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Why is New HVAC So Expensive?

Why is New HVAC So Expensive?

It’s no secret that the US economy has experienced rapid inflation over the past few years. These costs trickle down from manufacturers to small businesses to the end consumer.

As the end consumer, you feel the brunt of these price increases, leaving you wondering “why is new HVAC so expensive?”

The cost of HVAC is dependent on a variety of factors. Understanding the line items that rack up your bill can help you vet HVAC companies and ensure you receive a fair deal.

Raw Materials and Equipment

Raw materials are one of the top cost drivers with new HVAC. Prices for steel, lumber, copper, and aluminum have all increased over the past few years. In addition, raw materials have faced shortages and supply chain issues. The inability to obtain raw materials creates scarcity, further increasing prices.

Furnace and air conditioner prices are also rising with rapid inflation. HVAC companies must provide installation and transportation equipment, such as tools and diesel. Additionally, prices for vehicles have been increasing, making it more difficult for companies to buy vans and trucks to go to job sites.


The price of necessary parts, such as refrigerant and semiconductor ships, are impacting HVAC prices. Refrigerant is the gas used to transfer heat out of your home or business. Traditional refrigerants like R-22 and Freon have been phased out of use for ecological reasons, making repairs on traditional refrigerant systems more expensive. New refrigerants that are more environmentally friendly have increased demand leading to an increase in price.

Furthermore, the shortage of semiconductor chips is impacting not only the HVAC industry but also many other industries requiring computer chips. To have a highly efficient system, HVAC units require a semiconductor chip to monitor the system.


In the past, part of an HVAC company’s revenue was parts and services to existing units. In recent years, customers have urged businesses to provide a multi-year warranty protecting them from costly repairs and part fees. Removing this revenue stream with a warranty leads to higher prices and fees in other areas of the HVAC business, such as labor and installation.


Why is New HVAC So Expensive?HVAC as a trade has become a highly specialized field. For this reason, wages in the industry have been rising to compensate for workers’ knowledge and experience with modern HVAC systems. Especially following the Great Resignation, HVAC companies must pay higher wages to remain competitive.

When the business pays workers more money, it leads to higher prices passed down to customers. Keep in mind that higher wages in the industry can attract knowledgeable and skilled workers that ensure your HVAC unit is installed properly the first time around.

Minimizing Costs While Maximizing Value

Sometimes, deferring the purchase of a new HVAC system isn’t an option, but a requirement. In these instances, you want to be sure you are minimizing HVAC costs while maximizing value.

This can be done by working with the right HVAC contractor. Our team at 365 Mechanical prioritizes your budget, finding ways to reduce your invoice while still providing you with the needed upgrades. Reach out to a team member today to set up a consultation.

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