How Much Money Can a High-efficiency HVAC System Save Me?

The outside unit on your twelve-year-old HVAC system has stopped working — again. 

Decision time: repair or replace?

The average life expectancy of the outdoor unit of an HVAC is 13-15 years. Chances are this is the start of the repair-heavy demise of your HVAC system. The HVAC service contractor you contacted suggests that rather than just replace the outdoor unit, consider an upgrade to a high-efficiency system. 

Experts usually recommend replacing a malfunctioning HVAC system with a new one if it's over 10 years old. For maximum energy efficiency, that means upgrading all units at the same time — whether that’s the furnace and the air conditioner or the heat pump and air handler.

Your head explodes when you see the quote for a complete system upgrade. Without a doubt, it would be cheaper to repair the current system by replacing the outdoor unit and any other components as they break.

Although the repair is cheaper in the short run, this might not the best decision for your wallet in the long run. Let’s examine how an upgrade to a high-efficiency system can be worth the higher upfront costs.

What does high-efficiency mean?

Energy efficiency is measured by the amount of energy the HVAC system needs to consume to produce cooling or heating output. For air conditioners, energy efficiency ratings are calculated by simulating a typical season of outdoor temperatures that range from 60 degrees to over 100 degrees Fahrenheit. The value of the system’s cooling capacity divided by the amount of energy required is called a seasonal energy efficiency ratio or SEER rating. 

A higher SEER means a more efficient HVAC system and more savings on your monthly electric bill. Air conditioners manufactured before 2006 have a SEER rating of 10 or less. The minimum rating for newer air conditioners installed residentially is 13 to 14 SEER. The ratio can go as high as 25 SEER.

The measurement of the efficiency of a furnace is called the annual fuel utilization efficiency (AFUE) rating. A higher AFUE means a more energy-efficient furnace. The AFUE range for new furnaces starts from 78 percent, with ratings for the highest efficiency furnaces at over 90 percent.

How much can I save by upgrading to a high-efficiency HVAC system?

Upgrading to a new HVAC system is a high-dollar expense. Does the savings in monthly energy bills offset the upfront costs? According to the U.S. Department of Energy, you could save 20 to 40 percent on your home cooling costs by upgrading from an old 10 SEER air conditioner to a new system. 

Lennox, a leading HVAC manufacturer, has an easy-to-use, customizable energy savings calculator on its website which gives estimates based on the U.S. national average. You can use it to calculate the amount of savings you might see from upgrading your current air conditioner or furnace to a new system.

For example, according to the calculator, upgrading from a 10 SEER to a 13 SEER system will bring you a 23 percent savings per year. That translates to $375 saved over five years, $750 over 10 years, and $1125 after 15 years (the average life of the system). 

The higher the upgrade in SEER rating, the more you can save. Upgrading from a 10 SEER to a 15 SEER HVAC system could create 33 percent annual savings on your heating and cooling costs. If you double the upgrade on the SEER rating from 10 to 20, you could see your energy use cut in half.

The Lennox calculator also gives energy savings estimates for furnaces. Upgrading from 60 AFUE to 80 AFUE saves 25 percent per year on home heating costs. You could save $2506 over five years, $5012 over 10 years, and $7518 over 15 years.

Remember that these numbers represent the maximum savings consumers can get from a high-efficiency system. How much you could save with an upgrade to a high-efficiency system will depend on the proper installation of the right size HVAC system, how you use your HVAC system, and how well you maintain your equipment. 

With HVACs, bigger is not always better

The higher the SEER or AFUE rating, the bigger the system’s price tag. For every consumer, there’s a purchase price upper limit where the additional upfront cost for a high-efficiency system won’t be recouped by the monthly energy savings. That’s why it’s important to find a trusted, experienced HVAC contractor to evaluate your needs, recommend the right size heating and cooling system, and do the installation. 

Bower Heating and Air Conditioning is a family-owned business that has been serving the S.W. Virginia area for over 30 years. If you need the services of an HVAC company for a system upgrade, repairs, or maintenance, please contact us through our website,, or call us at (540) 904-7600. 

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