Furnace Repair or Replacement: How to Hire an HVAC Contractor and Compare Bids

Deciding: Repair or Replace?

Before you commit to a new furnace, first consider if your current system needs a repair, or if other issues in your home are causing discomfort. The U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy (DOE) created the ENERGY STAR program to help you make informed decisions about energy efficiency. ENERGY STAR suggests you call a professional contractor if your furnace or boiler is more than 15 years old. Frequent repairs and rising energy bills are also signs that your equipment may have become less efficient. Other signs that it might be time to consider replacing heating and cooling equipment, or improving your overall system, include:

• Uneven Temperatures: Some rooms are too hot or too cold. This could be due to improper equipment, duct problems, or poor insulation.
• Humidity Problems or Excessive Dust: Leaky ducts can pull particles and air from attics, crawl spaces, and basements, which can cause these issues. Sealing your ducts might help.
• Noisy System: Your heating or cooling system makes unusual noises.

If your heating and cooling equipment is more than 10 years old or not keeping your house comfortable, have a professional HVAC contractor evaluate it. If it’s not performing efficiently or needs upgrading, think about replacing it with a unit that has earned the ENERGY STAR label.

However, before you invest in a new system, make sure you have addressed any major air leaks in your house and checked your duct system. Sometimes, these are the real sources of problems, not the equipment itself. New equipment must be installed correctly, as improper installation can reduce system efficiency by up to 30 percent, costing you more on your utility bills and possibly shortening the equipment’s life.

Understanding AFUE

When looking at new furnaces, you’ll see a rating called Annual Fuel Utilization Efficiency (AFUE). This rating tells you the percentage of the heat in the incoming fuel that is converted to heat for your home, rather than being lost. For a gas furnace to earn the ENERGY STAR label, it must be rated 95% AFUE or greater in the U.S. South and 97% AFUE or greater in the U.S. North. For oil furnaces, the requirement is 87% AFUE or greater. These ratings apply to models installed and used in homes.

What a Proper Installation Involves

Proper installation is crucial for your new furnace to work efficiently and last a long time. When you hire an HVAC contractor, ask them about quality installation. Here’s what it should include:

• Correct Sizing: The contractor should use the actual characteristics of your home to determine the right-sized equipment. This is often done using a detailed calculation method called Manual J or an equivalent. They should not just rely on a simple “rule of thumb.” Oversized equipment can cycle too frequently, leading to less comfort and a shorter lifespan for the unit.
• Airflow Check: The new system’s airflow must meet the manufacturer’s performance specifications. Poor airflow can reduce efficiency, raise your utility bills, and shorten the equipment’s life.
• Duct System Inspection: Ask the contractor to inspect your home’s duct system. They should perform a leakage test and make any necessary repairs. Leaky ducts waste energy and can reduce your comfort.

Questions to Ask Each Contractor

To ensure you get a quality installation, use this checklist of questions when speaking with contractors:

• Do you offer ENERGY STAR qualified equipment?
• Will you measure my home and calculate the correct size for my equipment using Manual J or an equivalent method?
• Will you check for damage to existing ductwork and duct insulation and make repairs if necessary?
• Will you provide information on any local rebate programs I might be eligible for?
• Will you show me how to replace the air filter?
• After installation, will you leave all manuals and documentation of installation procedures, including sizing calculations like Manual J?

Choosing a Contractor and Comparing Bids

Expect a thorough home evaluation. A good contractor will spend significant time inspecting your current system and home to understand your needs. They should size the heating and cooling system based on the size of your house, the level of insulation, and your windows. A good contractor will also inspect your duct system for air leaks and insulation, and measure airflow.

When comparing the written, itemized estimates (bids) from different contractors, look beyond just the price. Compare the overall cost, the energy efficiency of the proposed equipment, and the warranties offered. The lowest price may not be the most advantageous if it’s for equipment that is less efficient, because your energy costs will be higher over time.

What to look for in a contractor:

• On-site inspection: A reputable contractor will perform an on-site inspection of the work you want completed.
• Detailed bid: They should provide a detailed bid in a timely manner.
• Licensing and insurance: The company should be licensed and insured to repair and install heating and cooling equipment. Many states require this.
• Experience: Look for a company with several years of experience in your community.
• References: They should be able to provide examples of quality installation work, with names of customers you can contact.
• Documentation: The contractor should leave all equipment manuals and provide documentation of installation procedures, including sizing calculations.
• Maintenance explanation: They should clearly explain the benefits of regular maintenance and help you set up a schedule.

Signing the Proposal and Payment

Before any work begins, both you and your contractor should sign a written proposal. This document protects you by clearly stating what work will be done. It should include:

• A detailed list of all work being contracted.
• Where the equipment will be installed.
• All products specified by quantity, name, model number, and energy ratings.
• The manufacturer’s warranty, equipment documentation, and any contractor installation warranty information.
• The payment schedule.
• The scheduled start and completion dates.
• A description of how disputes will be resolved.
• The contractor’s liability insurance and licenses if required.
• An outline of any necessary paperwork and permits for the project.

Regarding payment, the Federal Trade Commission (FTC) advises against paying the full amount upfront. Some states limit how much a contractor can ask for as a down payment. Never make the final payment until the work is completely done and you are satisfied with the results.

When this advice may not fit

This advice is for homeowners needing to decide on furnace repair or replacement and how to hire a contractor. If you are dealing with a furnace that uses gas, or if the issue involves your home’s electrical panel, you should not attempt any repairs yourself. These types of work require a qualified professional due to safety risks. If your home has structural issues, or if you suspect the presence of lead paint or asbestos, consult specialists trained in those areas. Your homeowner’s insurance company may also offer guidance or require specific procedures if the issue is related to an insurance claim.