A broken air conditioner is like a medical emergency: unexpected, urgent and costly. If your air conditioner is older, you’ve got a tough decision: to repair or replace. Unfortunately, I just went through this.
I knew we would likely replace our furnace and air conditioner in the next couple of years. They are 11 years old, original to the house and not quality models to begin with. The previous homeowner had replaced several failed parts in the past three years, but the signs of a full replacement were there.
The first power bill covered just seven days after we closed on the house at the end of a typically hot Utah August. This house used more power in seven days than the one we were selling used all month. I later found out the AC motor and fan blade were replaced with parts that weren’t quite right. Not only was the blade undersized, but it was spinning the wrong way. Rather than sucking cooler air through the AC coils and blowing hot air out through the top, it was sucking air in through the top and trying to blow it out through the coils. That makes for a terribly inefficient system, which is partly why the power bill was so high. I got the blade spinning the correct way, but by then September started to cool and we didn’t use the air conditioner much.
Dreading the summer’s first power bill
Summer temperatures started to come around in the past two weeks, reaching the upper 80s. Although neighbors have run their air conditioners for weeks, my wife and I are quite happy opening the windows until the outside temp gets in the mid-80s before turning on the air conditioner. I planned to watch the bills to gauge how inefficient the AC is while running properly, and therefore how quickly I would want a replacement.
We first turned on the air conditioner two weeks ago. It was running most of the afternoon by the time I came home from work, and while the house was cool, the air from the vents wasn’t as cold as it should have been. I went to make sure the fan blade was spinning correctly. It wasn’t spinning at all. The compressor was humming like a champ, and the coils had plenty of heat to dissipate, but the fan just sat there. I did what diagnostics I could (you can YouTube anything), then called the experts.
The verdict: The fan module was bad. The technician — who works for a company we have trusted for 10 years — suggested a new motor, the correct size fan, and a new capacitor. Total charge for parts and labor: $527.
This is when I start to consider total cost of ownership. Do I want to invest $527 in a unit I plan to replace in the next two to three years and that I worry is going to kill me in power bills anyway, or do I want to put that money toward a more energy-efficient replacement today but pay the big bucks?
Weighing my air conditioner options
On one hand, I could get the repair done and monitor my power bills. Another unknown is that the tech can’t test my refrigerant pressure unless the fan is working. If it needs additional R-22 refrigerant, that could be another $85-$170 depending on whether it was low and by how much. So I could be sinking anywhere from $527 to almost $700 just to get it running properly. Then how would I feel if my power bill was through the roof anyway? Would I be able to avoid sunk cost bias and spring for a new unit this year or next, or would I put off replacement further because of that investment?
On the other hand, if I am going to replace the air conditioner, I would also replace the furnace. So I was looking at a much higher price point. I had a guy run an engineering analysis and give me a quote. He recommended I replace the furnace with a 5% more efficient model that has a two-stage blower and swap out the AC from a 13 SEER rating to a 17 SEER rating heat pump. A utility analysis suggested the new system should use about $400 less in gas and electricity based on average annual usage compared to the current setup. Of course, that assumes my current unit runs like it’s supposed to, and I know it doesn’t.
Cost for the upgrade: Just over $12,000.
That doesn’t include $750 in utility rebates (and there are no more federal tax credits), but it’s about $2,000 more than I was hoping.
To repair or to replace, that is the question
As I considered my options, I had to look at the long game. It wasn’t a matter of if I would replace these things, just a matter of when. I didn’t have time to save up for a full replacement, but luckily there is a 0% loan for 18 months with equal payments ($675/month in this case). Yes, it would mean going into debt, but it wouldn’t cost me anything more than if I started saving up cash now to replace the system in 18 months. Plus, I wouldn’t have to drain my emergency account to pay up front. That was what finally tipped me toward going with a new system.
I don’t expect to have buyer’s remorse over getting a new system I knew was coming eventually, but I may have had buyer’s remorse if I paid to repair the old unit and it was still an inefficient dog. The new units come with a 10-year warranty covering all major parts and all the labor for major and minor repairs. I won’t have to worry about a big hit on either of those things for a whole decade. That’s peace of mind.
Of course, I would rather put this money toward another investment, but this is one of the risks you accept with homeownership. It’s also why it pays to have plenty of gap between your income and expenses. It’s much better to be able to make the wiser long-term decision than be stuck with a short-term solution you may not feel good about.
I’ll continue to track my utility bills and report back when I get some comparison data.
What would you have done if you were in my shoes?