How much it actually costs to replace your HVAC unit in Northwest Arkansas
There is so much confusion and misinformation in the world of heating and air conditioning.
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Being an owner in a small heating & air company in Northwest Arkansas, I wanted to write this post to correct some of the misinformation out there around replacing an HVAC system as well as share actual replacement quotes and utility data pre and post change-out. I hope it will help as you and your family make the rather large financial decisions that arise from air conditioning issues.
Before I start, I want to make one thing very clear — the customer whose data I’m going to share (with permission) was not chosen because their numbers make Franklin look good. The customer just happened to be kind enough to share all of their competitive bids as well as their utility bills before and after the change-out. He is a normal guy living with his wife and dog in a normal sized home (1,940 sq ft) in Fayetteville. I’m going to call him John from here out.
Let’s kick this off by first going over what type of system John had prior to getting it replaced. Because John lives in an area without natural gas, a heat pump is his only option for heating and air conditioning his home (technically he could set up a propane tank as well, but it's not usually cost effective). At the time, he had a 22 year old 12 SEER unit (SEER is the air conditioning industry’s way of measuring efficiency). Being 22 years old, his unit’s efficiency had degraded quite a bit and was actually only functioning as a 9.61 SEER at the time of replacement (you can read more about calculating current SEER here, but the basic formula is SEER * (1-.01)^age).
Now, quickly I’d like to go over what heat pumps are and why people choose them. Basically a heat pump is an air conditioner that can operate in reverse. A normal air conditioner takes heat from inside and puts it outside, thereby cooling your home; a heat pump not only does that but in addition is able to heat your home by taking heat from the outside and putting it inside. The ability to both cool and heat a home makes heat pumps quite efficient and a popular choice for mild climates or places without natural gas. The downside of a heat pump is that when it gets very cold — say below 30 degrees — there’s not much heat outside to pull into your home. So what you have to do is install something called “heat strips” to help out the heat pump during cold snaps. In Northwest Arkansas, pretty much everyone with a heat pump has heat strips (John included).
Ok, so now that we’ve gone over what equipment John had, let’s look at the replacement quotes he got. He got three: one from Franklin and one from each of the two largest residential HVAC companies in Northwest Arkansas. I’m going to leave their names out of this, but you’d know the names if I said them.
All three quotes included the same things: a 14 SEER 3.5 ton heat pump, labor to install, and some duct work repairs (which pushed everybody’s price up a bit). Here’s where everybody landed pre-tax:
Company #1: $7,800 *Called one day later to reduce price to $7,300 (Said he had talked to someone at the office and was told they could go lower)
Company #2: $7,649
Franklin: $5,922
Note: This post was published in 2021. If we quoted this system now (January 2024) it would be $6,508.22 +tax. As for the other companies' new pricing, I don't know exactly what it is, but from seeing estimates customers have shown me, both would be around $9 or $10k +tax for the same system. Hope that helps.
After thinking it over for a few days, John ended up going with Franklin. We helped him find financing and a few days later his new system was installed.
Now for the fun part — his energy savings. Thanks to John kindly sharing two and a half years of his electricity bills, we get a really good look at what a new system can actually save you. Here’s the comparison of pre change-out vs after:
For those without a calculator, John saved over $600 in the nine months after his new unit was installed. And if his existing unit hadn't been a higher end unit (most units of that vintage are 10 SEER rather than 12), the savings would have been even greater. To top it off, installing a smart thermostat like a Nest or ecobee would have saved him another 10-14% a month.
I’ll add the usual caveat that everyone’s situation is different, but overall this is a pretty good example of the savings that come from a typical air conditioning replacement.
A couple more notes before I go. One, don’t be misled by people who tell you your 10 year old unit needs to be replaced. To add a bit of context, the median age of replacement in the US is 15 years for a heat pump, 18 years for an A/C, and 22 years for a furnace. Unless you’re facing a truly catastrophic bill, in most cases the repair is the wiser financial decision.
And two, R22 refrigerant is not illegal to use in your system. It’s only illegal to manufacture (as of Jan 1 2020). If you have a functioning R22 system, keep it. When it starts to have issues, you can consider replacement, but I certainly wouldn't replace it until then if it was me.
Hope that helps.
Will Gilbrech, Co-Owner
P.S. If you have any questions, just give us a call: 479-282-0003.
