Get ready for the HVAC and water heater replacement boom

Get ready for the HVAC and water heater replacement boom

Working together, manufacturers, utilities, retailers and contractors can help homeowners pick the right energy-efficient heating, ventilation and air conditioning (HVAC) systems and water heaters.

It’s a humid day in August, and a homeowner’s air conditioner is blowing hot air.

The contractor says the system is a goner, and the homeowner is shocked.

“Didn’t we just put the darn thing in a couple of years ago? Or maybe it was 10. Or 15. This is definitely not in our budget.”

HVAC systems generally last 15 to 20 years. Based on the number of houses built during the boom from 1994 to 2006, we will soon need to replace between 1 and 2 million HVAC systems each year. Similar numbers apply to water heaters.

For the homeowner, this is a reactive and immediate purchase. When the air conditioner crashes in the summer heat, homeowners have to replace it – immediately. The same is true for a water heater leaking on a hardwood floor.

The homeowners did not plan for this expense. They are not in control of the situation, and they feel the stress.

The contractors drive the process

A reassuring, confident contractor can help homeowners make better decisions. Since these are unplanned expenses, the natural tendency is to base the decision on out-of-pocket cost alone and buy the most inexpensive replacement. Homeowners have a tendency to rationalize that “anything they buy” will be more energy efficient than the unit they’re replacing. The contractor should re-frame the decision to include ongoing operating costs and monthly utility savings.

And if the contractor knows about rebates or financing available from a retailer or local utility (particularly if he’s willing to “front” the rebate and take it off the purchase price), it’s much easier to convince a homeowner to purchase a higher-efficiency unit.

To help homeowners buy the most energy-efficient systems, retailers, manufacturers and utilities should work together to –

  • Put financing, incentive and rebate programs in place
  • Streamline these programs, and do the work for the homeowner whenever possible
  • Fast-track approvals and processing – remember, time is of the essence!
  • Inform contractors about them, especially about how to apply for them on behalf of homeowners and how to speak in terms of operating costs
  • Stock energy-efficient systems, or make them quickly available
  • Market higher-efficiency systems to contractors, since they will be making recommendations to panicky homeowners


Posted on

August 26, 2013

About the Author

Jim Lyza

Jim is a former contributor to Shelton Insights.

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