Your home's heating and cooling system is a vital part of your home. Yes, it keeps you warm in the Winter and cool in the Summer, provides proper humidity levels and is a huge contributor to indoor air quality. But how much is it costing you?
Between Operating costs (Utilities), maintenance, repairs and loss of efficiency the numbers really add up quickly. Plus a hidden expense that we’ll talk about below.
Your heating and cooling system has the largest impact on your annual utility bills. The average cost to heat a home in the midwest is around $950 per year. The average cost to cool the same house is around $1350 per year. These costs don’t include the cost for the blower motor running to heat and cool the home. This is an additional $350 per year. Bringing the total operating expense to $2650 per year.
An aging HVAC system requires proper maintenance and upkeep to keep it running smoothly and efficiently. The average cost for professional maintenance is around $150 per year. Plus any needed repairs. On average a repair is needed every 3yrs with an average repair cost of $300. Which brings the Total maintenance & Repair cost to $250 per year.
The Hidden Expense.
An HVAC System doesn't last Forever. Its an appliance, it has several moving parts that gets worked hard to do its job year after year. In fact the average lifespan is 15YRS. So with that being said, Every system will need to be replaced.. So here's the hidden expense that most homeowners don’t think about… INFLATION!! Over the last 30+YRS the average inflation rate on HVAC systems rises at a steady 8-10% per year. In 2002 A top of the line high efficiency system cost around $4000 Installed. Today that same system costs as much as $14,000 Installed! Wowsers.. That's a big difference!!
So with all these dollar signs that just keep piling up, we just can’t look at an HVAC system as an appliance. We have to look at it as an INVESTMENT. An investment that can build in value if looked at from the right perspective. Here’s a breakdown of the Cost Of Ownership over 3YRS with an HVAC System 12YRS old or older.
Figured with an average cost for a new energy efficient HVAC system at $ 10,000 Installed That has uses 30% less energy.
$8700 Operating & Maintenance Costs $2900 per year (x3yrs)
$2700 In Inflation Costs (x3yrs)(@8%)
$11,400 Total Cost of Ownership (3yrs) or $3800 Per Year
Homeowner #1 Upgraded their HVAC system this year with an Energy Efficient model with 30% Annual utility savings.
$10,000 Investment on new HVAC System
$6100 Operating costs (3yrs) -$2600 In Savings
$0 In Inflation Costs (3yrs)- $2700 In Inflation Savings
$10,000 Investment cost
- $2600 In utility Savings over 3yrs
= $7400 Net Investment after 3yrs.
Homeowner #2 Waited 3yrs to replace their HVAC System. They would actually be paying $15,300 for the exact same system. Or an additional $1750 for every year they wait!!
$10,000 New HVAC system
+$2700 In Inflation Costs (3yrs)
+$2600 In Higher Utility Bills (3yrs)
= $15,300 Total Investment
$7400 Homeowner #1 3YR Investment Cost.
$15,300 Homeowner #2 3YR Investment Cost.
Hope this helps you understand the True Cost of Ownership on your HVAC System.
If you think you'd be a good candidate for an upgraded HVAC system, Click here for a free analysis.