Upgrading your heating & cooling system. Does it make Dollars or Sense ??

We often hear it said " if you upgrade your furnace it will pay for itself". Well I am going to contradict that myth in this post.

Most of us in our lifetime have never purchased a heating & cooling system so we rely heavily on what we have researched and what our contractor tells us. This post is designed to help you focus on all aspects of the decision making process so you can formulate the best approach for your situation.

Before we get to the numbers it is important to ask yourself these questions.

1. How long will I be in this home?
2. Do I want the lowest operating costs or lowest installation cost?
3. Is having a system that will protect the environment important to me?
4. Would I like to eliminate the noise from an outdoor air conditioner?
5. Do I plan to try and go net zero one day? (produce my own electricity)
6. Would I like to make my home safer by eliminating the risk of carbon monoxide?
7. Will my new system add resale value to my home?
8. What is my budget?
9. Do I want to pay cash or is financing an option?
10. Do I trust that my contractor has by best interest in mind?

The Numbers

If you have a gas furnace that vents out of your house with plastic piping then you have a furnace that is likely 90% efficient or better. Replacing that furnace today with a 98% efficient model will save you about 8% on your gas bill. New models will also have a more efficient fan which might result in an additional $50 / year in savings. Assuming you spend approximately $1200 per year on heating your home, the 8% gas savings & electrical savings will add up to about $146 per year. You might spend between $4000 - $6000 to install the upgraded 98% furnace. Dividing your cost by your total savings results in a payback of 27-41 years.

Given the fact that furnaces today do not have a 27-41 year life expectancy, we really can't look at this upgrade as being a great "investment".

If you are considering a Geothermal system upgrade from a gas furnace the numbers result in the a range of 20-50 year payback, depending on the method of installation for the geothermal loop.

These examples of course are just that, examples, every home has different needs, different fuel types, and most importantly different demands from the occupants.

As you can clearly see, heating and cooling system selection is not based on the savings alone and considering them as a investment in your pocket book may lead you to the wrong conclusion. All heating and cooling systems are an investment in your comfort, safety and peace of mind.

Are there exceptions to my rant? Of course. If you live in an area served by propane for example. Annual energy savings for geothermal compared to propane can be significant and offer a very rapid financial return. If you are building a new home and putting the entire system into the mortgage, often the added mortgage expense will be offset by the monthly energy savings. But until we do more than just scratch the surface of the discussion it is difficult to come to an educated conclusion.

The systems you consider should be evaluated based on initial expense, monthly operating expense, annual maintenance expense, warranty coverage and life expectancy and most importantly be a system that is designed around you and your family's wants, needs, goals and budget.

For 24 years we have been listening to our customers and providing them with a perfect comfort solution that meets or exceeds their expectations.