| Some are trying to cut HVAC install costs in half, and a lot of people are already working on it including Jetson (where the author works) and disclaimer my company Electric Air. Average install is about $20K in California (varies by state). Here’s how that usually breaks down: - Equipment: $3–5K for a basic swap (some go up to $10K for single system) - Direct labor: $3–4K (about 15–20%) - Materials: $2–3K - Permits and testing: around $1K total That leaves about a 45% margin to cover overhead: - Indirect labor: $2.5K (installers when not installing, install managers, attending city inspector visits, call backs when installers make mistakes) - Sales: $2K (around 10%) - Project management: $500 - Trucks: $500 - Misc costs: $1.5K (insurance, software, payment processing, etc.) Total overhead: $7K:
Net margin: 10% 10% net margin at the end of the year isn't egregious. That’s how a typical small-mid HVAC shop runs. The best HVAC shops can make these numbers be much more competitive. How do we make it better: - Bulk order equipment - Streamline direct labor - Use virtual site visits instead of in-person sales calls Do all that and you can bring a $20K install down close to half, while paying installers better and speeding up electrification. |
Any chance you can you take on solar next because if we could get a solar system for half the price we'd sign right up. All we hear about is how cheap solar is now, but the labor costs have risen more than any hardware price decreases.