[JeremyPOsborne]

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.

[harmmonica]

I'm not sure if you're going to get downvoted here for the advertisement (not by me because I find it useful and interesting), but can you be specific about what "streamline direct labor" means? Also, with the virtual site visit, are you guaranteeing the customer that the estimate you give virtually will be the ultimate price?

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.

[JeremyPOsborne]

Yeah, really trying not to advertise. But add disclaimer. Thanks for letting me know it's a bit much. I tried to tone it down. Let me know if it's better or i should delete.

streamline labor: Aligning pay incentives with installers, ensure right parts and materials, make sure customer are not indecisive on the first day, mimic the 15% of installs that are side jobs as much as possible.

Virtual site visits aren't 100%. But allows us to get a price quickly, and check electrical capability. It's a bit of a test for customers, if they are interested in snapping 5 or so photos, they probably won't buy from us.

Half the time, we then go out for a site visit in-person but we're only visiting 50% of the customers. It's less expensive, however our conversion rates go down because we're not winning the customer with our personality, etc.

If we can verify directly from photos and go straight to contract, we send out a install manager to confirm after the signature. Basically, if some giant obstacle that will stops the install, we can cancel at no cost to the customer and we do that all very quickly so they can select another bid if that happens.

Solar is tough, I am a renewable energy engineer from Australia and yes, we can half the cost of solar as seen in Australia. I think Australian are simply less fussy and legally charged than governments and home owners in US and simple installs.

I now believe large central PV will likely be more successful here. 40% of electricity is often coming from solar and wind in CA and we can just keep doing that and we'll be fine.