Checklist

We have rated area heating and air-conditioning firms on our Ratings Tables. At the time of our last full, published article, twenty of these firms were rated "superior" for "overall performance" by 90 percent or more of the customers who rated them on our customer survey. But 30 scored much lower, receiving such favorable ratings from only 60 percent or fewer of their surveyed customers.

We also found big price differences. For example, for one specific job, prices ranged from $170 to $662, and for another, prices ranged from $362 to $900. Although most consumers surprisingly don't get competitive bids even for costly jobs, getting more than one bid will save many homeowners hundreds, or thousands, of dollars.

If you will need new equipment installed, get several firms to give you written proposals. Compare their proposed designs. How well your system is designed might affect how quickly and uniformly your house is heated or cooled, how much energy it will take to do the job, how much noise and vibration you will experience, how troubled you will be by drafts, how much closet or attic space the system will consume, how easy the system will be to maintain, and other important aspects of performance.

For an installation contract, ask for performance guarantees promising how warm your house can be kept—or how cool in the case of air-conditioning equipment—and how uniform the temperature within the house will be when the outside temperature reaches a specified level. Also, be sure that your contract is clear about the firm's responsibilities on such matters as providing an electrical supply and hooking up your equipment to the electrical panel; providing drainage for condensate; enclosing ductwork and painting and patching holes; and other matters.

Heating and air-conditioning firms are likely to encourage you to have annual professional maintenance visits and many will suggest that you enter a maintenance contract. It is not clear that such frequent professional service is needed so long as you are diligent about the most important maintenance task: replacing air filters whenever they get dirty. The case for frequent professional maintenance is strongest if your system is old, it is used heavily, there is much dust and pollen in the area, you have frequent breakdowns, or you have a large house, where the energy savings that might result from frequent maintenance will pay for the cost of the maintenance. Before entering a maintenance contract, get price quotes from several firms and check exactly what each contract covers. For basic maintenance, not including costs of any parts or costs of labor for needed repairs, we found prices ranging from less than $100 to more than $300.

If you are considering buying new equipment, be skeptical about claims of cost savings from more energy-efficient equipment. There may be substantial savings, and there are compelling public-interest reasons to install efficient equipment. But some firms are prone to exaggerating the size of the savings—in order to sell new equipment, or more expensive equipment. Get several firms to make proposals, ask for documentation of how much you will cut your energy bills compared to what you now have, and ask questions. In this article, we suggest some software you might use to do your own comparisons and we give you examples of the effects of energy-savings for different options for an illustrative home. For many area homes, the best option may include a heat pump.

Getting Quality Work and Advice

You'll find ratings of area heating and air-conditioning services on our Ratings Tables. The customer survey ratings on the table show how surveyed CHECKBOOK and Consumer Reports subscribers rated firms they had used. (For more information on our customer survey and other research methods, click here.)

As you can see from our Ratings Tables, there are many firms in the Delaware Valley area that consistently provide high-quality work. At the time of our last full, published article, twenty of the listed companies were rated "superior" for "overall performance" by 90 percent or more of the customers who rated them. But our Ratings Tables also reveal that some heating and air-conditioning customers get burned by shoddy service: 30 companies received such favorable ratings from only 60 percent or fewer of their surveyed customers.

Unfortunately, customers can't spot all differences in quality. You probably won't know, for example, if the reason your energy bills are a little higher than necessary, or your system doesn't last as long as it should, is that a contractor failed to correct a problem or used the wrong parts. But customers can be expected to spot major problems—if energy bills are substantially higher than they should be, the furnace doesn't warm the house, the air conditioner doesn't cool, or the system simply doesn't run. And the comments we've received on heating and air-conditioning services indicate that many consumers do in fact identify lousy work—

• "Installed new air conditioning unit. Unit did not work the following year. Called service rep. Two different reps came out, neither could fix the problem. Contacted another company. Fixed on first visit."
• "Because of ordering the wrong equipment, poor interoffice communication, and some work that was sloppy, it took them five visits and many weeks to do a job that should have been done in two visits."
• "They TOTALLY destroyed my bedroom ceiling. They installed a new unit and never installed the pan to collect and drain excess water, so it leaked and ultimately ruined my ceiling, walls, carpet, and some personal belongings. They deny any fault and I am still fighting for reimbursement for damages that they caused and refuse to fix."
• "This service operation is just a front for the sales team. The service team showed up on time, told me I needed to replace my entire AC unit and had the sales team at my home in 20 minutes. Luckily, I held out for a second opinion and [the other company] fixed my problem for less than $100 and it's been working fine since then."
• "I am still waiting for my air-conditioning unit to work—they installed it 11 days ago. They were initially pleasant and got people out promptly to install the unit, but…have given me the run-around ever since. What a nightmare."
• "ALWAYS trying to sell something extra."

In addition to ratings from customers, for firms that were evaluated in our last full, published article, our Ratings Tables show counts of complaints we gathered from local Better Business Bureaus (BBB) for a recent three-year period. Where we were able to, we have also reported on our Ratings Tables a complaint rate for each firm, calculated by dividing the number of complaints by our measure of the number of full-time-equivalent employees who perform residential work for the firms. These complaint rates are intended as a rough way to take into account volume of work and the fact that firms that do more work are exposed to a greater risk of incurring complaints.

You can check current BBB complaint information on any firm by contacting the BBB where the firm is located (see below for contact information). For firms listed on our Ratings Tables, in the details under the firm's listing, click a link to the local BBB to go directly to the BBB's most up-to-date report on any complaints about the firm.

The information on our Ratings Tables will help you identify high-quality companies, but to get good work at a reasonable cost, you'll also need to think carefully about what work you need done, and you'll need to deal carefully with the firm, or firms, you choose.

Getting Repairs

When you need repairs, our ratings of services on our Ratings Tables will help you find a good company to turn to for help.

Call one or more firms and describe the symptoms—what the system is doing and not doing. Companies may be able to tell you over the phone what's likely to be wrong and give you a price. If so, try to get quotes from several firms. Click here to see a figure explaining how central air conditioning works.

