Due to various market pressures, heating, ventilation, and air conditioning (HVAC) unit prices have become considerably more expensive in recent years. As prices for HVAC units are expected to continue to surge in 2025, building owners are encouraged to purchase now to avoid even more inflated costs.
Below, we broke down the primary factors driving HVAC price increases, just how much prices have increased over the years, and why it’s crucial for commercial building owners to act fast.
Factors Driving HVAC Price Increases
Numerous factors are contributing to the increase in HVAC system prices. Understanding these drivers can help commercial building owners anticipate and prepare for future pricing increases.
Rising Material Costs
Rising costs of materials essential to HVAC production—like copper, aluminum, and steel— have played a significant role in HVAC price increases. According to the U.S. Bureau of Labor Statistics, domestic producers of metal and metal products have increased their selling prices by 42.07% since 2020.
The global rise in fuel and energy prices has also increased the cost of manufacturing and transporting HVAC equipment, thus driving up HVAC prices for consumers.
Changing Environmental Standards
Changing environmental regulations also push the market towards newer, more expensive products as manufacturers work to comply with evolving standards.
For example, a recent federal mandate requires the current standard refrigerant to be phased out and replaced with low Global Warming Potential (GWP) refrigerants. Beginning January 1, 2025, manufacturers can no longer make equipment designed for the current industry standard refrigerant (source: Air Conditioning, Heating, Refrigeration NEWS).
As manufacturers work to update their product lines to remain compliant, customers face delays and steeper costs.
Supply-Chain Disruptions
More than four years after the pandemic, contractors still feel the effects of global manufacturing slowdowns. Production of many HVAC components, like microchips and certain metals, was slowed, causing limited parts availability. With limited parts availability, HVAC manufacturers faced increased costs, which resulted in price increases for consumers.
Inflation
It’s no secret that the American economy is experiencing inflation in 2024. As the cost of living has risen, so have wages for HVAC technicians and manufacturers. As a result, consumers are facing steeper HVAC prices.
Labor Shortages
An aging workforce and a lack of new skilled technicians entering the field have produced labor shortages in the HVAC industry. As technicians’ availability decreases while demand increases, consumers inherit higher service costs.
A Look at HVAC Pricing Over the Years
This chart by the Federal Reserve Economic Data (FRED) provides an overview of just how much HVAC pricing has increased in recent years. The surge between 2020 and 2024 is particularly significant in the wake of the pandemic.
Source: U.S. Bureau of Labor Statistics, Producer Price Index by Industry: HVAC and Commercial Refrigeration Equipment [PCU3334133341], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PCU3334133341, October 9, 2024.
Why Commercial Building Owners Are Encouraged to Act Fast & Lock In HVAC Savings While They Can
Unfortunately for consumers, the HVAC pricing forecast shows more increases in 2025. As more environmental regulations roll out and companies struggle with inflated prices and labor shortages, building owners looking to install or replace HVAC systems are encouraged to act fast.
Thankfully, M3 Service technicians are here to assist owners in locking in savings and securing incentives, providing a sense of support and reassurance in these challenging times.
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