When we propose a replacement and we will offer 3 options; Best, Better and Good. The biggest differences between the options are energy efficiency. Each of these systems will heat and cool the home well, but the better systems do it using less electricity. And, as you have likely guessed, as you go up in efficiency of the system, the cost of the equipment goes up as well. So we are often asked, how long it will take for the dollars in energy savings to pay back the difference in the cost of the higher efficiency system. Sometimes the payback can be more than 5 years. But there is another way to look at it. Let’s say the higher efficiency system costs an additional $1000 over the lower efficiency model, but the higher efficiency system will save on average an additional $20 per month on the utility bill. In this case the payback would be just over 4 years. The $1000 additional investment brings a 24% return on the investment per year ($20 savings X 12 months = $240 / $1000 investment = 24%).
We believe purchasing a higher efficiency heating and air conditioning system should always be your first choice because the system will last longer, typically 15 to 20 years and with the cost of electricity going up during those 15 – 20 years, a higher efficiency system is a smart long-term decision. The return on the original investment over 15 years would be over 360%. Don’t you wish you could find a CD at your local bank that would get that kind of return? If you have any questions or would like to learn more about high efficiency home heating and air conditioning systems, at 517-3050.