How Much Does an HVAC Unit Replacement Cost?

If the HVAC system isn’t performing the way it used to do as brand new, it may be time for a replacement. Yes! Replacement, not repairing. 

As an HVAC professional, you have often been bombarded with questions on why the HVAC system be replaced instead of repaired. 

According to US Energy Saver, HVAC units last 15 to 20 years. So, if the lifespan is almost over, there is no point in repairing it. In fact, the repair cost will be higher than the replacement cost. 

Even if the replacement cost could be higher, for now, it will be a more profitable investment in the long run.

So, are you an HVAC business owner or contractor new to the HVAC business? Do you have doubts about what the cost to install HVAC units is? Then keep reading this article. We’ll explain all about the HVAC unit replacement cost.

What Is an HVAC Unit? 

An HVAC system has the power to provide comfort year-round. The combined heating, ventilation and air conditioning (HVAC) unit helps stay cool in summer and warm in winter and eliminates dust and allergens by circulating fresh air. 

Installation of an HVAC system with ductwork could be a high investment for the house owners but would be worth enough in the long run. A branded HVAC system generally lasts for 10 to 20 years without complaint. 

But when the HVAC unit stops working the way it used to do as brand new, it may be time for a replacement.

So, before getting into the replacement cost, you could make your customer understand why they should choose HVAC unit replacement over repairing. However, the replacement cost of an existing HVAC unit is generally less than a new installation or sometimes equal.

The prices depend on the building size, ductwork length, brand, type, and size of the HVAC system you have in your business place. We don’t want to create any confusion, so we’re not going to disclose the HVAC unit replacement cost now, not even an estimation. So, keep scrolling till the end.

When Should You Suggest Your Customer to Replace an HVAC unit?

• If the system is more than 10 years old, it is likely being operated with a banned R-22 refrigerant. Replacing the entire HVAC system is better than replacing a few particular parts.
• The heating, ventilation, and air conditioning systems have indeed become an integral part of modern commercial and even residential buildings, but we can’t harm nature anymore.
• Several cost-efficient, power-efficient, and environment-friendly new HVAC systems have entered the market. If the repair cost is around 50% of the price of the new HVAC unit or electricity bills are increasing, replacing the unit will be a worthwhile investment.
• If the existing unit has excessive dust that tends to musty odors and poor air quality, you can suggest a replacement. 
• If the earlier model started producing loud noise or odd sounds, consider replacing instead of repairing if your clients are okay with the pricing.

Types of HVAC Unit Replacement

An HVAC unit replacement project could cost around $5000 to $11,000 with a new air conditioning unit and furnace. If the project requires new ductwork installation, you can charge between $7000 and $16,000. 

However, the final cost depends on the type of replacement required for the project you’ll be working on: 

• Change-out

If the ductwork works efficiently, making your customer spend money on new ductwork is meaningless. If so, suggest the change-out replacement.

Changing out only the major parts that create problems or could trouble the system in the future is the way to go ahead without replacing the ductwork and save money on installation costs. 

The entire project could take approximately 1 to 3 days maximum. So, you can typically charge around $4000 to $10,000 for replacing any part or unit. 

• Full installation with ductwork

If the existing HVAC unit is old enough, the ductwork and system could be worn out. Hence, the new ductwork will help reduce utility bills. A full installation along with ductwork reduces electricity bills and ensures a more desired temperature, dust, and allergen-free environment than before.

The project could take 3 to 5 days, while the ductwork itself requires the labor of 2 to 4 days. Most HVAC contractors generally charge around $6,500 to $12,500 for installing the entire heating and cooling system, including ductwork. 

• Full installation with add-ons

Suppose your client demands a Hitech HVAC system. In that case, you can install some advanced features during replacement, such as a geothermal heat pump, programmable thermostat, humidifier, energy-efficient ventilator, UV lighting, zoning system, and much more. 

You may need to charge a bit extra for these latest features, which should come to around $13,000 to $17,000 for replacement, along with ductwork and all bells and whistles.

Factors that Affect the Cost of HVAC Unit Replacement

The prices generally differ from one project to another due to the HVAC equipment, labor costs for installation or replacement, age and condition of the old HVAC system, removal and disposal costs for the old unit, and much more. The factors that directly affect the costs are:

New HVAC system cost

Generally, the price range of a newly replaced HVAC system is around $1000 to $10,000. The price depends on the brand your customer chooses, the size you suggest installing, and the bells and whistles your customer would wish to have.

