Repair vs Replace – For AC Units the Equation is Changing

Fixing an Old Air Conditioning Unit May Soon Cost More Than Replacement. The reason is simple. Refrigerant. Due to environmental concerns, the EPA all but banned air conditioning manufacturers from selling units that use R-22 (commonly known to most people by the brand name Freon). Along with that ban, the EPA has mandated a reduction in availability of new R-22, which has led to increased prices for recharging leaking systems. And those increased prices are expected to skyrocket even further as R-22 supplies continue to decline.

Some Background on R-22

R-22 was replaced by R-410A, but because of the chemical composition of the new refrigerant, the new refrigerant won’t work in older air conditioners and heat pumps designed for R-22. So if you have an AC unit or heat pump that was installed before 2010, you probably need R-22 to recharge it if there is a coolant leak or major repair.

R-22 Supplies Will Continue to Decline

R-22 refrigerant supply schedule

The supply of new R-22 has been steadily dropping over the years, as mandated by the EPA. Importation and manufacturing of R-22 dropped more than 50% from 2014 to 2015, the impacts of which are now really being felt in the market. In 2016, supplies decreased by 4 million pounds and wholesale prices rose to levels they had not reached since the big supply crunch in 2012-2013. Supplies will continue to fall by 5 million more pounds in 2017 and eventually go to zero after 2019.

Costs of R-22

Back in 2012-2013, the price of R-22 spiked until the government allowed extra production. Manufacturers responded and some supply companies stockpiled as much of the refrigerant as they could. That allowed prices to decline some and provided a couple years of stability.

However, the large drop in allowed production of new R-22 between 2014 and 2015 started impacting pricing in 2016. As tracked by Refrigerant Solutions Inc, wholesale pricing increased by $6.35/pound in 2016. An addition $1/pound wholesale price increase was announced at the beginning of 2017, bringing prices up about 26% from where they were during the earlier supply crunch. An additional $1/pound increase was announced starting in February 2017, bringing prices up almost 32% from 2012.

What R-22 Prices Mean for Air Conditioner Leaks

A simple coolant leak in your A/C system used to cost $200-$300 for a repair and recharge. For owners of R-22 systems those days are long gone. And you might not be lucky enough to have a simple coolant leak. While finding and fixing a simple leak might only cost around $200, other repairs can get pretty pricey. When the leak is in the fine copper tubing found in the outdoor unit or the evaporator coil indoors, it is going to be harder to find and repair. In these cases, the cost of finding and repairing the leak can jump upwards, sometimes reaching $1,500 when expensive parts have to be replaced.

The decision to try to fix a leak used to be a little more straight forward when that was the main cost involved in the repair. However, now you also have to figure in that the cost of recharging the system may be as much or sometimes a lot more than actually fixing the leak.

In 2012, when R-22 was in short supply and hot summer temperatures were driving demand in the Charlotte region, Charlotte HVAC Guide conducted a survey of local HVAC companies (Panther Heating and Cooling isn’t listed) to find out what it was costing homeowners for recharges. Most companies charged a service fee and then a set price per pound of R-22. The average 3-ton air-conditioning unit takes 5-7 pounds for a full recharge, so we average that out at 6 pounds of R-22.

Here’s what we found. The average total cost of fully recharging the system was $610. Add a 26% increase in R-22 prices since then and your looking at an average cost of recharging a 3-ton A/C somewhere around $800. And that cost is probably going to continue to rise over the next three years.

So if you have even a simple leak that requires repair and a full recharge, your repair bill is likely going to cost over $1,000 on an R-22 unit. Bigger problems and your repair bill on an old unit could soar to $2,500.

Why Replacement of Leaking R-22 Units Makes a Lot of Sense

While your air conditioning unit may not be at the end of its scheduled useful life, paying a lot for a repair might make less sense than investing in a new system. New systems have these advantages that repairs don’t offer.

  1. Better Energy Efficiency – Lower Utility Bills
  2. Warranty Prevents Additional Repair Costs
  3. Ability to Finance the Purchase

Better Energy Efficiency

A new AC unit is going to save you money on your utility bills. R-22 units that were installed prior to 2006 (and possibly some in 2006), are most likely 10 SEER units. New units are government mandated to be at least 14 SEER in the South. The new unit is going to be almost 30% more efficient than your old one, saving you over $100 per year on your electric bill.

On newer R-22 A/C units, the savings won’t be as great. In 2006, all air conditioning units were required to be at least 13 SEER. You should still save about 7% on your cooling bills with the more efficient system, assuming it is installed correctly.

A Good Warranty Comes with New Systems

 

 

Although we warranty our repair work, that only applies to the actual repair that we did on your system. As systems age, they are likely to have more problems. The average cost of a general A/C repair in the Charlotte area is around $300, according to data recorded by Home Advisor. You won’t have these costs. Trane provides 10 year warranties on parts for most installed equipment as long as you register it.

 

Financing is Only Available for New Systems

Price and affordability are not the same thing. Finding the money to replace a system can actually be easier than finding the money to pay for a repair. While the terms of the financing plans varies, if you qualify, you’ll be able to spread the cost of a new system out using monthly payments over one or more years. When you factor in that many people don’t have enough in savings to cover a $500 to $1,000 repair bill…and the rising costs of repairing an old R-22 unit, financing is another factor that makes replacement more appealing than repair.