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High Efficiency Air Conditioning – Return On Investment (ROI)

Your air conditioner is broken and can’t be fixed. Money’s tight and your air conditioning company is trying to convince you to consider purchasing a high efficiency system that is well beyond your budget. Can you afford it? Is it worth it? This article will show you how to evaluate the purchase of a high efficiency system as an investment rather than another household expense.

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First, consider that a basic system is a required expense. You have to have air conditioning so the purchase of a minimally efficient (14 SEER) system is a given. Most people will consider the rating of the manufacturer, the expected life of the new system, and the reputation of the dealer in addition to the purchase price to make an informed decision.

The dealer has offered options to upgrade the base system to a high efficiency system (16-20 SEER) that may include two-stage or variable speed air conditioners and heating units. These systems can add from $1,500 to $8,000 to the cost of a basic system. These upgrades reduce energy bills and increase comfort. How do you evaluate an additional expense in terms of return on your investment?

Consider the following. Your present system is most probably 10 SEER meaning that a new system at 14 SEER will reduce the cost of air conditioning by 40%. Since air conditioning represents 60-65% of your electricity bill, you overall bill should be reduced by 24% (40% X 60% = 24%). This savings is a given and does not apply to the savings of upgrading the base system.

Your true investment is the additional cost to upgrade to a high efficiency system and the return on this investment is the savings above and beyond the cost savings associated with the move to a 14 SEER system.

Example: ROI of upgrading a 5 ton Trane 14 SEER, vertical, electric, single stage cooling and heating system to a Trane Tru-Comfort 20 SEER, variable speed cooling and heating system.

  • Additional Upgrade Cost $8,200
  • Annual Utility Cost Of Existing System 2,880
  • Annual Utility Savings Of 14 SEER Base 691
  • Additional Savings Of 20 SEER Upgrade 749
  • Total Upgrade Savings Over 18 Year Lifespan 13,482
  • Less Initial Investment (8,200)
  • Return on Investment 5,280
  • Annual Return 293
  • Annual % Of Return 3.6%

In this example the Return On Investment exceeds the rate of most savings accounts and money market funds.

It is also wise to consider that most high efficiency systems will significantly reduce humidity in the home making it more comfortable and reducing potential allergens such as mold. This is a hidden benefit that can potentially reduce household and medical expenses. A high efficiency system will also add to the appraised value of your home.

If you have questions or would like Dent help in computing your return, feel free to contact us online or call (601) 300-8317.

© Copyright 2014 Dent AC, Inc.

Need a new system? Dent AC can help. Need a healthier, more comfortable life? We can change the way you feel about your home.

 

Questions? Call (601) 300-8317.

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Peace of Mind Guarantee

You don’t have to worry when you choose us. We will treat your home well and do the work properly. You can sit back and enjoy the results!

100% Money Back
Guarantee

If you are not happy with the work performed, you get your money back without hassle.

No Surprise
Guarantee

Surprises aren’t great when you’re asking for HVAC work. We’ll be honest and open about pricing and what you can expect for the process ahead.

Property Protection
Guarantee

Your property will be well protected when our team is on the job. We’ll even clean up well when we’re finished.

Comfort
Guarantee

When we leave your home, it will be comfortable. We’ll keep working until we achieve that.

Utility Savings
Guarantee

When we install or maintain your HVAC system, you will see your utility bills improve. That’s our promise to you.

$500 Installation
Date Guarantee

We will install your system on the day we say we will. If we miss that deadline, you’ll get $500 from us.

$500 No Frustration
Guarantee

If your system breaks down during the first year and leaves you without heating or cooling, we will be there within 24 hours, or we will pay you $500 for your inconvenience.

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Guarantee

If a system or part we install fails to operate correctly, we'll make it right!

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I had previously had problems with backup in my home after new gas lines were put in. I was told by Atmos that I had a leak in my pipe just recently. I was told that it was roots in my… Dorothy S.
Phillip from Dent’s was very knowledgeable, courteous patient and professional. Last Wednesday he ordered the part upon diagnosis, yet came days sooner when the part came in earlier than expected. I was glad, as it gets cold in this old house!… Presley B.
Jonathan McDonald deserves a huge thank you. Very efficient young man. Very nice. I’m very impressed with the work y’all have done since getting my new unit. I highly recommend y’all!!! Tracy S.
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