Air Conditioner Prices in 2022
It’s still November 2021 as I write this article about air conditioner prices in 2022, but I know what’s coming. Manufacturers including Trane, Lennox & Bosch have already communicated price increases to HVAC Contractors like Magic Touch Mechanical – Mesa, AZ
I apologize in advance if this article seems all gloom & doom – don’t shoot the messenger. I don’t set manufacturer prices; I’m just letting our readers know what’s happening in the air conditioning & heating world!
Be sure to see my update March 15th, 2022 at the end of this article but don’t skip ahead or you’ll miss important info!
Heating & Air Conditioning Equipment Costs Soared in 2021
Homeowners who purchased new AC & heating units in 2019 and early 2020 saved hundreds, even thousands of dollars. The same equipment (and ancillary items) today in late 2021 has increased in cost by as much as 38% from some manufacturers! Even manufacturers whose price increases were less dramatic are substantially higher in cost than this time one year ago.
If air conditioner prices in 2022 follow the rate of increase seen throughout 2021, consumers can expect to pay more. In the 25-years I’ve operated Magic Touch Mechanical, I’ve never seen HVAC equipment costs rise so much or so fast.
Historically, new heating & air conditioning equipment costs increase between 5% to 9% annually – at most. Several manufacturers have had as many as 5 price increases this year alone! The highest increase we saw this year from any manufacturer was a whopping 28% over the course of 11 months for the equipment & install materials.
I’m not talking about an increase just my company received. These price increases are industry wide even to medium to larger companies like Magic Touch Mechanical. In fact, many small HVAC Companies couldn’t even get equipment this year due to shortages. We got lucky thanks to our relationships with manufacturers & the sheer volume of heating & A/C units and supplies we purchase.
Air Conditioner Prices in 2022 Will Continue to Increase
Typically, we get the announcement about how much prices will increase in January of the following year by mid-December. Yesterday, Trane announced another 9% price increase on some equipment effective immediately. The announcement said their air conditioner prices will increase another 12% on January 1st, 2022.
Bosch recently informed Accredited Bosch Contractors (ABC Dealers) to expect another 6% increase in January 2022. These increases add up to a mind-boggling 28% (Bosch) and 38% (Trane) price increase year over year. Note, these increases account for higher equipment costs, accessory costs, and materials needed to complete the installation of a new HVAC system.
Trane and Bosch are not alone in these unprecedented price increases either. Other manufacturers including Lennox, Daikin/Goodman, Mitsubishi, and Carrier brands prices are all increasing at a much quicker pace than ever.
At the current pace, new air conditioner prices in 2022 could be as much as 56% higher by next November. Of course, that’s only if the current rate of increase continues throughout 2022 at the same pace as 2021. Let’s hope that’s not the case!
Even Heating & AC Units Made in the USA are Impacted
Equipment manufactured in China and even as close as Mexico face shipping challenges and rising costs shipping to America. Even when they manage to get their equipment through U.S. Customs, current trucking and labor shortages prevent them from getting to suppliers. In turn, consumers and contractors alike are faced with backorders and long wait times for new AC units & furnaces.
Equipment brands made or assembled in the United States aren’t in much better shape getting their equipment to customers. Earlier this year, Lennox informed dealers of severe supply chain issues and shortages preventing them from getting equipment out. “Even getting cardboard for boxes to put our equipment into has been difficult,” said one Lennox representative. He added, “Even when we can get cardboard, it’s 3 to 5 times higher in cost than usual. We have no choice but to pass these increased manufacturing and shipping costs on to our customers.”
Internet Memes Don’t Tell the Whole Story
You’ve probably seen the meme on social media about products made in the USA not getting stuck on cargo ships. Tell that to Goodman / Daikin Air Conditioning who proudly boast their equipment is built here in the Southwest.
The Goodman air conditioning manufacturing plant in Texas is the largest manufacturing plant (of any kind) in North America. In fact, it’s one of the largest manufacturing facilities in the world. Goodman boxes are printed with the “Made in the USA” designation accompanied by the American Flag printed above. Even with Texas being only two states over from Arizona, they have a hard time just getting equipment here.
Like every other manufacturer, Goodman / Daikin depends on parts made in Asia and Europe to complete their unit’s assembly. So, products made in the USA, do indeed depend on those same cargo ships.
For all these reasons, I think we can all just expect air conditioner prices in 2022 to continue to rise.
Credit where credit is due: Of all equipment manufacturers, Goodman, while challenged, has done the best job of getting us all AC units this year. That’s notable and deserves the shout-out as air conditioning is not a luxury in Phoenix!
Complete New HVAC System Cost Installed
There are several types of residential HVAC systems, the most common in Arizona is known as a split system. Split meaning: An outdoor condenser (A/C or Heat Pump) connected to an indoor air handler (furnace & coil or blower & coil). A complete new split system installed including all ancillary items, thermostat, warranty, maintenance plan, etc. average price last year was $8,000 to $11,000. An entry level system could be as low as $6,800 installed. A top-of-the-line system with all the bells and whistles was about $15,000.