If your system just doesn't work and you can't determine exactly what has to be done, you will have to arrange for a service call and you probably won't be able to get a price before paying for a firm to come to your home. Your best bet is to select a firm that our Ratings Tables show has relatively high ratings on our measures of service quality, has a relatively low price index score, and has a relatively low minimum charge for a service visit.

The price index scores on our Ratings Tables show how each firm compared to other firms on at least two, and in most cases three or four, small jobs we had them bid on. The average price index score is $100. A price index score of $110 tells you that a firm's quotes were 10 percent higher than the average of all the firms that bid on the same jobs; a score of $95 means that its bids were five percent lower than the average. These price index scores are a useful predictor of the relative price levels you might encounter at different firms, but firms' relative price levels, unfortunately, are not always consistent; a firm with relatively low prices on some jobs might turn out to have relatively high prices on other jobs.

Since there is a good chance you won't be able to get a price quote in advance of a service call, shopping for price will be difficult. You can have one firm come to your home, diagnose the problem, and give you a written estimate detailing the work that needs to be done. Then, with the estimate in hand, you can call other firms and ask what they would charge for the repairs, assuming that the diagnosis is correct.

But other firms may be reluctant to give quotes based on the first firm's diagnosis. Also, if you use another firm, you will have to pay the first firm's minimum service call charge, which it might be willing to apply to the repair bill if you were to go ahead and have it do the repair. In addition, getting other quotes will be less convenient than having the repairperson in your home proceed with the work.

If the repair estimate is not more than a few hundred dollars, you will probably decide to have the firm in your home go ahead immediately. If you have chosen a firm with a low price index score, there's a good chance that the price you will pay will at least be reasonable.

If the estimate is more than $500 or so, it will likely pay to get more quotes. We found, for example, that for one repair job we shopped with an average price of about $500, getting three quotes would have cut the repair cost by, on average, about $100 compared to going with the first quote. Depending on which firm we happened to get a price from first, subsequent quotes might have saved us nothing (if the first quote was very low) or might have saved us several hundred dollars (if the first quote happened to be relatively high). You won't know how low or high the first quote is until you get additional quotes.

If the firm that comes to your home to give you your diagnosis has a relatively high minimum service call charge and will apply that charge to the price of the repair, then it will be difficult for you to save much by going with another firm. You give yourself maximum flexibility by choosing for the initial service call a firm that has a relatively low minimum service charge. our Ratings Tables show that there are some firms with minimum charges of $80 or less, though others have minimums of $120 or more.

However you go about shopping for a repair job, there are other steps you can take to help you get good repairs at a reasonable cost.

• Describe symptoms in as much detail as possible before the technician comes out.
• Ask the firm to explain how it calculates service charges (so they know that you know what to expect).
• Be sure to get a written description of needed work and a price estimate before work begins.
• Ask to have replaced parts left with you.
• Be around but not in the way as work proceeds.
• Get a detailed invoice, including:
• A description of the symptoms that precipitated the repair call.
• A list of all parts replaced.
• An itemization of all labor charges and description of the labor required.
• A notation of the temperature at the plenum of air-handling equipment and the return before and after the repair.
• If repairs are to an air conditioner or a heat pump, a notation of the pressure of the refrigerant in the air-conditioning lines and a notation of the running amperage reading of the system before and after the repair.
• The warranty on the work done.
• Pay using a credit card. If you are dissatisfied with the work, you'll have the option to dispute the charge under the Fair Credit Billing Act.

Getting New Equipment

If your equipment breaks down beyond recovery, you'll want to get the best possible price and quality of replacement. If your home doesn't have central air conditioning and you want to add it, or if you want to extend a heating or cooling system, making the right decisions is even more important.

A new system's performance and cost will depend heavily on how carefully you think through the design. Some of the same issues also arise if you are just replacing a major component such as a condenser unit.

Invite several firms to your home to give you written proposals. Ask each to explain whether it's desirable to have more than one separate heating or cooling system and more than one thermostat, whether you'd get a lot of benefit from equipment features such as variable speed blowers (see below), how ducts will be run, where and how a condenser unit and the blower will be mounted, how you'll get access to the equipment for maintenance and filter replacement, and other design questions.

Good solutions to these questions will affect how much noise and vibration you experience, how quickly and uniformly your home will be cooled or heated, how troubled you'll be by drafts, how much energy your system will consume, how disruptive the installation process itself will be, how much closet, attic, or outdoor space the system will require, how disfiguring the ducts and air supply registers will be to the appearance of your home, and how difficult the system will be to maintain.

Choosing Equipment

Ask each firm which makes and models of equipment it will use. Ask about the capacity, energy efficiency, and sound ratings of the equipment. Most firms can offer equipment at several different quality levels. Ask each to explain the pros and cons of the equipment alternatives and invite each to comment on the equipment being offered by its competitors.

Selecting the Right Size Equipment

You'll want to make sure that the equipment you buy is properly sized to your home. Undersized units won't be able to heat or cool spaces efficiently. But bigger is definitely not always better. An oversized unit will cost more, and will cycle on and off constantly, thus boosting your utility bill, making more noise, requiring more frequent maintenance, and dying sooner.

When writing proposals for new equipment installation jobs, firms should perform a load calculation to determine the right size of equipment for the home. Simply relying on a home's square footage or the size of unit already installed won't cut it; to size equipment properly, installers have to take into account several other factors, including the amount of space that needs to be conditioned, the area's climate, the home's insulation levels, air leakage levels, and the energy efficiency of the equipment options in the proposal. Make sure any company that bids on your installation work performs a load calculation using the Air Conditioning Contractors of America's "Manual J" to size equipment and "Manual D" if you will need significant ductwork.

