Disposable HVAC? Not in the Cards Yet
The other day I drove past an appliance repair shop and I had to wonder how these people manage to stay in business. Oh sure, there are still a lot of reliable appliances clinging on to their shelf life. Many major appliances like stoves and refrigerators are still expected to last at least 10 years, or exactly one day after the warranty expires. Imagine that.
Even today's washers and dryers have come down far enough in price that if they last over five years, they are probably considered old reliables. I've seen major appliances advertised for around $400. If one of those appliances lasted five years, it would cost the owner about $7 a month. That's not too shabby. Call me crazy, but I might pay $7 a month for 60 months and then start all over again with a new appliance.
That's pretty much what consumers are doing when they buy television sets, cameras, camcorders, computers, and vacuum cleaners, to name a few. Each one is designed for a short shelf life because technology keeps making them obsolete within a couple of years.
Thankfully HVAC equipment doesn't have planned obsolescence.
REINFORCED BY 13 SEER
The new 13 SEER standard reinforces the argument that HVAC equipment is not disposable (as if it ever was). Consumers are seeing higher price tags for replacements and stretched budgets are being stretched even further. Even Gumby might have a hard time keeping his arms around rising equipment costs.Add this to the fact that energy costs have spiked across the United States and consumers should be convinced that they need to purchase reliable, energy-efficient equipment that will last for many years and withstand the changing technologies happening inside and outside the building envelopes. The "good-better-best scenario" where reliability was based on price has been replaced with higher-priced non-commodity equipment.
Emerging green technologies - making buildings more energy- and ecologically friendly - play right into the 13 SEER (and higher) philosophy. I doubt that a home or business owner who upgrades their mechanical equipment to meet the demands of tougher environmental standards will want to reinvent the wheel and replace all of the equipment 5-7 years from now.
I know if I invested thousands of dollars into making my building more efficient and comfortable, I would not want to open up the bidding process again before I had a chance to pay off the first retrofit.
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And 13 SEER - as if you didn't need to be reminded - is the minimum efficiency standard. For some HVAC contractors, 13 SEER has been at the low end of their product offering for years. Selling 14 SEER and above is quite commonplace. And we all know that this equipment is definitely not of the disposable variety.
THAT'S GOOD FOR HVAC CONTRACTORS
Not only is HVAC equipment designed for a longer shelf life, it also comes with a built-in customer base. In order to maintain the equipment in proper working order so that it doesn't become disposable, home and business owners need regular service and maintenance on their equipment.That's where HVAC contractors play the key role. The service business is the big money maker for contractors. Where else can a good cash flow and a busy schedule be achieved? No where. The opportunity to sell service agreements has never been greater.
Customers often balk - as I do - when they are asked to purchase a $60 extended warranty on a $200 "disposable" camera. But ask them to purchase a two-year service agreement (between $120 and $200 for example) on a $7,500 "non-disposable" HVAC system and the chances of signing them up to the agreement increase greatly.
This should be the best time to prove the worth of efficient, well-maintained HVAC equipment. It's an opportunity you shouldn't dispose of. Don't let your techs become too lonely.
John R. Hall, Business Management Editor, 734-464-1970, 248-786-1390 (fax), johnhall@achrnews.com
Publication date: 06/12/2006