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Blog

Is it Time to Upgrade Your Long Island Property’s HVAC System?

long Island hvac system replacement

This is the time of year when most Long Island properties are in the lull between the need for heat and the need for air conditioning. That being said, it will soon be time to turn on your building’s central air conditioning system.  If you are planning to repair or replace your HVAC units or furnaces, now is the time. But do you know if it makes more sense to replace aging units or just maintain them for another season?

With regular maintenance, most commercial HVAC systems last between 15-20 years. If your system is close to the end of its lifespan, it may make financial and logistical sense to upgrade your property’s units. A scheduled replacement is much less difficult to deal with than having to close your building for an extended period of time because you waited until it stopped working to replace it. When you schedule a replacement, you can prepare the tenants in your building(s) and may not even have to close your building, depending on the time of year and the weather.

There are close to five million commercial buildings in the United States today.  Some of these facilities were built or upgraded in recent years with the latest in technology and systems for occupant comfort and convenience, but many others still rely on outdated technology in their HVAC systems.

Commercial buildings consume just over 30 percent of the energy produced in the United States. Heating and cooling costs account for 40 percent of a commercial building’s total electricity bill. Building managers are always looking for ways to cut costs. Some of the greatest cost-cutting opportunity lies with the HVAC system, a property’s biggest energy user and highest controllable expense. Local utility companies throughout the country offer rebates and other business programs that will subsidize and facilitate commercial energy efficiency systems, further reducing the installation expenses associated with an upgrade.

In the next few years, the HVAC systems that were installed in the 1990s will be reaching their end of life. As your building’s equipment ages, maintenance and operating costs increase and reliability decreases.  Today’s heating and cooling systems have made substantial advances in design and efficiency, so facilities managers can look forward to significant operational benefits if they upgrade some or all of the building’s HVAC system.

How Do You Decide Whether to Make Repairs or Replace Your HVAC Units?

One way to know if replacement is the right choice is to check your furnace’s annual fuel utilization efficiency rating (AFUE). This number measures how efficient your unit is in converting fuel energy into heat. The higher the rating, the more efficient it is. For example, an 80 percent AFUE rating on a gas furnace means 20 percent of the heating will escape out the chimney or elsewhere.

The general rule of thumb is: If annual repair costs are more than 10 percent of what it would cost to replace the unit, you may as well replace it. A 10 percent return on capital is a solid return in today’s environment—especially if you’re able to invest in something far more efficient.

According to information from the Department of Energy, replacing an older furnace or boiler with a high efficiency unit, together with upgrades to flues, vents and other systems, can cut energy consumption in half. This is a big improvement over older, low-efficiency systems that log AFUE ratings of only 56 to 70 percent.

If you do decide to switch out your units, be sure to let your accountant know. IRS MACRS rules require that landlords depreciate HVAC units and furnaces in residential properties over 27.5 years. Most units will not last that long, so you will want your accountant to know that you are upgrading out this capital equipment so they can work with you to claim accelerated depreciation when you replace the old units. If you decide to repair instead of replace, you will also see some benefits, as repair costs are generally fully deductible in the current tax year.

Installing a high efficiency HVAC system allows you to effectively manage energy consumption, leading to better indoor air quality, lower costs, and a reduced carbon footprint. Along with regularly scheduled preventative maintenance, your high efficiency HVAC system can actually lower your total energy consumption by up to 50%. During peak summer months, your new system can save you a minimum of 15 percent off of your utility bill, potentially freeing thousands of dollars to allocate elsewhere. When making the decision whether to repair or replace your HVAC system, carefully weigh the pros and cons and consult with your building’s facility maintenance team to determine the most appropriate course of action.

Contact IFMA-Long Island bronze sponsor, Kelair, Inc. for all of your industrial and commercial HVAC needs.

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