The size of heating and cooling units is described as their capacity. For furnaces and heat pumps, capacity is the amount of heat a unit can generate, and is measured in British Thermal Units (BTUs). For air conditioners (and heat pumps operating in cooling modes), capacity is measured in BTUs, but is expressed as the amount of heat units can remove. The capacity of cooling units is usually described in "tons," where one ton equals 12,000 BTUs—for example, a 36,000-BTU air conditioner is a "three-ton unit."

Selecting for Energy Efficiency

The energy efficiency of heating and cooling equipment is measured in a number of different ways, depending on the type of equipment and/or the function to which it applies.

• Furnaces (both gas and oil) are rated by their Annual Fuel Utilization Efficiency (AFUE). The range of AFUE ratings for new furnaces is from 78 to about 97, higher being more efficient. The simplest way to explain the AFUE rating is to say that, for a furnace with an AFUE rating of 90, 90 percent of the gas or oil it uses each year is not wasted and 10 percent is wasted.
• The efficiency of both air conditioners and heat pumps in cooling mode is measured by the Seasonal Energy Efficiency Ratio (SEER). For new, central air conditioners and heat pumps, SEER ratings can range from a minimum of 13 to about 21, higher being more efficient.
• The efficiency of air-source heat pumps in heating mode is measured by the Heating Season Performance Factor (HSPF). The range for new heat pumps is from a minimum of 7.7 to about 10, higher being more efficient. The efficiency of a heat pump will fall as outside temperatures fall, and when the outside temperature falls below 40°F or so, the energy efficiency of most models of heat pumps will be so low that it is generally best to use another heat source to maintain the desired temperature inside the home. One solution is to have the heat pump equipped with a backup electrical resistance heater. But this means that at low outdoor temperatures, you are heating your house with what is in effect a very large electric space heater, and your electricity bill could skyrocket. An alternative is to have a heat pump backed up by a furnace. These configurations, referred to as "hybrid" systems, rely on a heat pump to heat the home until it can no longer do so efficiently, at which point a furnace takes over.
• The efficiency of ground-source heat pumps (sometimes referred to as geothermal heat pumps, described below) in heating mode is measured by their coefficient of performance (CoP). This number measures how much more efficient than electrical resistance heat (which is not very efficient) the heat pump is. In cooling mode, efficiency is measured by the energy efficiency ratio (EER), which is similar to the SEER measure used for conventional heat pumps. For both the CoP and EER measures, the higher the number, the more energy efficient the unit. Ground-source heat pumps have CoP ratings from 2.8 to a little over 5.0 and EER ratings from 13 to over 30.

More efficient equipment costs more. For many homeowners, concern for the environment and worries about finite energy sources will be sufficient motivation to lay out the extra money, but for those for whom personal dollar cost is the dominant consideration, three other factors sweeten the pot: lower power bills, utility rebate programs, and tax incentives.

Since energy prices fluctuate so unpredictably, it's difficult to predict accurately future savings from installing more energy-efficient heating and cooling systems. But even if you calculate energy savings based on recent energy costs, you'll probably find that you can reduce utility bills—especially heating costs—significantly by installing more energy-efficient equipment. It makes sense to calculate whether or not these energy savings are enough to cover the extra costs of more efficient equipment.

Doing this math isn't easy. Every home is different and any formula has to take into account size of area to be heated and/or cooled, insulation levels, the temperature settings used by occupants, whether a programmable thermostat will be used, and other factors. It is possible to do these calculations using available software, but to use such software a lot of information about the home has to be entered before the relative savings can be figured, and it's more work than most contractors providing free installation estimates are willing to do.

Contractors should be able to help by simply estimating what percent off utility bills you'll save from picking different types and models of equipment, for example, Furnace A versus Furnace B. You can then add up your energy bills for the year and figure out how much you'd save by picking the more efficient unit. Ask high-rated companies to provide these estimates and then compare claims you get, asking for clarification when you get conflicting information.

Be wary of salespeople who do use calculators to provide on-the-spot, dollar-figure savings. These estimates are often overly rosy. Heating and air-conditioning manufacturers enthusiastically provide contractors handy formulas and devices that dramatically overstate the case for upgrading to more efficient equipment, since doing so means more consumers will be influenced to replace older equipment with new equipment—and with the most expensive new equipment—rather than just repairing what they have or opting for less expensive models of new equipment. If you're given an estimate of annual savings that seems too good to be true, it probably is.

If you're uncomfortable with these types of ballpark estimates and would lose sleep not knowing just how much you'd save by spending an extra $1,000 on a more efficient unit, there are several software tools that can estimate these savings. Some require a degree in engineering to operate, but others are quite user friendly. Some can be downloaded or used online for free and others must be purchased.

To perform these types of calculations well and spit out estimates of annual energy usage for equipment with various efficiency ratings, the software will have to ask for the specifics of where you live, your home (size of area to be cooled, number of stories, building materials, insulation levels, number and types of windows and doors, estimate of air leakage, etc.), and an estimate of per-unit energy costs from your local utilities.

One free tool you can use is Home Energy Saver (http://hes.lbl.gov), a program of the Lawrence Berkeley National Laboratory. It should be noted, however, that Home Energy Saver currently does not calculate costs for hybrid-heat-pump systems or ground-source heat pumps, an unfortunate gap since for many area residents these designs may be their most energy efficient solutions. Another software package we like is Architectural Energy's REM/Design (www.archenergy.com). The software costs $327 to download, but as of this writing, a full, free 60-day demo version of it was available for download. It was one of the few software packages we could find that wouldn't require an MIT grad to show you how to use it, yet was equipped to perform accurate, meaningful analyses.

