Repair or Replace?

While there are many variables in any residential or commercial property, the main decision points regarding repair or replacement of a heating and air conditioning system are concepts we can help you with at Dutch Enterprises.

Our experts know that one of the most direct points to consider regarding replacement of your HVAC system is simply its age. Do you have a system that is more than 10 years old? Even if it still runs dependably, you still might be better off with a new one.

Fix or Replace?

The physical life of HVAC equipment, similar to personal computers, can often be longer than its economic life. If they have been well maintained, the air conditioning components can last up to about 15 years and the furnace even up to 20, but issues of economic obsolescence apply. Plus, older heat exchangers are more likely to develop cracks or rust holes that could cause carbon monoxide gas to enter your indoor space. Experts agree that 10 years is the age at which systems become eligible for replacement incentives, whether they run well or not.

When weighing the costs and benefits of repairing or replacing older equipment with more efficient HVAC equipment, keep the following points in mind.

• Fuel costs tend to go up more than down over the long run, particularly in recent times, and
• The monthly savings continue after you reach the “break even” or “pay back” period on the new equipment.

Replacing All Or Part of An Air Conditioning and Heating System

Many owners have questions on this topic, and one can find vast amounts of research regarding partial or full replacement. Due to the fact that furnace and heating equipment can last up to 50% longer than the major air conditioning components, the question is very often encountered when analyzing systems. Here are a few additional considerations:

• Matching the compatibility of the air conditioning and heating equipment must be considered. They share some equipment, such as the blower.
• Field (on-site) matching of new and old components compared with manufacturer certified matching of new components can be done, but is not likely the best investment.
• Two major factors for long-term satisfaction with HVAC equipment will always be the quality of the original load calculations and the installation, followed up with regularly scheduled maintenance.
• If you don’t replace all the equipment, you may not be entitled to the same rebates, tax credits, or other financial incentives available with new systems.

On the upside, although field matching of new and old heating and cooling equipment can sometimes be done by experienced contractors, the downside in less reliability, comfort and potential rebates making it often not worth the modest savings. When considering that the new equipment would have a higher efficiency rating and a manufacturer’s warranty, the advantages become even clearer.

Reasons to repair vs. replace an aging heating and air conditioning system.
Due to rising energy and labor costs plus environment concerns, replacing marginal systems often makes sense. However, there are some reasons you might choose to repair an aging air conditioning system. Examples:

• The property is near the end of its structural or economic life and may be removed in the near future.
• The property requires repair before installing new higher efficiency equipment can be justified.
• Unavailability of cash or reasonably affordable financing for new equipment or efficiency improvements.
• You are planning to move soon, and it is possible the next owner or occupant will make significant structural changes. In this case the value of the installation would be discounted by the new owner or occupant.
• Anticipation of upcoming changes in available equipment or incentives.

Factors for Replacing HVAC Systems

Monthly utility bills
If electricity and gas bills from cooling and heating are straining your monthly budget, a predictable path to better management of cooling and heating costs is to use fewer units of energy each month. New air conditioning and heating equipment is steadily getting more efficient. Also, when you have new equipment installed, your ductwork, which likely is leaking into your attic, should be sealed or perhaps replaced, depending on its condition and where it was originally routed.

When you combine the efficiency of a new air conditioning and heating system (using up to 50 percent less electricity or fuel) with the replacement or sealing of leaky ductwork (saving up to 27% percent, depending on the condition), you can save a substantial percent on the monthly electricity and gas costs of cooling and heating your home or business.

Repair costs

Money spent on repairs of an aging HVAC system could instead be going toward a new, more efficient unit. Get a total on your repair bills for the past 2 or so years. What % of the cost of a new system have you spent already? Did you replace any major components, such as the compressor, evaporator or condenser coils, or the heat exchanger? Do you believe upcoming repair costs will go up, stay the same, or go down in the near future? At the rate you are likely to spend, how many years would it take to pay for an entirely new system with its additional benefits?

Rebates, tax incentives, and low or no interest loans

To take advantage of rebates, tax credits, and special financing offers from manufacturers or your local HVAC contractor, you will likely need to purchase new air conditioning and heating equipment. Financial incentives are generally not offered on equipment repair.

Payback Period

Since variables such as the costs of electricity and fuel and repairs (should this be required) must be included, payback periods will always be an estimate.

When comparing the costs of repair to replacement you will likely want to compare the payback for new equipment at several levels of efficiency for both cooling and heating. The factors that go into the worksheet HVAC contractors use to calculate these estimates are numerous and fairly complicated, and Dutch Enterprises is experienced with making these determinations.

Here’s an essential point to remember: The monthly savings on utilities and fewer repairs and the extra comfort go on after you reach the pay period on a new system. Like investments in the financial world, when you replace an aging air conditioning and heating system, there is a return of investment (pay back period) and a return on your investment in the months and years afterwards

Other benefits of new HVAC equipment

More Comfort
Do you have unplanned hot spots in your home in the summer and cold ones during the winter months? Does your “monster” oversized A/C turn on and off quickly, but leave the air in your rooms feeling damp? Your new system will deliver more comfort to your home or business. Why? A HVAC system with too much capacity cycles on and off too quickly, which doesn’t allow time to adequately “condition” the air. This causes an overly humid, clammy indoor environment instead of a comfortable cool. Also, if your system was undersized (or has leaking ducts) it will often not heat or cool adequately overall or perhaps in certain areas.

New equipment would be more reliable
Equipment breakdowns tend to occur during the time of heaviest usage—on the hottest or coldest days when you need air conditioning or heating the most. It is better to plan ahead in an orderly way than to have to compete with a multitude of other cold or hot local folks when they are competing for service from your HVAC contractor.

New equipment runs quieter
Both the outside components and indoor air handlers have gotten quieter in the past few years. With quieter new equipment, you can enjoy the inside areas nearest your air handler and your deck, back, or side yard more

Easier on our environment
If the payback period from a financial point of view will take longer than you expected, consider this: diverting your monthly spending from higher energy and repair costs to new equipment helps save fossil fuels and slow CO2 emissions. Though difficult to place a specific dollar amount upon, it makes sense to consider this benefit.