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Spend a Bit More Now to Save Loads Later

Posted by Charley Cormany, EFCA Executive Director

Most people replace their furnaces or air conditioners when they fail, in which case the homeowner’s primary concern is to get their service restored quickly. Contractors respond to this need and are more than willing to sell an exact replacement, as this is the fastest and easiest solution. Even when other options offer a better long-term solution, choosing these options can add time or expense to a project. For a contractor, suggesting alternative or more efficient solutions may be less profitable. But for customers, not considering all options in the name of restoring service is a huge missed opportunity.

Heating and cooling systems are one of three major mechanical components of a building. Most homeowners and contractors know a bit about their electrical system; the same is true for plumbing. Many contractors will even tackle basic plumbing or electrical tasks themselves. When it comes to HVAC (Heating Ventilation & Air Conditioning), it is a different story. Most general contractors have little or no firsthand knowledge of how HVAC systems work, which means that they must rely on their subcontractor’s opinions. I can only think of a handful of general contractors who genuinely understand HVAC systems and the wide variety of choices available today.

If the HVAC “expert” gets it wrong, the home or building owner will be paying the price for years to come. The expected useful life (EUL) for an HVAC system is 12 to 15 years. In practice, many are still in service 20+ years later. That’s a long time to be stuck with a poor solution. If contractors had to pay for operational costs, I guarantee they would install different systems, and swapping like-for-like would not be the norm.

Imagine this scenario. Your car dies. You need a new one to get to work. You call up the dealer and ask them to price a new car for you. The first thing they ask is, what kind of car are you currently driving? You tell them it’s a 2001 Hummer. They check inventory and suggest you buy a new 2022 Suburban, which is as close to a Hummer as they stock today. You buy it, sight unseen, and then continue to drive it for the next fifteen years. You don’t need a Suburban, as the kids have left the house. You might have wanted a car that would fit in the garage, and the Suburban won’t. You may have gotten used to getting 10 miles to the gallon with the Hummer, but gas is getting more expensive. The Suburban gets 13 miles to the gallon. That’s an improvement, right? The point I’m trying to make is that you would not purchase a big-ticket item, like a car, without doing some research or considering the long-term impacts of that decision.

HVAC systems are expensive, and yet most people blindly trust the “HVAC professional” to make the right decision for them. The HVAC contractor is motivated to restore your service as quickly as possible. Typically, the building owner wants to spend as little money as possible. These two factors often lock the home or building owner into an inefficient, expensive-to-operate solution for years to come. The problem is that there are “misaligned incentives” in this decision-making process. It’s not anyone’s fault. It is just how we have always done things.

Maybe a better idea is to plan ahead and prepare for HVAC systems to fail, which we know happens. The easiest way is to pay attention to the age of the system. When purchasing a home, it is common to use a third-party inspector to evaluate a property before making a final offer. Most folks look at things like the condition of the roof or structural issues. Few pay attention to heating and cooling systems. Again, this is a missed opportunity, as you might be able to negotiate a lower price if the HVAC system is old, and the plan to replace it with a more efficient replacement.

There are few things in life as disappointing as a new home that is uncomfortable and expensive to heat or cool. I have encountered this situation many times. Homes get extensive renovations with premium materials and end up with rooms the homeowners can’t use because they are too hot or cold. Comfort takes a back seat to granite countertops in most consumers’ minds. It does not have to be this way.

If I were advising someone on the best long-term strategy for enjoying their home, I would follow this basic plan:

1. Invest in the building envelope first. The building envelope is what separates you from the outside. Think walls, windows, ceilings, and floors. Insulation is the best value of any upgrade you can do to your home. Put tons of insulation in the attic and insulate your walls too. Air sealing is critical as well. Fixing holes and gaps that allow hot or cold air to enter the home is vital. Insulation is like a wool sweater; air sealing is the windbreaker you put over it. Building envelope improvements have multiple benefits, including improved indoor air quality, comfort, reduced cost of operation, and more. These are cheap improvements that provide years of benefits.

2. Consider replacing your HVAC with a complete system. Forced air systems rely on ducts to distribute heating and cooling to the entire home. Distribution systems are critical and often overlooked. There are many good reasons to upgrade your duct system.

First, most duct systems leak. California homes lose 30 percent of their heated or cooled air, on average. Heating or cooling a house with leaky ducts is like trying to heat your car as you drive with one window open, and that is not an exaggeration.

Second, most duct systems are not correctly sized. Proper sizing requires determining the actual heating or cooling loads before installation, which is a step many contractors skip. Building codes require load calculations for new systems. Ask your contractor to show you their load calculations. If you followed your plan and improved the building envelope, the HVAC system can be smaller and still provide comfort – in the industry, this is known as “downsizing” or “rightsizing.”

On the other hand, slam a new oversized furnace on an undersized, leaky duct system, and your home comfort and cost of operation will suffer. In HVAC systems, bigger does not equal better. Modern, computer-controlled multi-stage or variable capacity equipment can improve comfort and reduce operational costs. These options will likely cost more upfront, but the improved comfort and lower operating costs are well worth the initial investment.

3. Electrify as much as you can. California is transitioning to a clean energy future. The fuel of choice will be electricity generated from carbon-free sources. The California Energy Commission is currently working on a long-term plan to phase out natural gas in residential applications. Many cities and counties have already placed bans on natural gas. The handwriting is on the wall. As natural gas gets phased out, it will become more expensive. The good news is that there are reliable and efficient electric options ready to go:

  • Heat pump space heaters can replace gas furnaces.
  • Heat pump water heaters can replace gas water heaters.
  • Induction cooktops can replace gas for cooking.
  • Electric heat pump clothes dryers are gaining traction too.

If you need to change a gas appliance – go electric. It might cost a bit more now, but it will help to future-proof your investment. Check your local utility or a statewide electrification program such as the TECH Clean California rebate program. Plan now, and make all-electric a goal.

4. Generate your own electricity. Solar panels allow you to generate your own electricity on-site, typically on the roof of your home or building. Solar is now the cheapest source of generation, and the cost is going down every day. If you have solar panels, you need to use as many electric appliances as possible. In fact, it might be best to electrify first and then add PV, as some utilities have output restriction limits on solar systems based on load. For example, in PG&E territory, your solar system can only be 10 percent larger than your total load. If you size your system while you still have gas appliances, it will likely be too small when you convert to all-electric. To take full advantage of PV, electrify your loads. Maximize your savings by installing space and water heating heat pumps, induction cooktops, electric clothes dryers, and an electric vehicle. Going all-electric will allow you to maximize the size of your solar system.

Of course, the above suggestions are subject to your plans and budget. If you plan to be in your home long-term, making some basic envelope improvements and replacing gas appliances with electric alternatives is a great idea. Take it a step further and add PV panels. Taking these steps can significantly reduce your greenhouse gas emissions by eliminating your home’s fossil fuel consumption and replacing it with clean electricity. Your home will benefit from improved indoor air quality, be more comfortable, and cost less to operate.

It’s great if you can take all these steps at the same time, but few of us can afford to do that. Instead, create a plan to transition off fossil fuels. Then, when your furnace fails, you will be excited as you can now replace it with an efficient, emissions-free alternative. In the end, you will be more comfortable, use less energy, and reduce your impact on the environment in the long term. It sounds like a win-win to me.

Charley Cormany

Executive Director

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