On Table 1, we show you, for an illustrative home in the Delaware Valley area, the kinds of options a homeowner might consider when confronted with the need to have his or her furnace repaired:

1. Repair furnace ($1,000) and keep existing air-conditioner;
2. Replace furnace with a minimally energy-efficient model and keep existing air conditioner for another six years; then replace the air conditioner with a minimally efficient model;
3. Replace furnace with an efficient (95 AFUE) model and keep existing air conditioner for another six years; then replace air conditioner with a minimally efficient model;
4. Replace furnace and air conditioner with minimally efficient models;
5. Replace furnace with a minimally efficient model and replace air conditioner with an efficient (19.0 SEER) model;
6. Replace furnace with an efficient (95 AFUE) model and replace air conditioner with a minimally efficient model;
7. Replace furnace with an efficient (95 AFUE) model and replace air conditioner with an efficient model (19.0 SEER);
8. Replace furnace and air conditioner with a hybrid system that uses a high-efficiency air-source heat pump backed by a gas furnace; and
9. Replace the furnace and air conditioner with a ground-source heat pump system (see below for further discussion of these energy-thrifty devices).

We estimated costs under each option for six years, 12 years, and 18 years (a typical life span of most furnaces, air conditioners, and air-source heat pumps). For each of these three time periods, the table shows the costs of new equipment plus costs for energy. The costs for equipment include the federal tax credit (if applicable) and are pro-rated over an 18-year life span. We estimated the energy costs based on recent utility costs, and we estimated equipment costs from the lowest bids we received from a handful of firms that we asked to bid on various equipment options. It is important to note that the cost figures don't take into account inflation or forgone interest on money invested in equipment.

We have estimated that the lowest cost option (other than the very-high-investment ground-source heat pump option) looking out six years would be to replace the existing furnace with an energy-efficient model and to keep the existing air conditioner for another six years before replacing it. Looking out 12 years or 18 years, the lowest cost option would be to replace the existing furnace and air conditioner with a hybrid system that uses a high-efficiency air-source heat pump backed by a gas furnace. That would save this particular household over $1,000 compared to any of the other options on the table over 18 years, and over $450 over 12 years.

As Table 1 shows, the higher price tags of more efficient equipment are usually recouped. Comparing some of the options, we see—

• In this home, if the homeowner didn't want to invest a lot of money in a new furnace and heat pump, it would make sense at least to upgrade the furnace rather than repairing the old one. Moving from an old furnace with a 70 AFUE rating to a new one with a 95 AFUE rating would save the homeowner about $351 per year, or $2,106 over six years, in heating bills and would avoid the estimated $1,000 cost of making the furnace repair—a total savings of $3,106. That compares to a cost of about $3,698 for a new furnace after tax credit. And if we pro-rate that new furnace cost over an expected life of 18 years, the six-year portion is $1,233. Spending a pro-rated $1,233 on a new furnace seems like a pretty good deal to save $3,106—a good enough deal to be pretty confident it is worth taking even in the face of uncertainties about the various assumptions in our estimates.
• If the homeowner were just replacing heating equipment, and wanted to consider options other than heat pumps, it would make sense to look at spending more for a high-efficiency 95 AFUE furnace upgrade rather than the lowest efficiency furnace currently available (78 AFUE). The extra cost after tax credit for the more efficient furnace would be $1,448. The energy savings from the more efficient furnace compared to the less efficient one would be $216 per year, or $1,296 over six years, $2,592 over 12 years, and $3,888 over 18 years.
• An investment in relatively efficient air-conditioning equipment would also pay for itself, though not so quickly. In our example, the homeowner would have to pay $680 extra after federal tax credit to upgrade to a SEER-19 air conditioner instead of the minimum available SEER-13. The energy savings with the more efficient equipment compared to the less expensive equipment would be $70 per year, or $420 over six years, $840 over 12 years, and $1,260 over 18 years.
• Using a ground-source heat pump would provide the lowest annual heating and cooling bills—for a typical model we looked at, total annual energy costs were only $844 per year. But these systems are extremely expensive to buy and install—typically $30,000 or more—and these very high upfront costs will scare off most homeowners. But because of the incredible energy savings, hefty tax and utility company incentives (for ground-source heat pumps, the federal tax credit applies to both equipment and installation labor and isn't capped at $1,500), and the fact that ground-source heat pumps have life spans (reflected in our calculations) that are estimated to be about twice as long as those of conventional equipment, it does make financial sense to consider them.

A few additional, but important points:

• When comparing models, it's important to understand that features such as variable-speed blowers and two-stage burners will reduce energy usage but that these savings won't be reflected on their models' efficiency ratings, since the ratings are determined while equipment is operated at full capacity. A feature like a variable-speed blower usually runs at a constant low speed to maintain the correct temperature, increasing speed and energy use only when needed. So if you are comparing the energy efficiency of two different units, each with the same energy efficiency rating, and one comes with variable-speed capability and the other doesn't, the one that can run at variable speeds will use less energy. The same is true when comparing furnaces that have one- or multiple-stage burners.

The problem is that it's difficult to assess exactly how much energy these features save. But a reasonable rule of thumb to use is to assume that two-stage burners and variable-speed blowers each decrease furnace energy waste by about 10 percent and increase corresponding SEER/HSPF ratings by 1.0 to 1.5.

• Investing $5,000 extra in ultra-efficient equipment makes no sense if your home is drafty, has poor insulation, or you keep the thermostat pegged on Tahiti during the winter months. Before upgrading your equipment, make sure your attic is well insulated. Our article on home insulation should help get you started. Also consider hiring an energy auditor to help you find and reduce air leaks. And the best way to save on home energy costs is the most obvious way: dial down your thermostat and get and use a programmable thermostat. The savings from more efficient equipment are lessened after taking such steps to make your home's energy profile more efficient.

In our estimates on Table 1 we have taken into account our estimate of the savings that might result from the federal tax credit for installing energy-efficient equipment. (This assumes you have not used up your credit on some other energy-efficiency improvement.)

You might also be eligible for rebates or incentives from a local government. Some utility companies offer financial incentives to encourage you to install high-efficiency equipment. These programs vary from utility to utility; many are special loan programs. In most cases, your paperwork is kept to a minimum, but you might have to deal with a contractor from the utility's "approved contractor" list.

An excellent resource for details on what incentives are currently available for all types of energy-efficiency solutions is www.dsireusa.org, which maintains an up-to-date database of what's available nationwide.

