Heating Equipment: Should You Repair or Replace?

Article From HouseLogic.com

By: Oliver Marks
Published: September 24, 2009

The decision to repair or replace heating equipment depends on its age, the cost of repair, and how much money a more efficient system will save you.

It happens eventually in every home. On a particularly frigid morning, you wake up and crank the thermostat just like usual, but there’s no response: No comforting sound of the system firing up and no warmth rising from the air vents or radiators. Hopefully it’s a simple problem that’s a quick and inexpensive fix, like a tripped circuit breaker or a clogged filter. But occasionally the repair is so big and costly that it raises an age-old question that’s been asked about everything from station wagons to vacuum cleaners: Is it more cost effective to fix what you have or replace it? Here’s how to decide.

Think safety first

If the problem presents a safety hazard, replacement is a no-brainer. For example, if your furnace has a cracked heat exchanger-the metal wall between the burning fuel and the air it’s heating-poisonous carbon monoxide gas could work its way into the household air supply, something you don’t want to risk. Other problems, like faulty electronics and stuck valves, can be repaired, which means you’ll need to do a cost-benefit analysis.

Consider the typical lifespan

A 2007 study (http://www.nahb.org/fileUpload_details.aspx?contentID=72475) by the National Association of Home Builders and Bank of America found that furnaces for forced-air systems last an average of 15 to 20 years; boilers for hot-water radiators and baseboards last 13 to 21 years. So start by dating your system. Some technicians write the year the equipment was installed directly on the unit. Otherwise, when the machine is off and cool, look for a metal identification plate, usually on the inside of chamber door. Record the model and serial numbers from the plate, then call the manufacturer’s customer service number to get the date of manufacture.

Keep in mind that a 25- or even 30-year-old system isn’t necessarily ready for the scrap heap. The published lifespans are averages, which means half of all systems are spent by that time, and the other half are still working well. Use these numbers as ballpark guidelines only, suggests Gopal Ahluwalia, the NAHB study’s lead researcher.

Assess the costs of repairing versus replacing

To decide your system’s fate, you need more data: the cost of your repair or replacement options, which your service provider can give you. Depending on the size of your house and the brand of new equipment you choose, a new hot-air furnace typically costs $1,500 to $4,000, while a boiler for a hot-water system might run $4,000 to $8,000.

As a general guideline, consider replacement if the equipment is beyond three-quarters of its life expectancy and repairs will cost more than a third of replacement, suggests Larry Howald of Broad Ripple Heating and Air Conditioning in Indianapolis. In other words, it’s probably not worth spending $700 to repair a 15-year-old furnace you could replace for $2,000.

Consider your heating plant’s efficiency

In these days of high fuel costs and concerns over our carbon footprints, you should also consider your heating plant’s efficiency. Its Annual Fuel Utilization Efficiency number (AFUE) measures the percentage of the fuel that’s converted to heat rather than being lost up the chimney or through other inefficiencies.

“If your system is 20 years old, its AFUE is probably about 70%,” says Greg Gill of Action Air Conditioning and Heating in San Marcos, California. Today’s minimum AFUE is 80%, which means you’ll burn 10% less fuel-and therefore spend 10% less money on your heating bills. You can go as high a 95% AFUE with new equipment, dropping your bills a whopping 25%. That kind of efficiency raises your equipment costs to $3,500 to $6,000 for a furnace and $8,000 to $10,000 for a boiler, but will also earn you a 30% tax credit (http://www.houselogic.com/articles/tax-credits-replacing-heating-and-cooling-systems/) (up to $1,500) from the federal government. And there are many local tax incentives (http://www.dsireusa.org) and manufacturers’ rebates for super-efficient systems, too.

“It’s definitely worth doing the math to see if the high-efficiency model will pay for itself,” Gill says. According to Energy Star, upgrading to more efficient HVAC (heating, ventilation, and air conditioning) equipment can cut heating and cooling costs by about 20%, or $200 a year on average, which means you could recoup the extra investment in as little as five years.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS®
Copyright 2009.  All rights reserved.