Why is HVAC System Installation So Expensive Right Now?

The cost of heating, ventilation, and air conditioning (HVAC) services is set to rise by 15 to 30 percent in Indiana and beyond due to global factors such as COVID-19 pandemic and bottlenecks in supply chains.

Why is HVAC System Installation So Expensive Right Now?

The cost of heating, ventilation, and air conditioning (HVAC) services is set to rise by 15 to 30 percent in Indiana and beyond. This increase in air conditioning prices is due to a convergence of global factors, such as the COVID-19 pandemic, bottlenecks in supply chains, the red-hot housing market, labor market restrictions, and even the war in Ukraine. These episodes of extreme heat, which have broken records and occur in many places, cause the demand for cooling systems to increase even more than usual in summer. The new changes to the SEER2 will cause increases in the prices of new systems and will affect the costs of old SEER equipment and parts.

As these types of events occur more frequently and in more places, global HVAC supply chains feel pressure at the local level. Heat pumps usually last about 12 years, so regular maintenance is key to using the system as many years as possible. This means that air conditioning systems that may have been neglected by sellers who knew they were moving will soon be replaced by new owners once they move in. Whether or not there is a cost saving (and, if so, how much it will be) will depend on the size of the space in which the system operates and the type of unit you have used previously.

The conflict in Ukraine has exacerbated supply and price pressures that can affect, even if only indirectly, the availability and cost of air conditioning systems. The flip side of this phenomenon is that some people who were thinking about moving (and, therefore, perhaps neglecting or postponing repairs or upgrades to air conditioning systems) decided that the market price was such that they would stay there for longer than they had initially thought. On the other hand, given the rising cost of diesel fuel, some HVAC companies are likely to reduce their service areas. Meeting rising standards means that the total costs of new HVAC equipment will increase by up to 30 percent next year.

When considering a new HVAC system installation, it's important to keep in mind that the cost is made up of several components and factors. The contractor's top priority should be to make the most of a system's lifespan, but if a new system is needed, consider these new regulations, the initial additional cost they entail after the new year and the possible lower monthly operating costs they could entail. It's also a good idea to call a certified heating and air conditioning technician to analyze it. If you answered “no” to any of these questions, it's probably a good idea to call a professional HVAC company.

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