Selecting Quiet Equipment

The sound rating of equipment is measured in Bels or decibels, with lower ratings being quieter. Compared to equipment made 15 years ago, almost all new units are astonishingly quiet.

Selecting Dependable Equipment

Neither Consumer Reports nor any other organization systematically rates the reliability and durability of furnaces, central air-conditioning systems, or heat pumps (although Consumer Reports does evaluate room air conditioners).

Since there is so little data available comparing the quality of heating and air-conditioning units, your best bet for getting trouble-free equipment is to solicit bids from several contractors with good reputations for customer satisfaction. It is widely agreed in the industry that the relative quality of equipment is much less important than making sure any equipment is installed correctly. As one contractor told us, perhaps with a bit of hubris: "It just doesn't matter too much. If I take the time to install the equipment properly, I can put in the biggest piece-of-junk furnace and make it hum for 20 years."

Keep in mind that customers aren't likely to be satisfied with firms that install equipment that breaks down often—even if the firms fix it promptly. And firms that are committed to satisfying their customers by making prompt repairs under their installation warranties aren't going to continue installing makes and models of equipment that require frequent service visits.

Getting a Good Price

Based on what you learn from discussions with several firms, you'll be able to specify exactly what you want done. Then you can have each firm revise its proposal to respond to your exact specifications with a quote for a fixed-price contract.

Getting competitive bids on installation or replacement jobs is a very easy way to save money. For large installation jobs, where price variation will mean big dollar savings from bid to bid, it's common to save $2,000 or more by getting a second or a third bid on a $10,000 job.

Even for smaller installation jobs, we find that company-to-company price differences are large, as you can see in Table 2. The table shows, for four relatively small jobs on which we collected bids, the difference between the highest and the lowest price quotes we received. On all four jobs, the highest price was more than twice as high as the lowest price.

In our surveys of consumers, we have found that even for jobs that end up costing more than $2,000, more than 40 percent of consumers get no competitive bids and only about 25 percent get at least three bids. For jobs that cost between $1,000 and $2,000 nearly 60 percent get no competitive bids. These consumers are passing up some easy money. (Remember that money saved is better than money earned because you don't pay taxes on the money you simply avoid spending.)

The price index scores on our Ratings Tables may give you a little help in selecting firms where you have a relatively good chance of getting a reasonable bid. But these price index scores are at best a starting point. We find that in many cases companies that are relatively high-priced on one job are relatively low-priced on another. So you should not rule out a company with a high price index score if it looks good on our quality measures.

Setting the Terms

In addition to the price and a description of the equipment to be used and the work to be done, each contractor's proposal should include other elements. All of these are important in your choice of the best outfit for your job.

Performance Guarantee—Ask the contractor if you can get a performance guarantee. For a complete heating and cooling system, the contract might say: "when the outside temperature is 85°F and six persons are inside, the inside temperature can be maintained at 78°F or cooler; when the outside temperature is 40°F, the inside temperature can be maintained at 75°F or better."

You'd also like a guarantee regarding the uniformity of temperature. On a hot day, you don't want to have to drop the inside temperature of some rooms of your house to 65°F in order to get other rooms down to 78°F. If you are having ductwork installed, firms should be willing to guarantee that "all rooms on the same floor can be maintained within a range of 5°F." It's more difficult to make any promises on floor-to-floor temperature variation unless you'll be installing a separate system for each floor.

Installer's Warranty—The installer's warranty might say: "In case of any defects in equipment or workmanship or any failure to meet performance specifications, we will provide without charge all parts and all labor to exchange, repair, or adjust any components installed by us for a period of one year from date of startup." Try to negotiate for more than a one-year warranty, but getting one will be difficult. Contractors point out that most installation defects show up in the course of one full heating or cooling season. But one reason to give yourself more time is that the weather in some years tests a system harder than the weather in other years.

Payment Schedule—An important consideration is the payment schedule the contractor allows. Make sure you get a contract that doesn't require any payments until the work is complete. Better still, ask if you can withhold payment until you've had a chance to run the system for a few weeks (but note that this arrangement is not typical).

If a contractor has a policy of expecting full payment only after jobs are complete, it tells you several things. First, it indicates that the company is confident that it can satisfy you. Second, it means you will have a means to prod the contractor to make the job right if you are not satisfied. Third, it suggests that the company is not living from hand to mouth—that it at least is financially secure enough that it can procure equipment and make payroll without having to use customers' funds. Finally, you'll be protected if the firm goes belly up.

If possible, make all payments using a credit card. If you are dissatisfied with the work or the equipment, you'll have the option to dispute the charge under the Fair Credit Billing Act.

Insurance Coverage—An additional quality indicator is insurance coverage. Ask any firm you are considering for a certificate of insurance showing that it has worker's compensation insurance to cover it if one of its workers is injured while working on your property (otherwise you could be liable). Also, get evidence of liability insurance, so you'll know the firm can make good if, for instance, it drops an air-conditioning unit through your ceiling.

Additional Work Specifications—You need also to go over the details of exactly what work is to be done. We have seen excellent contracts running eight pages or longer. Be sure each company's proposal (and the contract you finally sign) is explicit about these responsibilities:

• Providing needed electrical supply and hooking up your system to your existing electrical panel;
• Providing drainage for condensate;
• Providing equipment support (concrete base for an outside condensing unit, for example);
• Securing all required permits;
• Enclosing ductwork, finishing, and painting;
• Patching holes;
• Removing trash and old equipment.

Get It in Writing!

Once you have settled on all the terms of an installation job, get them written up in a firm, fixed-price contract. In our surveys of consumers, we have found that for jobs costing over $2,000, more than 10 percent fail to get such contracts, and for jobs costing between $1,000 and $2,000 more than 30 percent fail to document the deal. That is playing with fire.

