Home HVAC (Heating Ventilating Air Conditioning) systems in most climates will be a major user of energy. In warm climates it can explain 60% or more of your total electric bill. If your system is ten years old or older it is a chief candidate for an upgrade. Air Conditioning systems are rated by SEER (Seasonal Energy Efficiency Ratio). This is sort of like a cars MPG rating. The higher the number the more energy efficient and less strength it will consume for the amount of cooling compared to a lower SEER rated system. A system 10 years old or older were likely rated 10 SEER or less when new. As they age they can lose efficiency due to compression loss and heat move restrictions like a dirty or damaged wire. If you have an older unit in need of repairs you might be tempted to use the few hundred or few thousand dollars it may take to get it up and running instead of the thousands it would take to replace with a high efficiency system. Repairs can many times be the best different with a tight budget or in a case where you don’t plan to stay in the home long enough to get a ROI (return on investment) from the new system.
But in the long run it can cost more to repair an older unit then replacing. If you have an average 2,000 square foot home with a 4 ton air conditioning unit, it could cost somewhere around $5,000.00 to replace plus or minus a thousand or so depending on the grade of equipment and what all is involved with the installation. If this hypothetical system needed repairs in the typical $600-$1,000.00 range it might seem like you save around $4000.00 by repairing instead of replacing. But you have to factor in operating cost and future repair and maintenance to get a true cost comparison. If your system is starting to need repairs in that price range the chances are good that year after year it is going to need already more repairs as it ages. If you are adding refrigerant because of a leak and not repairing the leak you are guaranteed at the minimum one, but probably several service calls a year to keep it cooling. Finding and repairing small pinhole leaks in the wire can cost a lot in addition. Repairing wire leaks can be very difficult. When the wire starts to leak it is likely there are many small pinhole leaks in the tubing where the fin makes contact with the tubing. This is due to electrolysis caused by contact of two dissimilar metals and the presence of VOCs (Volatile Organic Compounds) that have condensed onto the wire that contribute to the formation of these pinholes. Repairing them is a tricky course of action and can consequence in less than desired results. Repairing one leak can just open another one nearby. already if you are successful the efficiency of the system can never be returned already to its original low 10 SEER rating much less improving it. Charging a leaking system to “get by” also just contributes to the cost of operating that system. You have the service costs plus the increased operating cost as the system losses refrigerant and become less and less efficient.
So let’s look at that $5,000.00 system verses maintaining your old system over a period of just five years. Up front we already know you will have an expense of about $1,000.00 to get the system already operating at a low efficiency level. So now we are down to $4,000.00. Now let’s say you average a very modest projected $350.00 in maintenance and service cost for years 2 to 5. Now that new system is costing you just $2,600.00. Most systems will have a 10 year parts warranty so already if something did fail at the minimum the parts would be covered. The labor for repairs on the new system will be at the minimum 1 year and up to 10 years can be additional for around $500.00 on most systems.
We haven’t already talked about energy cost savings in addition. According to operating cost comparison software using 0.11 cent a kilowatt hour and a modest increase in rates of 3% a year you would save $2,092.00 on air conditioning cost by upgrading to an Energy Star rated 14 SEER system from 10 SEER system. And this is assuming your a 10 SEER system is nevertheless operating at 10 SEER. I can tell it won’t be. Savings will vary.
According to the same cost comparison software, government studies have also shown an increase in home value of around $7,800.00 by making this upgrade. When we expand the time frame out to the expected average life span of the system to 20 years your savings is over $10,000 in operating costs.
So waiting till that old system completely fails to replace it can cost you much more in energy cost and comfort then replacing it now.