it will need even more repairs as it ages. If you add coolant because of a leak and don’t fix the leak, you’re guaranteed at least one, but probably several service calls a year to keep it cool. Finding and repairing small, tiny leaks in the coil can also be costly. Repairing coil leaks can be very difficult. When the coil starts to leak, there are likely to be many small leaks in the pipe where the fin contacts the pipe. This is due to electrolysis caused by the contact of two dissimilar metals and the presence of VOCs (Volatile Organic Compounds) that have condensed on the coil which contribute to the formation of these small holes. Repairing them is a complicated process and can result in less than desired results. Repairing one leak can open another nearby. Even if it is successful, the efficiency of the system can never go back to its original low 10 SEER rating, let alone improve on it. Charging a leaking system to “get by” also contributes to the cost of operating that system. You have the service costs plus the increased operating cost as the system loses refrigerant and becomes less and less efficient.
So let’s take a look at the $5,000.00 the system pays to maintain its old system for a period of just five years. From the beginning, we already know that it will cost around $1,000.00 to get the system running even at a low efficiency level. So now we are down to $4,000.00. Now let’s say you average a very modest projected maintenance and service cost of $350.00 for years 2 through 5. Now that new system is costing you only $2,600.00. Most systems will have a 10-year parts warranty, so even if something were to fail, at least the parts would be covered. Labor for repairs on the new system will be at least 1 year and up to 10 years can be added for around $500.00 on most systems.
We haven’t even talked about energy cost savings yet. According to operating cost comparison software, using 0.11 cents per kilowatt hour and a modest rate increase of 3% per year, you would save $2,092.00 in air conditioning costs by upgrading to an Energy Star 14 SEER system from an existing system. of 10 SEER. And this is assuming your 10 SEER system is still running at 10 SEER. I can say that it won’t. Savings will vary.
According to the same cost comparison software, government studies have also shown an increase in home value of around $7,800.00 when doing this upgrade. When we extend the time frame to the expected average system life to 20 years, your savings exceed $10,000 in operating costs.
Therefore, waiting until the old system fails completely to replace it can cost you much more in energy and comfort costs than replacing it now.