For instance, standard quality air conditioners come around $1500 to $8000, and a new furnace will cost from $1000 to $4000. The energy-efficient model is higher in price but saves money in the long run and avoids high energy bills. 

Labor charges

You need to define labor costs based on the duration and complexity of the project. Installing an HVAC unit takes 6 to 10 hours, but new ductwork installation could extend the replacement project you will work on by 1 to 3 days. 

As per industry standards, you can keep your labor charges from $500 to $2500 to stop being misjudged that you have a higher labor charge. 

Installation complexity and accessibility

If the old HVAC unit is old enough and requires ample customization because of numerous factors like they are installed in difficult-to-access places, a small attic, or an attic with blown-in insulation, it will increase the HVAC unit replacement costs. The more difficult and enhanced the HVAC unit replacement process, the more expensive the replacement cost you can charge.

Removal and disposal

When it comes to replacement, you have to do the removal and disposal job for the existing HVAC unit, which is pretty time-consuming. So, you can charge for the labor you put in for removal and disposal jobs.

Climate

The new HVAC system prices depend on the size, and you need to define the required size according to the surrounding environment and climate. 

For instance, the British Thermal Units (BTU) output of the cooling unit should be 10% more powerful for the hotter climate, adding extra cost to the air conditioner.

Similarly, the dry climate areas need humidification in commercial buildings, office places, warehouses, and other areas.

Hence, business owners need to pay a huge extra for industrial humidifiers to add them to the HVAC system. Thus, climate hugely affects the overall HVAC installation cost.

Additional HVAC installation costs and considerations

• While replacing the entire system, it’s a good idea to replace ductwork and safeguard it for the future. You can expect to pay around $12000, more precisely $10-$20 per linear foot. Using this per square foot ductwork installation rate, estimate the charges for ductwork installation. 
• Insulation for older construction, upper floors, attic that causes extra heat in the summer, and the rooms that get chilled in winter may cost from $1000 to $2100 for now but will reduce 10 to 15 percent cost in utility bills. 
• If asbestos is found during the HVAC inspection, the project cost could increase by $500 to $1000 for asbestos removal.
• With a new air conditioner and heat pump, some business owners install smart Wi-Fi connection-enabled thermostats by spending $125 to $275 extras to get a more efficient heating and cooling effect.
• Likewise, it is expected to pay from $13,000 to $17,000 for other upgrades and add-ons, such as variable speed fans, UV lighting, humidifier, and adding zones. 

Points to Discuss Before Replacing HVAC Unit

Clearing all sorts of miscommunication is the only way to ensure the best result at a cost-effective price. So, before taking up any replacement project, discuss these things with your clients. 

• Is it possible to save money on ductwork?

Whether they want to move ahead with the existing ductwork or not? If they want to save money on ductwork, thoroughly inspect the duct and associated areas and let them know if the existing ductwork is working efficiently or not.

If nothing is wrong, the HVAC unit replacement charge will be less. But suppose any leaks, mold, or asbestos are there. In that case, HVAC duct replacement costs will be incurred as you have to work on those areas, and you may even need to hire a professional asbestos removal company to extract and remove this dangerous element.

Make your customer well-aware of these things to eliminate the chance of having any confusion related to payment at the end of the project.

• Why do you prefer any brand or a unit size?

If you’re emphasizing any brand’s product, briefly discuss its pros and cons. For instance, how long the newly installed HVAC unit will last, whether it comes with a warranty, etc. Besides that, make your customer understand why their construction needs the suggested HVAC unit size, as the unit cost depends on the unit size and brand.

• Is the unit causing an issue under warranty?

If it’s a matter of an internal unit and the system is still under warranty, you could suggest your customer ask for a replacement of the unit from the manufacturer free of cost. 

• Get your customer hints about budget and deadline

Discuss the estimated budget and time. How many workers will be working on this particular project? If they are in a hurry, you could involve more workers or only the experienced employees by adding extra costs, as the experienced HVAC professionals and new employees will not charge the same. 

Give your customers insights about how much extra cost they could be charged for it or other upgrades and add-ons they want.

Conclusion

The HVAC system helps in keeping the house comfortable during all seasons of the year. So, if it fails as an HVAC contractor, you first try to inspect and check if it can be repaired. But considering the system’s lifespan, you will know there is no point in repairing an old HVAC system. Rather replace it.

Before you quote your customer the replacement costs, get an idea of what to charge by comparing the market pricing structure. 

In this comprehensive guide to HVAC unit replacement costs, we have tried to break down the cost of installing a new heating or cooling system and explain the different types of HVAC installations and the factors to consider during replacement.