Getting the Most from Your Equipment

The most important maintenance task for both heating and cooling systems is something you can do yourself—replacing the air filter. With a new system or one in a home you've just moved into, it's a good idea to check your filter monthly until you see how quickly it gets dirty at different times of the year. It will probably need replacement two or three times during the cooling season and about equally often during the heating season. It will probably need replacement two or three times during the heating season and, if you have air conditioning, one or two times during the cooling season. When there is a matting of dirt—when you can't easily see through the filter as you hold it up to a light—it's time for a replacement. If you aren't sure how to judge when a filter is too far gone, ask your technician to show you what to look for the next time you have a service visit.

A dirty filter makes your system work harder than it should, reducing performance and energy efficiency. A dirty filter also results in having dirt spread by your system throughout your house. An extremely dirty filter can be especially bad for air-conditioning systems, since it can cause evaporator coils to freeze up and, possibly, result in compressor failure.

Air Conditioner/Heat Pump

A task you can do yourself for either an air conditioner or a heat pump is clearing debris away from the outdoor unit. You need to keep the grills of the unit free of grass clippings, leaves, and other debris, which can inhibit airflow. Through the winter months, clear away snow that builds up around the outdoor unit of a heat pump. If snow consistently drifts in banks around your unit, check your owner's manual to see if your unit has been installed to manufacturer's specifications. Typically, outdoor units should be on a concrete platform several inches above ground level. You may need to have a contractor raise your unit. An obstructed outdoor unit overworks the compressor and can cause a costly premature failure.

There are other maintenance tasks that are usually done only by professionals. The condenser coils need to be checked for surface dirt and dust, and cleaned if necessary. Contractors often use a special chemical bath for the cleaning. Electrical connections and contacts need to be checked visually and capacitors should be tested. Controls designed to protect the compressor from high pressure or low pressure should also be tested. Finally, the refrigerant level should be checked, with refrigerant added as necessary.

Under no conditions should you try to add or release refrigerant yourself. As part of the regulations written by the U.S. Environmental Protection Agency to comply with the international ban on ozone-depleting substances, all heating and air-conditioning contractors that handle refrigerant must be trained and certified, and they must possess equipment that will capture the refrigerant and not allow it to escape to the atmosphere.

Proper maintenance will enhance the performance, energy efficiency, and durability of your equipment. If you do the tasks you can do yourself, however, it's not clear how much benefit comes from professional maintenance service.

Most contractors argue that an air conditioner maintenance visit is worthwhile before the cooling season each spring and a heat pump visit each fall. But heating and air-conditioning contractors have an obvious bias; the more professional maintenance visits you have, the more money they make, and the better their equipment runs. Best of all from the contractor's standpoint, maintenance visits take place before peak heating and cooling seasons, providing a welcome flow of revenue and a way to keep technicians occupied.

Equipment manufacturers have less reason for bias than contractors. Although regular maintenance may help manufacturers look good by helping equipment achieve maximum life span, performance, and efficiency, a manufacturer could also look good by claiming that expensive maintenance is unnecessary. Nonetheless, most manufacturers recommend annual professional maintenance of air-conditioning and heat pump systems.

Yet there appears to be little hard data supporting anyone's recommendations—showing that reductions in energy requirements or increases in equipment life are sufficient to offset the cost of professional maintenance. Clearly some systems run well despite going years without professional maintenance. And the choice of a one-year maintenance interval for air-conditioning equipment, for example, seems rather arbitrary. Why not twice a year or once every two or three years? Why not more or less often depending on conditions? It is clear, for example, that the need for maintenance is greater if your system is old, you use it heavily, there is much dust and pollen in the area around the equipment, you have aluminum wiring, or you have frequent breakdowns. Also, maintenance is more justified in a large house where a small percentage improvement in energy efficiency can save a substantial amount of money.

In the end, your decision on professional maintenance will be much like your decision about how often to change the oil in your car or how often to have your teeth cleaned: there is no absolute answer. As with those decisions, it's a good idea to ask the professional with whom you deal to explain why a particular maintenance interval is right for you, given your individual circumstances.

If you don't plan to have professional air-conditioner or heat pump service each year, test your system before the usage season begins. That way, if there is a problem, you can order a service visit before the peak-season rush.

Gas and Electric Furnaces

Gas and electric furnaces usually need less professional maintenance than other types of equipment. But there may be value in having a professional come in every year or so to clean and adjust your equipment for the sake of efficiency, and to check for any existing or potential leaks of fuel or combustion products.

Oil Furnaces

An oil-burning furnace is the piece of equipment most in need of regular preventive maintenance. Replacement of nozzles and oil filters, adjustment of excess air levels, and cleaning of soot from the firebox can increase heating efficiency by 10 to 12 percent—even more in a system that has been badly maintained. An expert who has the equipment and know-how to measure carbon dioxide, flue gas temperature in the stack, the "smoke number," and the stack draft should do this maintenance. The expert should also check for dangerous smoke leaks and improper safety shutdown.

If you have an oil furnace in a large house, where a few percent improvement in efficiency would save you the cost of a service visit, it's a good idea to arrange for a professional to come to your house annually. But if your house is small, you may want to skip a year or two between visits.

Getting a Good Price

It's not difficult to compare prices for maintenance-only service visits. Call firms that rate high for quality on our Ratings Tables and explain that you want the price for a maintenance-only service visit assuming no repairs will be needed. Ask exactly what is included in maintenance service. (Will they clean condenser coils, for instance?) You can generally expect to pay between $80 and $120 per visit. Bear in mind that maintenance visits sometimes reveal the need for repairs, so it is important to use a high-quality firm that has reasonable repair prices.

Equipment Features to Consider

If you are installing new equipment, in addition to making choices about energy efficiency, there will be decisions on whether to pay extra for various features. Below is a summary of the types of add-ons you might want to consider. We're admittedly scratching the surface of the heating-and-cooling-equipment-options world here, but these are the major "do you want this or not" questions you'll probably face.

