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Commercial HVAC, Commercial Installations

Business Owner’s Guide to Commercial HVAC Installation Cost


hvac installation cost

If you’re a business owner in the market for a new light commercial HVAC system, you have probably realized that the cost of the equipment is not the only factor you need to consider. The commercial HVAC installation cost can vary widely from one installation vendor to another. So how can you compare quotes and understand exactly what you’re paying for and what you’re getting for your money? Since you’re probably not an HVAC expert, it can be a challenge to understand the quotes and what’s included.

Here’s a primer about commercial HVAC installation cost to help you compare options, understand why prices differ, and ultimately decide which proposal is right for you.

(Looking for information about residential HVAC installation? Check out this resource: The Guide to Residential Installation Cost.)

Commercial HVAC installation cost: understanding the basics

Every proposal for commercial HVAC installation cost includes both labor and materials for installation tasks. You might assume that the best way to compare is to look at the hourly labor rates and the markup on materials, but actually that practice can be very misleading.

Here’s an example. Some companies have a higher hourly labor rate because it includes costs such as insurance, supervision, warehouse costs, and project management. On the other hand, you might get a proposal with a much lower hourly rate, but the vendor adds some of that cost in as separate line items for things like insurance, truck delivery or “general conditions.”

You need to make sure you’re comparing apples to apples by examining the line items to see how and where costs are included in in the proposal.

Our best advice? ASK FOR A BREAKDOWN. A reputable HVAC installer should be happy to break down their numbers for you so you can more easily compare what’s included in quotes that are structured differently. Once you get that detailed breakdown, you’ll be able to compare commercial HVAC installation cost for the following categories of installation tasks:

  • equipment
  • piping & ductwork
  • controls
  • system startup

Here are some of the factors that affect commercial HVAC installation cost for each of these areas.

Commercial HVAC installation cost: EQUIPMENT

As you would expect, equipment cost varies by the type of system you’re installing and the number of equipment items needed for the space. However, don’t forget to take into consideration how that upfront cost can save you money down the road. For example, a VRF system is a more complex technology than a simpler water-cooled system and will often cost more for both materials and installation labor. But VRF systems as so much more efficient that you can save a great deal on energy costs in the years to come.

Related article: 7 Reasons to Choose VRF Technology for Your New Air Conditioning

Brand choice may also affect the equipment component of your commercial HVAC installation cost. Especially in New York City where space can be a major constraint, you may need to choose a more expensive brand just because the unit is small enough to fit where it needs to go. Your vendor may also be recommending a more expensive brand due to its superior reliability and longer equipment life.

TIP: Always be suspicious when an installation company is recommending rock-bottom priced equipment for a commercial installation. Some installers may recommend cheap equipment on the initial quote, then talk you into upgrading during the install process.

Another factor that adds cost is comfort-enhancing add-ons such as UV systems, electrostatic filters and humidification equipment. If a vendor has included these items, check out the benefits so you can decide if it’s worth the extra commercial HVAC installation cost.

Related article: Must-Have HVAC Features That Enhance Indoor Air Quality & Comfort

Commercial HVAC installation cost: PIPING AND DUCTWORK

Your commercial HVAC installation cost also includes the pipes that are installed in the walls and ceiling to distribute water (if you have a water-cooled system) or refrigerant (if you have an air-cooled system). For many systems you will also need ductwork to distribute cooled air throughout your space.

If you are replacing an existing system, and you don’t need to replace or redesign the existing piping and ducts, your commercial HVAC installation cost will be lower.

Another factor to consider in the pricing for pipes and ducts is the conditions during the installation. If it’s a gut renovation with the walls and ceilings taken down, the installation process is simpler and can be completed in less time, lowering the cost. On the other hand, if your business needs to remain open during the installation, that makes things considerably more challenging. Your installer will need to work in tight spaces and through ceiling grids, and may need to complete certain tasks at night, which can require overtime costs. Here’s an example: brazing (or soldering of pipes) can’t be done during the day in an occupied building since it would set off fire alarms.

Commercial HVAC installation cost: CONTROLS

Just as your equipment costs will vary depending on the complexity of the system, your costs for controls will do the same. You might have a simple local thermostat for a single unit, or you might have hundreds of retail locations all connected to a central office with monitoring and alarms. And even with a single-thermostat job, you may want remote connectivity with one of the new smart thermostats, which adds to your commercial HVAC installation cost. Again, if a vendor is recommending one of these options, be sure to do your research to decide if the extra cost is worth the benefit for your business.

Related article: Smart Thermostat Reviews

In addition to the type of controls you need, the number of connection points also affects your commercial HVAC installation cost. If you run a wire from a unit to a thermostat, that’s two points. Add in a remote sensor, and it’s four points. So if your design plan calls for 25 VAV boxes each with a remote sensor, that’s 100 connection points that need to be installed.

Commercial HVAC installation cost: SYSTEM STARTUP

Once your new system is installed, starting everything up requires additional commercial HVAC installation cost. Most of this is labor, but there is also the cost of refrigerant for an air-cooled system.

Once again, the labor cost for startup depends on the number of units and the complexity of the system. For each line and each unit, there are thermostats, wells, gauges, thermometers (known as “trim” in the industry) which all need to be tested before the system can be used.

There are also permits, filing, and inspections that may be required. Some installation companies may do the filing with the building department, or perform controlled inspections to verify that the installation was done correctly. Other types of testing may include air balancing (for air-cooled systems, verifying that the airflow on the drawings matches the airflow you’re getting, or that the airflow you’re getting matches the manufacturer’s documentation) or water balancing (for water-cooled systems, verifying that you get the right temperature through the pipe at the right flow rate).

Some vendors may also provide manufacturers’ manuals and other documentation collected on a flash drive for your convenience.

Don’t forget about maintenance

Another important factor to consider when choosing an installer for your new commercial HVAC system is whether the vendor is willing and able to service what they sell. Not all installers are willing to take on this important responsibility. Those that do maintenance are more likely to design and install your system with the proper access for servicing, which can also save you considerable cash down the road by lowering your maintenance bills.

Now is the time to learn about preventative maintenance contracts so you can keep your new HVAC system in optimal shape and get the best return on your investment. Want to learn more so you can make the best decision for your business? Grab a copy of our helpful guide: HVAC Preventive Maintenance Contracts: How to Find The Right One For Your HVAC Infrastructure.

If you’re in the NYC metro area, Arista can help. Let’s talk about your needs and implement the right maintenance agreement for your business.