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Angie's List: Replacing Furnace

Now may be the time to replace your furnace and take advantage of tax credits.
If you need to replace your furnace, now may be a good time – tax credits for qualifying products expire at the end of the year.
In today’s Angie’s List report, what you need to know before investing in a new system.

Content:
Are you facing a furnace replacement?

Angie’s List, the nation’s leading provider of consumer reviews, asked highly rated HVAC contractors about upgrading your furnace.

Common types of furnaces:
Natural gas: The most common type of home heating system in the U.S. burns natural gas or propane to produce heat.
Electric heat: Rather than moving air over a flame as with combustion-based forced-air heating, air is moved over a hot electrical coil. An electric furnace is often teamed up with a heat pump to provide affordable heating and cooling.

Buying a New Furnace: Factors to Consider:
Sizing: Bigger is not always better. Your unit should be correctly sized to operate properly and efficiently. Your contractor must follow industry-leading practices for sizing the furnace, called the Manual J method, which is a heat loss/heat gain calculation, before recommending a unit.
Understanding energy efficiency: The efficiency rating for your heating systems helps to determine how much it will cost you to heat your home. The Annual Fuel Utilization Efficiency, or AFUE, tells you how much heat the furnace will produce compared to the amount of energy required to produce the heat. If a furnace is rated at 85 percent AFUE, 15 percent of the energy used is lost, and 85 percent actually becomes heat. The Federal Trade Commission requires manufacturers to include AFUE ratings on all new furnaces. Unfortunately, older systems may not have a rating, or the information may have been removed.
Where do you live? Furnaces have efficiency ratings that differ based on the region you reside in. Some furnaces are qualified only in the southern U.S. while others are qualified in the northern half of the country. If you're in the southern half, expect the furnaces to be up to 12 percent more efficient than traditional gas furnaces and to save an average of $36 in energy every year. For those in the north, expect 16 percent efficiency and savings of $94 annually.
How much? Standard furnaces with basic features cost the least. You should expect to pay at least $1,700 or as much as $4,000. As the efficiency rating goes up, so does the cost. High-efficiency gas furnaces rated 90 percent annual fuel utilization efficiency (AFUE) or higher can run around $2,500 to $6,000. The highest-efficiency gas furnaces rated 98 AFUE that employ advanced features like a modulating gas valve and variable-speed air handler will run on the high end of the price range.
Installation: Be sure to talk to your contractor about installation costs, too, before signing on the dotted line. The labor for the job depends greatly on what you need, and whether the job requires adjustments to ductwork, for instance. Typical installation costs commonly range between $1,000 and $2,000.The quality of installation also affects the operating costs associated with the new furnace. It's important to select a reputable, highly trained contractor well versed in the steps necessary to correctly install the type of furnace you choose.
Conduct maintenance on your heating and cooling systems: The No. 1 cause of inefficient heating and cooling systems is deferred maintenance. Even if you live in an area where you use your air conditioning more than your heating unit, you still need to maintain the equipment. Routine maintenance and cleaning by an HVAC professional essential to keep your system in top shape. Check your filter at least once a month. Changing any dirty filters will not only keep your system running smoothly, it will also improve the air quality of your house. Some companies offer an annual preventative maintenance plan that you can purchase. Make sure you know what you are paying for before agreeing to a service contract.
What's warm should also cool down: If your air conditioner is showing its age, it may be a good idea to replace both your furnace and AC at the same time. All of the critical components that make your heating and cooling system run smoothly need to match. Pairing an older appliance with a new one can lead to difficulties, especially when it comes to coil operation. By replacing both units at the same time, you can ensure component compatibility and overall efficiency, and possibly save in installation costs, too.

If your furnace has just died, you'll probably be glad to hire the first repairman who can come to your house that day. But, it's worth the time to research and interview several companies before hiring one.

Angie’s List Tips: Hiring a HVAC Contractor
Licensed, bonded and insured: Many states and municipalities mandate that HVAC contractors be licensed to work in the heating and cooling industry. In order to qualify for and continue to hold that license, HVAC companies frequently need to hold a minimum level of insurance and bonding. Any professional that works in your home should carry liability insurance to protect the homeowner in the case of accidental damage or injury. Check with your local building department or code office for more information.
References: A professional HVAC company should have a list of recent customers that you can refer to in order to verify that the company in question performed the work in a timely manner and to the customer's satisfaction. It's important to actually call those references to get relevant details about how their projects fared.
Estimates: Get at least three written in-home estimates from three different companies in writing. The project's cost is likely your most important consideration – and costs may vary widely from one company to the next - but it's also very important to ensure that the project's overall scope, details and completion dates are thoroughly documented. A written estimate protects you from things like price hikes and higher than expected labor costs.
Brands & Training: Ask prospective companies what specific manufacturers or equipment brands they carry. Unlike other home improvement contractors, HVAC companies often only carry a small selection of brands. If you're doing your own price comparison research on new equipment, you may need to limit your hiring choices to companies that specialize in your equipment brand of choice. Contractors should hold training certifications with the manufacturers of the equipment they carry.
Tax credits or rebates: Depending on the type of home heating or cooling equipment you're installing or upgrading, your project may qualify for federal or state tax credits or rebates. Be sure to ask about what incentives are available for your project and make sure the project is properly documented to meet federal, state or local incentive requirements.
Read the fine print: If you use a payment plan or apply for financing through the HVAC company's line of credit, make sure you read all the fine print and know what you'll be financially responsible for.
Ask about guarantees: Never work with a contractor who doesn't fully back the work performed, and ideally, you should opt to hire a heating contractor that commits to a 100 percent customer service guarantee, product guarantees, as well as warranties.
Don't wait until the last minute: Many homeowners put off repairing or tuning up their furnaces until a malfunction occurs. By that time, the damage is likely to be so severe that critical – and the most expensive – components will need replacing, or an entirely new furnace will need to be purchased. Prepare for a furnace replacement. Research your options, especially if your furnace is much older than the amount of time you've been living in your home.
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