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A 28% jump in natural gas bills? That’s what the U.S. Energy Information Administration (EIA) is forecasting for the 2022-23 heating season. Coupled with inflation, it’s likely to mean less cash in the pockets of customers in the market for a new HVAC system. The savvy contractor, though, can seize the situation as an opportunity to educate. Now is the time for contractors — especially those in colder climates — to focus on educating customers about the payoff of high-efficiency furnaces, making the case that a high-end system is a smart investment, despite the higher upfront cost.

New and Improved

Higher-end furnaces bring a number of upgrades that contribute to energy efficiency. One of the most obvious is smart thermostats that can communicate with the furnace and allow the equipment to have a series of ranges.

“This way the [furnace] isn’t running full throttle all the time, but rather it’s modulating the conventional load to the house,” said Matt Marsiglio, operations manager at Flame Heating, Cooling, Plumbing & Electrical in Warren, Michigan.

Scott Merritt, founder and CEO of Fire & Ice Heating and Air Conditioning, located in Columbus, Ohio, said the diagnostic capabilities of newer thermostats and systems is a huge deal in modulating gas valves to keep the temperature constantly comfortable in a space.

“Remote diagnostics allow us to look at furnaces from here at the shop and let customers know when they are having an issue with their furnace before they even realize it,” Merritt said.

The goal is to bring the necessary parts needed upon that first service call so the furnace never actually goes down and customers don’t have to deal with the inconvenience of not having heat — or the cost of a contractor visit.

The Gas Price Payoff

The challenge for HVAC contractors is how to present information about high-efficiency equipment in a way that homeowners will understand — and, ultimately, lead to a sale.

At Flame, Marsiglio asks a series of questions designed to discover more about each individual customer, such as how long they plan to be in their current home. These help predict which customers may be interested in a newer, higher-efficiency furnace.

EFFICIENT: A higher-efficiency furnace in someone’s forever home could end up paying for itself in what the homeowner will save. (Courtesy of Flame)

“If it’s going to be their forever home, many times the higher-efficiency furnace ends up paying for itself in savings,” Marsiglio said.

Similarly, Merritt focuses heavily on educating customers. He informs customers how much less gas and electricity a higher-end, high-efficiency furnace uses in comparison to their current one. He then equates that to how much the local gas and electric costs are to come up with a cost savings for his customers. Ultimately, his goal is to educate customers about higher-end furnaces and let the furnaces sell themselves.

“We let them know what the benefits are — to prevent higher gas bills and electricity bills — and remind them that it’s only going to get worse this year,” he said. “We’re about educating and letting them choose. We educate them on what’s available and we also let them know what the lower-end equipment does as well, which normally doesn’t show that savings.”

Andrea Jensen, president and owner of Tri-City Services in Wisconsin Rapids, Wisconsin, said a lot of the furnaces they offer are already of that higher efficiency, so most of her conversations with customers turn into a conversation about comfort.

“Everyone wants to get the most out of their dollar, so it just makes sense to get the highest efficiency furnace you can,” she said.

The Safety Factor

In addition to the desire to save money on gas prices is the increased attention to IAQ, which also helps homeowners justify a purchase of a higher-end furnace.

“People are calling for duct cleaning, which then turns into a conversation about other IAQ options to make their home healthy,” Jensen said. “They're calling for a reason. Some notice they've developed allergy symptoms, some notice more dust than usual, some have several pets, etc. By digging a little deeper, you can discover more and ultimately teach them about the products that can make their home healthier. Then they can decide what to invest in to improve the air they breathe.”

Merritt said customers are certainly willing to pay more for improved IAQ, so when a contractor focuses on explaining to a customer about what’s floating around in the air they breathe, not to scare them but to educate them, they’ll make good decisions to protect themselves and their families.

While Marsiglio struggles with saying customers are willing to pay more for IAQ, he’s noticed people have more interest in keeping their homes safe and clean, and those who are interested don’t seem to be harmed by the price.

Northern Climates

While energy conservation is a huge reason for the DOE’s new efficiency ratings, living in a colder climate often provides contractors with built-in incentives to offer a homeowner interested in a furnace with higher efficiency ratings.

“Where we live, you simply can’t live without a furnace or another heat source, and since we use it half the year, it makes sense to get the best you possibly can,” Jensen said.

In most cases, furnaces are not a planned purchase and rather are a purchase made because the current one is unable to or is too costly to repair.

“Think of the last time someone invited a friend over to show them their new furnace versus a new television,” said Marsiglio. “A lot of times, it’s because the furnace breaks down. It’s either old and too expensive to repair, and the repair doesn’t match the value of the furnace, or it’s just unsafe to operate … [Homeowners] are often put in a position where they went to bed with heat, and woke up with no heat. And now they are staring thousands of dollars in the face.”

Being in a cold climate makes it easier for a homeowner to validate a purchasing decision for a high-efficiency system, Merritt said.

“Because the customer is able to see greater savings over the life of the system,” he explained. “Everybody really wants the best in their home, and they don’t want to spend any extra money. So if they want the cheapest furnace available, we’ll give it to them. But it won’t be because we were neglecting our duties and didn’t show them how efficient the other systems are.”