Let’s look at what those numbers look like with 25% inflation added:
- The lowest cost entry level system last year: $6,800 + 25% = $8,500 at current inflation pace.
- The highest cost premium level system last year: $15,000 + 25% = $18,750 at current inflation pace.
- The average consumer spent between $8k – $11k last year – add 25% = $10k – $13,750 at current inflation pace.
To be clear, I’m not talking politics, pointing fingers, or making a statement here. I’m an HVAC Contractor, not a politician or lobbyist. I get lots of E-mail from people all over the world telling me they appreciate my unbiased blog articles. This one is just that – a fact-based report of what’s happening with new air conditioner prices in 2022.
Air Conditioner Prices in 2022 – Will They Drop Back Down?
Nothing dictates prices more than supply and demand no matter if we’re talking air conditioners, vehicles, or gasoline. Of course, there are other factors, but supply and demand will always be the greatest variable.
With that in mind, several manufacturers have stated they anticipate shortages will continue well into 2022 with only slight improvements. Many admit they’re severely understaffed and having a hard time attracting people they need to staff their manufacturing plants. Backlogs at our major shipping ports, component supply chain delays, and microchip shortages (to name a few) continue to add to the supply problems of new air conditioning units being delivered to suppliers and contractors.
On the flip side of the coin, demand has never been higher. With more people working from home, pent up demand, aging equipment, hotter summers & colder winters; more consumers are replacing equipment.
HVAC equipment manufacturers have taken notice too. Several manufacturers known to offer factory rebates in the shoulder seasons (Spring & Fall), simply didn’t this year! So, while I can’t predict the future (my crystal ball is broken, and the parts are on backorder) – I just don’t see prices dropping soon. I’m happy to be wrong about this!
My Advice Based on 35-Years in the HVAC Industry
If your home’s central air system is elderly or you already know replacement will be needed soon – do it now. The sooner the better.
Note: Yes, I make a living selling air conditioners. However, my dance card stays full so to speak. We’re a 25-year-old company with a stellar reputation and loyal clients – I have no trouble selling systems. In fact, we have some clients on a waitlist for backordered equipment. I mention that as I’m advising people to buy now simply because the longer you wait the more it will cost.
If your equipment is newer – make sure to have it cleaned and serviced. Part shortages and price increases are in the same situation as new units. In other words, preventative maintenance is far wiser than emergency repair more so than ever these days.
Update March 15th, 2022
It didn’t take a mind reader to speculate HVAC equipment price increases of epic proportions for 2022. Frankly, we’ve seen price increases in every industry and product segment skyrocket since early 2020. What I didn’t know was coming was the dramatic jump in gas & diesel prices. The jump in fuel prices has only accelerated price increases in recent weeks.
One manufacturer that raised prices in January a whopping 12% across the board, just announced another 6% increase is coming next month. An 18% price increase in 4 months! Another contractor I know on the East Coast told me one of his equipment suppliers said he “could expect an increase every 60 days in 2022.”
Equipment Shortages Continue – and Now Ductwork!
Most of us in the industry expected to see some relief in supply chain issues by this time. While some manufacturers are doing much better supplying new units than they were last year, others have gotten worse. Fortunately, we sell many brands so we’ve been able to procure new AC units for our clients – however not always their first choice. When faced with a 6-12 week backorder or having it tomorrow, many consumers are opting to go with what’s in stock now.
However, parts & ancillary item shortages have led to rapid price increases in everything from refrigerant to flex duct. These shortages lead to panic buying, price gouging, and all the worst humanity has to offer. I know I sound like a ray of sunshine, don’t I? It brings me no pleasure to write this, but readers have come to know me for telling it like it is, so that’s what I’m going to keep doing.
Recently, a supplier told me Quiet Flex, a flexible duct manufacturer owned by Daikin/Goodman has backorders as long as 2-years … two years! Between labor and material shortages, they just can’t make product fast enough to keep up with demand.
Buy, Buy, Buy
Some people can afford to pay more, some can’t, but we all need heating and/or air conditioning (in most parts of the country). My advice to everyone is buy now. If your equipment is on it’s last leg, buy now. Older than 12-15 years, buy now. Breaking down every year or two, buy now. Very expensive to operate, buy now.
I understand HVAC equipment is a “grudge purchase,” nobody wants to buy a new A/C or furnace. I didn’t want to buy any of the new roofs, ranges, garbage disposals, or water heaters I’ve had to over the years – I did so begrudgingly! However, I’d rather begrudgingly buy an air conditioner now for $8,000, $9,000 or whatever it is, than buy the same air conditioner in a year for $1,000, $2,000, or whatever it is more!
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