• Variable-speed blowers—Indoor fans (blowers) and/or outdoor fans of central air conditioners, heat pumps, and furnaces can be equipped so they are able to run at different speeds, from slow to fast, depending on need. The units are programmed to try to keep conditioned air continually moving at the lowest flow possible. These setups minimize the need for equipment to cycle on and off frequently (which contributes to wear and tear), dramatically help systems maintain consistent temperatures throughout different areas of homes, reduce energy usage, and cut noise.
• Variable output—Furnaces with this feature can automatically select how much heat to generate (usually choosing from among two levels); air conditioners and heat pumps with this feature can automatically select how hard their compressors need to work to deliver conditioned air. Like variable-speed blowers, this feature allows equipment to deliver warm or cool air continuously for longer periods of time, meaning equipment doesn't have to cut on and off frequently.
• Programmable thermostats—These devices provide an easy way to save energy, so long as you actually program them (most homeowners who have them don't). If your home is unoccupied during the day, you can save five to 15 percent per year on your energy bills by turning down the heat by 10 to 15° while you are away. Obviously, you'll want to get a model that is easy for you to use. A misconception associated with programmable thermostats is that when it is time to return the temperature in the home back to normal conditions, the furnace has to work so hard and use so much energy that there's little to be gained in energy savings. Much research has shown that this idea is untrue.
•  Humidifiers—These can be added to ductwork and supplied with water from plumbing to help keep air in the home more humid during dry winter months. One benefit humidifiers provide is that, at the same temperatures, humid air feels warmer than dry air—so using a humidifier means you should be able to dial down your thermostat during the winter by a few degrees but not notice the change in temperature. Avoiding overly dry air will reduce itchy skin, eyes, and throats, and help those with asthma.
• High-efficiency air filters—These assemblies use electrical charges to attract and trap particulates. They can also reduce the amount of dust blown through systems. But there's little evidence that these add-on devices actually contribute positively to improving indoor air quality.
• Scroll compressors—This is a relatively new advance in heat-pump technology. Instead of using regular, piston-type compressors, these devices use two spiral-shaped scrolls. One of the scrolls remains stationary, while the other orbits around it, compressing the refrigerant by forcing it into the smaller space. The benefits of heat pumps with these types of compressors are longer operating life, less noise, and the ability to deliver conditioned air that is 10° to 15°F warmer, compared to conventional heat pumps.
• Desuperheaters—Some high-efficiency heat pumps can be equipped with these devices that capture the waste heat generated from heat pumps during cooling mode and use it to help heat water. These devices heat water two to three times more efficiently than conventional electric water heaters.

Ground-Source Heat Pumps

Conventional heat pumps work, in heating mode, by drawing heat from outside air. During the heating season, the air outside is usually colder than inside the home, but heat pumps are still able to draw warmth from outside air by blowing that air over refrigerant-filled coils. The refrigerant in the coils absorbs available heat as it goes from liquid state into vapor. The vapor is then circulated into another set of coils inside the house, where it is compressed into a liquid, a process that makes it hotter. A fan blows air over these relatively hot indoor coils, thus warming this air and cooling the refrigerant. The warmed air is distributed through the home. The cooled refrigerant is circulated back to the outside, the pressure on the refrigerant is released, and the refrigerant is again vaporized, drawing warmth from the outside air. The cycle keeps repeating itself. Air conditioners, or heat pumps working in cooling mode, work the same way, except the process is reversed.

New heat pumps are remarkably efficient so long as outdoor temperatures remain above 40°F or so. Once the air outside is cooler than that, conventional heat pumps can't draw enough warmth from the outside air to keep the indoor space conditioned. When this happens, a secondary, less energy-efficient source of heat, must be used.

Ground-source heat pumps (also referred to as geothermal heat pumps) employ the same general technology as air-source heat pumps (conventional units), but don't have to rely on sometimes-too-cold outside air as their source of heat. Instead, they draw upon stable temperatures below ground to provide the warmth that is absorbed by vaporizing refrigerant. If you've ever taken a tour of a cavern, you probably were informed that the temperature there stays the same year-round. The same is true of temperatures just a few feet below the surface. Depending on the region, temperatures remain a fairly constant 45° to 75°F.

Instead of passing outside air over refrigerant-filled coils, ground-source heat pumps draw the heat absorbed by vaporizing refrigerant by passing the refrigerant through coils or a system of pipes that are buried below ground.

Since ground-source heat pumps don't need another way to produce heat when temperatures outside are cold, they can be incredibly energy efficient. We estimate that a typical ground-source system used for the illustrative home shown on Table 1 would only cost $844 per year in energy costs to operate—the lowest cost option in terms of annual energy costs. According to the EPA, geothermal heat pumps can reduce energy consumption—and corresponding emissions—up to 44 percent compared to air-source heat pumps and up to 72 percent compared to electric resistance heating with standard air-conditioning equipment.

But you'll have to pay a lot more up front to get these big savings off utility bills: it's not unusual for installation of a ground-source heat pump system to cost $30,000 or more. The reason for the big price tag isn't just because of higher equipment prices (they are about twice the cost of comparable air-source equipment), but due to very high installation costs. The coils for air-source heat pumps take up relatively little space because fans blow air over the coils. But in order to draw warmth from below-ground temperatures, ground-source systems need to send refrigerant long distances, which means coils or pipes need to be buried in a way that calls for a lot of labor-intensive digging or drilling.

The most common way to set up a ground-source system is a closed-loop system. This can be done by digging horizontal trenches about four feet deep and burying a series of pipes or coils. Or it can be done by drilling a series of vertical holes 100 to 300 feet deep and inserting connected pipes. Since installation costs are so high, even if you could buy and install a ground-source system for a bargain-rate of $20,000, it would still take a long time to recoup your upfront costs through energy savings. But there are other factors to consider in the calculus.

First, Energy Star certified ground-source systems qualify to receive the 30-percent federal tax credit for the entire cost of the project, including installation costs. Unlike the tax incentives for installing other types of energy-efficient heating and air-conditioning equipment, the incentive for ground-source systems doesn't have a $1,500 cap and doesn't expire until 2016. Credits, rebates, and/or incentives may also be available from local governments and utilities.

