How Should You Charge Clients for HVAC Services?
If you’re thinking of starting your own HVAC business, or trying to figure out how to earn more money with your HVAC services, one thing to strongly consider is whether your pricing is competitive and fair, both to your customers and to yourself.
It may not be easy deciding how much to charge clients for HVAC services, but in this article, we’re going to go over some helpful tips on what standard pricing schemes look like for the HVAC industry.
Figuring out your HVAC Service Call Rates
Deciding on what you’ll charge clients for HVAC services will depend on several factors. The three biggest factors to consider will be:
- Flat rate: Charging a flat rate for visiting the clients home and examining their HVAC system is the most common practice.
- Your amount of expertise: It should go without saying, but of course you’ll be able to charge a premium if you have more experience and reputation, and you’ll charge a bit less if you’re just starting your business.
- The time and day of your visit: It’s considered absolutely normal to charge extra for home visits during the weekends, holidays, and evening hours. You can also charge extra for ‘emergency’ visits and seasonal schedule, especially in summer and winter months when HVAC services are booked up.
According to ServiceTitan, a company that offers HVAC estimating software, a majority of HVAC companies go out of business typically after experiencing their busiest year, which may sound crazy, but it’s often because of incorrect service rate pricing. The more work an HVAC company takes on at incorrect pricing, the deeper into the hole they go.
To remain competitive in the local market, you can also consider tiered maintenance packages, such as:
- New customer discounts (20 – 50% off the first service)
- Free first year service for new installations.
- Basic system checks between $75 – $125.
- Premium services up to $250, including refrigerant recharges and heavy cleaning.
So depending on variables, your HVAC services would be competitively priced between $40 – $250, depending on the type of maintenance required. Of course you’ll still charge for your time, which means you could discover the problem is electrical and the homeowner requires an electrician, but you’ll still charge for the inspection.
On top of the service fees, you also need to factor in the cost of your labor and the parts necessary for any repairs. Some common repair prices, depending on the job and HVAC model, include:
- Refrigerant leak repair: Between $200 – $1,500.
- Fuses and circuit breakers: Between $50 – $200.
- Thermostat replacement: Between $80 – $300.
Flat Rate vs. Time and Materials Pricing
Another thing you’ll need to decide is if you’ll charge a flat rate for your services, or charge based on time and materials. Both of these pricing models are popular in the HVAC service industry, and some companies may offer both, especially when projects can become larger than expected.
For example, if you charge by the hour, the customer assumes the risk that the job could take longer and thus be more costly. But in a flat-rate agreement, you’re the one assuming the risk that the job can be completed for the amount agreed upon, unless you’re padding the quote.
Overall, the time and materials pricing model is more popular among HVAC servicing companies. In an ACHR survey, one-third of respondents said they prefer flat-rate pricing, while the other two-thirds favor time and materials billing. Of the companies that did favor flat-rate systems, 56% of them use a system developed by their company, while others based their flat-rate on a national standard.
For the HVAC companies that preferred time and materials billing, the most common answer was between $60 – $70 per hour for charge-out rates, although some were as low as $40 per hour, and around 2% of respondents said they charged $100 or more per hour.
