Why the most energy efficient system might not be your best choice
Because some of today's high-efficiency heating and air-conditioning (AC) systems use less than half the energy required by older units, it might come as a surprise that the choice to switch is not always a cost-effective one. The sticker price of the highest efficiency system can delay the payoff from energy savings too long to be of real benefit. Like paying double for a car that gets just 10 more miles per gallon, the upfront value simply isn't there, and the longterm value might never come home.
The same holds true with heating and air conditioning (AC) systems. Before buying, always compare the lifespan of the equipment to the cost of ownership.
First of all, consider the fact that today's least expensive systems will nearly always have an energy savings of 25-50% over the units they replace. Government mandated minimum efficiency requirements guarantee an efficiency level on new furnaces, heat pumps and air conditioners that far exceed those manufactured 20 or 30 years ago. Not buying the high-end system does NOT mean you're buying low efficiency.
Data from the Air-Conditioning and Refrigeration Institute (ARI) suggests that for Southern Illinois the typical heating and cooling system operates approximately 1000 hours during cooling season and 2000 hours during heating season. Based on 3000 hours total running time per year, consider the yearly operating cost for two heat pump systems:
3 ton 13 SEER standard heat pump system with approximate cost of $5000
36,000 BTU/h x 3000 h x $0.09/kWh / 13 BTU/Wh/1000kW/W = $747.00/yr
3 ton 19 SEER high-efficiency heat pump system with approximate cost of $10,000
36,000 BTU/h x 3000 h x $0.09/kWh / 19 BTU/Wh/1000kW/W = $511.00/yr
Assuming a 15-20 year typical heat pump life, even at much higher electric rates or much higher average temperatures, the break-even point will approach or exceed the life of the unit. This is without considering interest on financing or interest earned on money not spent.
Additionally, just like cars or any other daily-use equipment, maintenance and even breakdowns can be expected. If the initial purchase price of a high-efficiency system is more expensive than a standard unit, it stands to reason that maintenance and repairs will cost more, too. All of this will only add to the amount it would take in energy savings to recover your initial investment.
We're here to help. We service what you buy, and we are always available to help you prepare for big purchase decisions.
Will it ever benefit me to purchase a high-end system?
Not long ago, the IRS and local electric companies were giving significant tax credits and incentives for the replacement of old heating and air-conditioning units with new high-efficiency systems. The energy rating requirements for these credits and incentives were such that an eligible system could be installed for only a couple thousand dollars more than a standard unit, reducing the time before return on investment by several years and making the choice quite worthwhile for some homeowners. If those credits are re-instated, reconsidering a high-efficiency system would be more than reasonable.
