Southside Heating & Air
Conditioning

Jan 7 Cheapest Furnace Available, or Best Value on Furnace

The new year has seen a small shake up of how to get a top of the line furnace for a bargain basement price.  Everyone is always looking to make sure that they do not spend too much on getting a new furnace or air conditioner.  Before you do get all the bids for new equipment make sure that you realize that installing the cheapest may cost you the most.

Rebates have always been a great incentive to put a higher efficient system in your home.  That is why the utility companies offer them.  They are actually required to set aside a certain amount of funds to incentivize customers to install more efficient equipment when the time is due.  For our area most of our customers have Centerpoint for their gas supplier and XCEL for their electric supplier.  Some folks south of us are on Dakota Electric or other electric co-ops and will need to investigate their own rebate schedule to ensure they have accurate numbers.  This year Centerpoint has set the same schedule as last year with furnace efficiency.  They will give $150 for a 92-93.9% efficient furnace, $300 for a 94-95.9% efficient furnace, and $400 for a furnace with an efficiency 96% or greater.  Install a new programmable thermostat with any of these furnaces and Centerpoint will rebate you another $25.  XCEL has a slightly improved schedule this year lower their minimum standard air conditioner to 13 SEER for a $150 rebate.  Their next two tiers of rebates are the same efficiency at 15SEER/12.5EER  and 16SEER/13EER.  The rebate amounts increased slightly to $350 and $450 respectively though to offer a bit more back for high efficient equipment.  XCEL is also offering a $100 bonus rebate for installing a furnace with a variable speed blower motor which they have not done in the past.

Another rebate schedule you may be able to make use of are manufacture’s rebates.  Currently as of this blog writing there are no manufacture’s rebates available.  They typically offer them in the spring and fall with some of them offering other seasonal packages.  If you are looking to replace before your system has failed, we encourage you to ask about any programs that may be available either now or in the future.  If your system has failed and needs to be either repaired or replaced now you may not be fortunate enough to be in a rebate period.  One thing to consider if your furnace is over 15 years old or your ac is over 10 years is getting a proposal for a new system.  You do not need to purchase anything now; but would you rather be prepared in case you do need to buy or just hope for the best?

Tax credits have come and gone over the last couple years.  Sometimes they are big, sometimes they are small.  This year we are getting a couple that are even retroactive to last year.  If you purchase a 95% or better furnace you can claim $150 from your Federal Taxes.  Put an ECM variable speed motor into the furnace and it will get you another $50 credit.  A 16SEER/13EER ac will be good for $300 off your federal taxes.  A tank less water heater will now earn you a $300 credit.  These additional tax credits help bring a new system down to an even more attractive price.  As always, consult your tax advisor on your ability to claim these credits.

Putting this all together and speaking in general terms we can compare a high efficient system with a standard efficient one.  A standard efficient furnace may cost $3000 and the same amount for a minimum 13 SEER ac.  You would earn this year a rebate from XCEL for $150 bringing your final cost of installation to $5850.  If you upgrade a to a 96% efficient furnace with variable speed blower it might cost you $4250.  A matching air conditioner that will achieve better than 16SEER and 13EER might cost the same $4250 bringing the install price of that system to $8500.  This higher efficient system would earn a $400 furnace rebate, $25 programmable thermostat rebate, $450 air conditioner rebate, $100 ECM blower motor rebate, $500 Federal Tax Credit, and whatever manufacture rebate happens to be available.  The rebates and credits total to $1475 before any manufacture’s rebate bringing your final cost from $8500 to $7025.  If you were to consider a Lennox system using even last year’s rebate schedule for this system it would be $800 and the air conditioner would be a solar ready model earning an additional $600 Federal Tax Credit bringing your out of pocket cost to $5625.  Looking at all the numbers you can install a 96% efficient 2 stage furnace with variable speed blower along with a 16SEER/13EER or better air conditioner for less than an 80% single stage furnace and 13SEER/11EER air conditioner at certain times during the year.  That is before you start taking into account all the energy savings you can earn over the lifetime of the system.

Cheap and least expensive are two different things.  Make sure you understand the difference when you are looking at not only a furnace or air conditioner but for any major purchase.

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