Most don't have a payback if the cost of electricity is too high. Let's make them lower cost up front and lower running costs so it's a no brainer when replacement is due.
2-3 hours planning, parts list, client management,
4-6 hrs to run electrical,
2-4 hrs to mount condenser,
4-8 hrs for medium line set,
4-8 hrs air handler, duct, platform integration,
1-2 hrs with thermostat and condensate protection,
1-2 hours nitrogen testing and pull vacuum,
1 hr documenting photos for incentive programs,
1 hr spending time educating customer about the system.
Messing up a parts order and figuring out a solution 4 hrs too often.
Total: 28 hrs, or 2-3 days of 2 people depending on the travel from their shop to customers home. I agree. Let's get that down to 12-16 hrs or single day and the best shops and installers can do that.
CA Labor law allow about 6-7 hrs of work on site as installers often have to start at their shop.
$3-4k of labor cost for small-mid size. Best might be be 2-3K labor cost. Minor equipment 1-2K, permit and testing required $1K. Then 50% gross margin is the target, net costs $2.5K indirect labor, $2K sales cost, project management, trucks, insurance, software, 10-20% net margin.
Some are trying to cut HVAC install costs in half, and a lot of people are already working on it including Jetson (where the author works) and disclaimer my company Electric Air.
Average install is about $20K in California (varies by state). Here’s how that usually breaks down:
- Equipment: $3–5K for a basic swap (some go up to $10K for single system)
- Direct labor: $3–4K (about 15–20%)
- Materials: $2–3K
- Permits and testing: around $1K total
That leaves about a 45% margin to cover overhead:
- Indirect labor: $2.5K (installers when not installing, install managers, attending city inspector visits, call backs when installers make mistakes)
I'm not sure if you're going to get downvoted here for the advertisement (not by me because I find it useful and interesting), but can you be specific about what "streamline direct labor" means? Also, with the virtual site visit, are you guaranteeing the customer that the estimate you give virtually will be the ultimate price?
Any chance you can you take on solar next because if we could get a solar system for half the price we'd sign right up. All we hear about is how cheap solar is now, but the labor costs have risen more than any hardware price decreases.
Yeah, really trying not to advertise. But add disclaimer. Thanks for letting me know it's a bit much. I tried to tone it down. Let me know if it's better or i should delete.
streamline labor: Aligning pay incentives with installers, ensure right parts and materials, make sure customer are not indecisive on the first day, mimic the 15% of installs that are side jobs as much as possible.
Virtual site visits aren't 100%. But allows us to get a price quickly, and check electrical capability. It's a bit of a test for customers, if they are interested in snapping 5 or so photos, they probably won't buy from us.
Half the time, we then go out for a site visit in-person but we're only visiting 50% of the customers. It's less expensive, however our conversion rates go down because we're not winning the customer with our personality, etc.
If we can verify directly from photos and go straight to contract, we send out a install manager to confirm after the signature. Basically, if some giant obstacle that will stops the install, we can cancel at no cost to the customer and we do that all very quickly so they can select another bid if that happens.
Solar is tough, I am a renewable energy engineer from Australia and yes, we can half the cost of solar as seen in Australia. I think Australian are simply less fussy and legally charged than governments and home owners in US and simple installs.
I now believe large central PV will likely be more successful here. 40% of electricity is often coming from solar and wind in CA and we can just keep doing that and we'll be fine.
> streamline labor: Aligning pay incentives with installers, ensure right parts and materials, make sure customer are not indecisive on the first day, mimic the 15% of installs that are side jobs as much as possible.
When I read "aligning pay incentives with installers" I remember this story.
A friend who worked in sales said the union laborers would always insist the job takes more days than it actually took. If he budgeted them for one day because it takes one day, they'd drag ass so they would have to come back the next day to finish, which upset the customer since it was an unexpected delay.
But if he wrote two days into the contract they'd finish in one day and just drag the second day out.
Ground source is often the only choice here. While air source can technically work well down to these temperatures, much of the available equipment doesn't suit some homes.
The latter was a surprising (to me) source of heat leakage. As part of the whole effort we had the house examined in detail for heat and air leakage, including using IR imaging and one of those things with a fan that replaces an exterior door to change the internal pressure to find/quantify air leaks.
If we’re trying to bring down cost the this is the issue with so many contractors coming out. The cost of sales is about 10-15% of the installation in the US. So thats $2-3k in California per heat pump
Try to get an install for $600 like in Japan when you have to pay $2k to find the customer.
Let’s have a lower cost sales process. Review 12 companies online, pick top 3, ask them to come out.
Yeah in case it wasn’t clear - I wasn’t asking a million vendors to price the job, I was asking them to do a manual J so they could price the job. It took 12 to get 4 to do the manual J. The other 8 came on-site and then refused to do the calcs even though I told them before coming out that it was a prerequisite for me to consider their quote.
I got a variety of explanations for why they weren’t going to do it, most of them along the lines of ‘I’ve been doing this forever - I know what I’m doing,’ but a few disappointingly ‘I don’t know what a manual J is.’ Again, this was AFTER my telling them over the phone that I wouldn’t consider a quote that wasn’t based on the calcs.
Yep, the cost is in the trip is a big factor but sounds like it was their choice to try to sell you. You did the right thing by asking them do the calcs before they came out. Millions of questions are time consuming and costly but better than someone rushing into and pausing mid project with in-decision.
We (I'm cofounder of Electric Air, HVAC contract) have had people pause on day one of install, and that ends up costing the company $10-20K due to delays. Mostly because there isn't something for the team to do for that day or two while we scramble to line up the next customer.
I've had a similarly frustrating experience trying to get contractors to redo my gutters.
They seem fine with the gutter part, but once I explain my rain collection system and my requirements around specific downspout sizing and simultaneous overflow, they just seem to have no interest in doing the bit of work required to make it all fit together.
Wild that you put it on the customer to reduce the sales cost.
I can see it being reasonable to explain during the initial contact that you want the standardized estimate, once that happens it's not really on the customer if the contractor goes out to chase the business even if they know they aren't going to do it.
You are right! I was unfair. The customer was clear they wanted ManJ calcs.
It's not the customer's problem to reduce cost. The high cost is the customer's problem through even if they are not to blame. And given I have a first hand experience in the cost stack of HVAC company, I would happy to share how a HVAC contractor thinks.
We account for duct losses at Electric Air when sizing. It’s baked into industry standard Manual J sizing calculators and other methods. ManJ isn’t perfect find for this purpose.
In this case, contractor should have advised the heat pump would not keep up and recommended a different solution.
You're right; 80% of US homes are single-family with forced air and ducts. Most heat pumps are swap-in replacements for these systems. One central air handler is connected to ductwork and vents to distribute the heat and cooling—one outdoor unit, with refrigerant lines connecting the indoor and outdoor units.
Europe has more hydronic/radiator mono-block heat pumps, with no refrigerant work needed in the field, which makes them easier to retrofit, assuming all the other plumbing is in place. Refrigerant work requires more training due to the high pressure and the potential for the high-GWP refrigerant.
Make them easy to buy and install leading to lower costs, and more getting into homes.