Second, ground-source systems are usually equipped with desuperheaters, which create virtually free hot water during the summer and relatively inexpensive hot water during the winter (see above for more information on these devices). This means a ground-source heat pump might save some households an additional $150 or more per year in energy costs compared to using a gas water heater and $350 or more compared to using an electric heater.

Third, ground-source heat pumps are supposed to require much less maintenance than conventional equipment and do not require replacement nearly as often.

For several reasons, ground-source systems are well-suited for newly constructed homes: you avoid the problem of ruined landscaping that results from installing horizontal systems; digging and drilling is cheaper since that work can be coordinated with other required digging; and the higher upfront costs of the systems can be spread out over the course of loans. An interesting approach to designing new, energy-efficient homes would be simply to build underground piping that would be shared by all the homes in the community. But most developers haven't been quick to embrace the expense of building homes with ground-source systems or entire communities that use them. In the future, more may be compelled to do so.

We won't try to calculate the cost effects of a ground-source system spread across a 30-year mortgage. But by paying monthly across 30 years for the system, you might begin generating a positive cashflow from the system right away, improving affordability.

Service Contracts

Rather than paying individually for maintenance visits and repair jobs, you might consider getting a service contract for air-conditioning and/or heating equipment. Many companies try to persuade customers to enter into such contracts.

If you are interested in a service contract, you'll need to compare the price and coverage of each company's contract. (You'll still want to be aware of repair prices since most service contracts have many coverage gaps.)

Service contracts fall into three broad categories:

• Contracts covering just the labor cost of planned maintenance visits (usually either annual or semiannual) to check, clean, and adjust equipment.
• Contracts covering the labor costs for planned maintenance visits and also for unplanned repairs.
• Contracts covering labor costs for both maintenance and repair visits and also covering the costs of selected parts.

Within these categories, coverage varies. First, there are contracts for furnace only, for air-conditioning equipment only, or for the two combined. Second, some contracts cover work that others exclude. Among maintenance-only contracts, the most common exclusion is the cost of cleaning air-conditioning coils. Among contracts covering labor and/or parts for repairs, exclusions range from such costly items as replacement of a compressor to much less important items like replacement of capacitors. If you want to consider firms for service contracts, you will have to request copies of the company's contract forms.

The differences in contract prices are striking. For example, at one level of coverage, we found a range from $100 to $300 among companies we compared.

To compare the value you get from individual outfits, it's easiest to look at firms that cover roughly the same items. Also, check what firms do on their maintenance visits—do they clean the air-conditioning coils, for example? And keep in mind that some companies may offer 24-hour service while others are hard to reach outside of regular daytime hours.

But there's a good chance you won't want a service contract at all. You might do better just to call for service whenever you need it, and foot the bill each time.

There are three main reasons to get a service contract—

• To take care of your preventive maintenance needs;
• To get priority service in case of equipment breakdowns; and
• To insure yourself against the costs of sizable repairs (to the extent that repair costs are covered).

You'll find some companies that swear by these contracts. They argue that service contracts make for efficiency because they allow work to be scheduled when demand is low, thus minimizing the need to pay overtime labor rates during peak load periods or to maintain excess personnel just to be ready for these peaks. Other companies will tell you these contracts are little more than a device their competitors use to ring up extra profits at your expense. They argue that a service contract wastes your money and a company's time by encouraging unneeded maintenance visits and emergency calls. There's some truth in both of these views. The right answer for you depends on your circumstances.

If you need professional maintenance visits every year—if, for instance, you have a large house or you just do not want to do even the simplest maintenance tasks yourself—you may do all right with a service contract that covers these visits. But you should not pay more for the contract than you would pay for the number of visits it includes if you ordered them individually at regular labor rates.

If you need maintenance visits less often than every year, you may do well to pay for them on a one-at-a-time basis. If this is your situation, your only reason for getting a service contract would be to get priority on unscheduled repair calls or to get insurance for costly repairs. (Unfortunately, it seems local services do not offer contracts with these protections unless you pay for maintenance visits as well.) But these protections may not be worth the cost of a service contract.

Priority treatment on unscheduled repair visits may be especially important to you if someone in your home has serious allergies or frail health, if you have valuable houseplants, or in other special circumstances. But getting a service contract may not protect you. Furnaces and air conditioners most often break down when the weather is extreme, and companies simply do not staff up to meet these occasional peaks. They do put their technicians on overtime and put supervisors into the field, but sometimes they just cannot keep pace—even for their priority customers.

In fact, one of the most common complaints we receive from readers is having to wait weeks to get an appointment for repairs from companies with which they have signed service contracts. For quick service, you might do just as well without a service contract. Whenever you need repairs, simply call a few firms to see which will come soonest.

If your objective in getting a service contract is to insure against possible expensive repair bills, make sure any contract you buy that offers that level of protection is reasonably priced and remember that the most costly repairs—replacements of compressors and heat exchangers—are not covered by most service contracts.

A final, important point: if you want a service contract, use care in choosing the company. We get a lot of complaints from consumers who, after buying service contracts, find that on every service visit, technicians find something that needs to be repaired—at extra cost. It seems that some contractors use service contracts as a twice-per-year chance to squeeze customers for unnecessary repairs.

Where You Can Complain

State and Local Government Consumer Agencies

Delaware Office of the Attorney General
Consumer Protection Unit
820 North French Street
Carvel State Building
Wilmington, DE 19801
302-577-8600

New Jersey Office of Consumer Protection
124 Halsey Street
P.O. Box 45025
Newark, NJ 07101
1-800-242-5846 or 973-504-6200

Pennsylvania Office of the Attorney General
Bureau of Consumer Protection
14th Floor, Strawberry Square
Harrisburg, PA 17120
800-441-2555 or 717-787-9707

Burlington County Consumer Affairs
49 Rancocas Road, 3rd Floor
Mount Holly, NJ 08060
609-265-5054

Camden County Consumer Protection
Jefferson House, Lakeland Road
Blackwood, NJ 08012
856-374-6161