When Does It Make Sense to Go with an Energy-Efficient HVAC System?

The energy efficiency of your home doesn’t just affect the environment; it could also impact your checkbook. Continuing to heat and cool your property with faulty or deteriorating HVAC technology results in wasted energy that may cost you hundreds of dollars a year.

96 million homes in the United States are more than twenty years old, and 82 million homes are over thirty years old.  When was the last time your home had an HVAC upgrade?  If you want to save money on your utility bills and reduce your environmental footprint, an energy-efficient HVAC system is a wise investment.

What is an ‘Energy-Efficient’ HVAC system?

An ideal energy-efficient HVAC system utilizes the minimum amount of energy needed to regulate your home’s indoor temperature throughout the year.  The United States government developed a standard of measurement to precisely determine the energy efficiency of an HVAC unit: the SEER (Seasonal Energy Efficiency Rating).  Higher ratings mean that your HVAC system will operate more efficiently and save you more money.

The SEER was designed to educate consumers on the energy consumption – and therefore, the long-term cost – of their HVAC system.  For example, the website for the U.S. Department of Energy states that homeowners can save up to forty percent on cooling costs by replacing an older air conditioner with a model that has a higher SEER.  As the long-term financial benefits of energy efficiency have become better understood, HVAC manufacturers have incorporated energy efficiency in their HVAC systems. Newer HVAC units are thus much more efficient that older technologies.

If your current HVAC unit is in disrepair, just replacing a heat pump or valve may seem like a smart financial decision, but it’s only a matter of time until your entire system fails.  When your system does fail, you’d have already spent money replacing the broken HVAC component, and spent more on your monthly utility bills (since your outdated technology uses more energy). For all but the newest HVAC units, replacing a broken component will cost you more in the long run than replacing your old unit with an energy efficient one.

Incentives for Energy Efficiency Heating and Cooling Systems

There are many energy-efficient incentives to help homeowners replace their conventional HVAC technology with environmentally-friendly, cost-saving systems.  The Database of State Incentives for Renewables & Efficiency (DSIRE) features a list of options for all fifty states.  California alone boasts a list of 268 incentives and policies, from federal policies available to all Americans to utility-level policies available to customers of specific electric utilities. These policies ensure that homeowners, business owners, and corporations can receive funding for their energy-efficient projects.  Examples include the Pacific Gas and Electric Company (PG&E) Residential Energy Efficiency Rebate, which offers rebates for residential customers who install energy efficient furnaces or water heaters in their homes.  The variety of loan programs, rebates, and financial incentives available makes obtaining energy-efficient funding easier than ever.

Is an Energy-Efficient HVAC System Worth it?

If you’re worried about the upfront cost of a new energy-efficient HVAC system, let’s look at a sample payback on an energy-efficient HVAC system. Payback measures how long it takes to recoup the difference in cost between an energy-efficient HVAC system and a conventional system through energy bill savings.  The Energy Star program features a list of “rapid-payback” upgrades for appliances, lighting, business equipment, and heating and cooling.  Thanks to the decreased maintenance and lower energy costs of your energy-efficient upgrade, you may only have to wait a few years before an energy-efficient HVAC system pays for itself.

To figure out the basic payback time for your energy-efficient HVAC product, let’s take a sample energy-efficient air conditioner that costs $2,300 and a comparable conventional air conditioner that costs $1,900. Let’s assume an expected monthly electric bill savings of $13 with the energy-efficient air conditioner. We can evaluate the payback for the energy-efficient model by dividing the difference in upfront costs of the two air conditioners by the expected monthly savings.

($2,300 – $1,900) / ($13/month) = 31 months

This calculation reveals a payback period of less than three years. This means that a homeowner who buys the energy-efficient HVAC system will recover the additional upfront cost of an energy-efficient system compared to a conventional system in less than three years. Additionally, the homeowner will still save $13 each month on the electric bill after the paying off the difference in upfront costs of the two air conditioners. $13 per month may not seem like a lot, but over the 20 year lifetime of an HVAC system, that’s $3,120! An energy-efficient HVAC can pay for itself and then some.

PowerScout provides a multitude of tools to assist consumers in with their smart home improvement needs, including competing quotes from multiple local contractors, zero-down financing, and a concierge team of experts to answer questions.  PowerScout’s free savings tools allow you to immediately determine whether your home is suitable for different smart home improvement projects, and the potential savings you’ll receive from smart home upgrades.

Save money and help the environment by making your home smarter and more sustainable. Begin your energy-efficiency journey with a free PowerScout Solar Savings Report by clicking here.