Upgrade Heating and Cooling

Air conditioners, furnaces and water heaters have improved considerably in the past few decades. When it’s time to replace yours, look for a high-efficiency model to save energy and money over the long run. And remember, if you properly seal and insulate your home first, you may be able to downsize your furnace or air conditioner.


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  1. Air conditioners. Look for the SEER (seasonal energy efficiency ratio) number to compare efficiency levels in central air conditioners or the EER (energy efficiency ratio) for room air conditioners. ENERGY STAR-labeled central air conditioners are SEER 14 or higher. ENERGY STAR-labeled room air conditioners start at EER 9.8.
  2. Furnaces. The AFUE (annual fuel utilization efficiency) is the number to compare. Your existing furnace might have an AFUE around 0.75 – meaning it is 75% energy efficient and 25% of the energy it uses goes to waste. ENERGY STAR-labeled furnaces have an AFUE of 0.90 or higher. In addition to using energy more efficiently, furnaces in the 90% efficiency range have sealed combustion chambers and pose fewer safety problems related to carbon monoxide and flame rollout.
  3. Heat Pumps. Electric heat pumps draw heat from outside air and move it inside (or vice versa). They can be used as part of a central ducted system or as individual room units. Look for the heating seasonal performance factor (HSPF) and the SEER (for centralized systems) or EER (for room units) to compare efficiency levels. ENERGY STAR-labeled heat pumps require an HSPF ≥ 8.0 and SEER ≥ 14 or EER ≥ 11.
  4. Ducts. It’s common to find ducts that leak 30% or more of a home’s conditioned air. In addition to wasting energy, leaky ducts can be a cause of inconsistent temperatures and poor indoor air quality.
    • Use approved materials like mastic and foil tape (not duct tape) to seal leaks.
    • Ducts should also be insulated to reduce heat transfer.
  5. Water heaters. Compare the EF (energy factor) when buying water heaters. To earn the ENERGY STAR label, a natural gas storage water heater must have an EF ≥ 0.67, a natural gas tankless water heater requires an EF ≥ 0.82 and an electric water heater requires an EF ≥ 2.0.
    • To save even more energy, consider adding a solar water heating system to supplement your existing natural gas or electric water heater. The solar system preheats your water most of the way using free heat from the sun, saving you up to 75% on your conventional water heating costs.

Tips for Quality Work

  1. Seal and Insulate. The highest quality, most cost-effective heating and cooling upgrades start with insulation, air sealing and duct sealing.
  2. Hire a licensed, BPI-certified contractor. Not all contractors are trained in building science — i.e., how the components of your home work as a system. The BPI certification lets you know that the contractor understands how your heating and cooling systems interact with your building envelope and ducts and the potential health and safety implications.
  3. Pull a permit. Follow your local jurisdiction’s permit requirements to ensure proper installation, including properly sealed ducts — a common oversight even in new systems. Your contractor can do this for you. Quick links for building permit departments (these are cities unless otherwise indicated):
  4. Get extra quality assurance. The Energy Upgrade CaliforniaTM Home Upgrade program incorporates the three tips mentioned above and a quality-assurance review by an independent third party. It also provides rebates ranging from $1,000 to $6,500.
  5. Do your research. When hiring any professional, talk to multiple companies.
    • Ask how many similar projects they have completed, how long they have been in business, if you can see evidence of insurance coverage and if you can speak with references.
    • Check contractor licenses through the California State License Board.
    • Check BPI certifications through the Building Performance Institute.
    • Check Whole House Rater certifications through CalCERTS (search for “whole house raters”).
    • In San Diego County: meet one or more contractors in person at one of CSE’s free educational events.

Tips for Saving Money

  1. Seal and Insulate. Don’t spend money putting a new furnace or air conditioner into a home that wastes a significant amount of its conditioned air. Seal and insulate first and you may be able to downsize your furnace or air conditioner.
  2. “Whole house” rebate. Energy Upgrade CaliforniaTM Home Upgrade offers rebates of between $1,000 and $6,500 for “whole house” upgrades including high efficiency furnaces, air conditioners and water heaters (but not solar water heaters). Home Upgrade projects typically must include air sealing, duct sealing and insulation as well. You must use a Home Upgrade participating contractor to be eligible for this rebate.
  3. Solar water heating rebate. The California Solar Initiative – Thermal Program offers rebates for solar water heaters.
  4. Single-measure rebates. Your utility may offer rebates for high-efficiency appliances (typically cannot be combined with Home Upgrade rebates mentioned above). Your local government may also offer single-measure rebates. Quick links:
  5. Tax credit. The federal government offers a 30% tax credit for solar water heating systems (expires Dec. 31, 2016).
  6. Financing. Many lenders offer financing specifically for home energy upgrades.
    • Click here for information on financing options.
    • In many parts of Southern California, Cool Comfort Financing offers rates as low as 2% APR for heating and cooling upgrades for a limited time.
  7. Shop around. Get bids from multiple contractors to compare prices. See “Tips for Quality Work” to make sure you aren’t sacrificing quality for price.