Tomorrow's HVAC System Efficiency Proposal

What if you could offer your customers a system efficiency option of 57%, 78%, or 93%? No, this is NOT equipment-rated efficiency. It’s the operating system’s field-measured efficiency after installation and verification in a home. Here’s a sample proposal of the future.

Field Measured System Efficiency

Constant advancements in our ability to field measure the efficiency of an installed system is changing our industry. The HVAC Industry’s basic foundation — equipment efficiency — is evolving into an installed system efficiency score.

The moment consumers understand equipment efficiency ratings completely depend on an installation’s measured performance, the game changes. Once such understanding happens, the equipment replacement decision shifts away from equipment rated efficiency to a far more important and essential number: the scored performance of the installed system.

While equipment rated efficiency is the maximum laboratory efficiency potential of the equipment, consumers may soon make wiser buying decisions based on what they actually will receive from their qualified contractor.

Transparency in Your Proposals

Read a few of your proposals. Do they suggest a 96% efficiency system? Or do you clearly indicate the 96% is the equipment rated capacity and in truth the final outcome of your work will be a far less efficient system? If you say yes to the last question, explain how.

This shift in the way our customers buy replacement equipment will separate the men from the boys and the ladies from the girls in our industry. Contractors with the ability to deliver the goods by diagnosing and upgrading the installed performance of the entire system will possess a distinct advantage over those who are only willing to swap the box.

The benefits of this new breed of proposal will include room-to-room comfort, much smaller and more efficient systems, and an assurance of increased “system” longevity.

Equipment Efficiency Label or System Label?

Might the efficiency label on the equipment soon be trumped by a system efficiency label? Could this evolution in our industry be possible?

New Performance-Based Proposals

Here’s the meat of this new proposal based on the verified performance of an upgraded HVAC system with equipment replacement. Interestingly, all three options include the exact same equipment: a standard efficiency split system.

Equipment Replacement Proposal

Install replacement air conditioning and heating equipment necessary to heat and cool your home. Include system renovation tasked needed to deliver the following results:

Option One —Test, diagnose, upgrade and commission your heating and cooling system to deliver a minimum verified system performance of 93%….$13,500.00

Option Two —Test, diagnose, and renovate your HVAC system to deliver a minimum verified system performance of 78%….$10,500.00

Option Three — Install replacement equipment to deliver a verified system minimum performance of 57%….$7,500.00

What To Excluded from These Proposals?

The rated efficiency and capacity of any equipment is a most obvious exclusion from this proposal.

It’s out with the old and in with the new when it comes to home and HVAC system performance.

If there are any equipment variables between the three options, reduce the needed capacity of the equipment as the price the job increases. This is because the delivered heating and cooling capacity of the system improves with each upgrade made to the duct system and greater attention given to the commissioning process.

As you can see, the focus of the proposal has shifted toward what the customer will actually receive, and away from an insinuated result based on laboratory specifications. The contractor is no longer a dealer, but has become the architect of the system. The customer can select the level of performance they desire.

The brand of the equipment is not mentioned. The manufacturer and brand of the system becomes the contractor that designs and assembles the collection of components that creates the system.

A detailed scope of work is not mentioned. Part of a performance-based sale is educational for the customer where they participate in the actual testing and diagnosing of the system. There is no need to itemize the scope of work in the proposal because the homeowner has confidence in the outcome of each option and chooses accordingly. The commissioning report at the conclusion of the job provides needed documentation the promised results were delivered.

What May These Proposals Include That Are Missing Today?

A performance-based proposal directly addresses the outcome of the job. The typical HVAC replacement proposal today does not. Today we imply that performance equals equipment-rated efficiency. However, results are all that matter to customers. Somehow, our industry surrenders all responsibility for comfort and efficiency and simply replaces equipment.

Eventually customers will experience good performance-based contracting proposals. They have done their homework and may ask you hard questions. Are you prepared?

Questions Customers May Ask

When you finally meet a customer who already has a performance-based proposal in hand offering options similar to those listed above, what will be your response when they ask you questions like the following:

• What level of installed efficiency are you offering with your equipment replacement?
• Will you test my system to see what improvements I need besides new equipment?
• Do you document and verify the results of your work?
• What level of performance does your average system deliver after equipment replacement?

If you can’t answer these questions, customers will look to others to work on their systems.

Many Other Questions

As with most changes that have occurred in our industry, we don’t know all the questions that will follow as this new approach moves into the market. One thing is for sure, today’s customers are looking for something better. Those willing to move ahead of the status-quo will have the advantage.

Rob “Doc” Falke serves the industry as president of National Comfort Institute — an HVAC-based training company and membership organization. If you’re into sharing your views about performance trumping rated efficiency, contact Doc at robf@ncihvac.com or call him at 800-633-7058. Go to NCI’s website at nationalcomfortinstitute.com for free information, articles, and downloads.