Instead of spending tons of money to market your services to a large volume of customers, you can save money and boost income by offering additional services to the clients you already have. What is the most profitable HVAC service for your business? This guide shares inspiring ideas and trustworthy tips for HVAC pros.
Is the HVAC Business Profitable?
The HVAC-R industry is in constant demand, with countless homeowners and businesses using heating, cooling, air-conditioning, and refrigeration systems. According to PR Newswire, the HVAC market was worth over $25 billion in 2019 and is projected to reach over $35 billion by 2030. The challenge for HVAC contractors is that there’s significant competition in many states. You need to find the most valuable HVAC service options for your niche.
Thinking about getting into HVAC as a career? Start with our State-by-State Directory of HVAC License Requirements to learn more about training and licensing.
4 Most Profitable HVAC Services You Can Offer
These are just some of the most profitable niche and value-added services HVAC businesses can provide customers.
1. Zone Heating and Cooling
As more people look for home comfort and energy efficiency, zone heating and cooling have become increasingly popular. Knowing how to design and install these systems in homes and businesses can be a lucrative skill for HVAC businesses. On average, the installation cost for zoning systems is about $3,100. For more complex layouts, the price can increase to $8,500.
2. Indoor Air Quality Services
Many families, individuals, and businesses care about indoor air quality and worry about CO2, radon, asbestos, and other harmful contaminants. People with allergies or asthma may hope to reduce symptoms.
Depending on the size of the home or business, you can make approximately $500 per IAQ test. Mold testing usually costs $300–$1,000.
Of course, as an HVAC professional, you can do more than a test; you can also provide solutions. These services can provide substantial income for your company. Just radon removal can net you $800–$1,200 or more, not to mention the cost of slab sealing.
3. Mold Removal, Water Damage Remediation, or Asbestos Removal
If your area has a lot of residential customers with older homes, you may want to take IAQ services to the next level. These services may require specific training, EPA certification, and state licensing, but if you’re the only HVAC business with the capabilities, the investment may practically guarantee you consistent work:
- Mold remediation of basements: About $1,100–$3,300, according to Bob Vila, which equals around $10–$25 per square foot. This is outside the cost of sealing basement concrete if you offer that service.
- Mold removal in ductwork and HVAC units: Only HVAC pros with duct cleaning tools are equipped for this job. You can charge $600–$2,000 on average for ductwork and up to $5,000 for furnaces/air handlers.
- Attic mold removal: Some mold removal jobs in attics can make you up to $7,000 depending on the difficulty.
- Drywall work: If you have a remodeling contractor license (or just sufficient experience in some states), you can add drywall removal and remodeling services for deep mold problems. These jobs cost $20,000 or more.
- Asbestos testing: The cost of testing for asbestos usually ranges from around $225–$800 depending on the location.
- Asbestos removal: For most homes, the average cost of removal is about $2,000, or $5–$20 per square foot. Larger projects can make pros $15,000 or more.
4. Solar HVAC System Installation
According to Indeed, certified solar HVAC pros can make about $127,000 a year. This niche market pays big in areas where clients can benefit from year-round sunlight. As one of the most profitable HVAC service markets, solar system installation can net your business from $15,000–$50,000.
Interest in solar power and energy efficiency is also increasing, with Energy.gov stating that the solar job market has gone up by over 165%! At the same time, solar panel prices have gone down 70%, putting these systems within reach of other homeowners and business owners.
What Type of HVAC Career Is Right for You?
It’s important to decide ahead of time where you see your career going, specifically whether you want to own a profitable business or focus on being an expert technician with in-demand skills for hire. Highly trained techs can pursue lucrative career options approaching $100,000 a year. The following figures are taken from ZipRecruiter:
- Thermal systems engineer: Approximately $73,000–$143,000 a year
- Computational fluid dynamics (CFD) engineer: About $80,000–$90,000
- HVAC engineer: $58,000–$92,500 salary
- HVAC estimator: $48,000–$80,000 a year
- Gasfitter: About $83,000 a year
- Commercial refrigeration engineer: About $82,000 a year
- Wind turbine technicians: Roughly $60,000–$65,000 a year
What Is a Good Profit Margin for an HVAC Business?
According to Home Business Magazine, many HVAC service businesses operate on profit margins of around 6%. This translates into an income of $35,000-$70,000 a year for business owners. Ideally, you should aim higher, at 10% or 15% net profit, but this goal requires entrepreneurial experience and a solid market.
Important Tips for Making Money in the HVAC Industry
Raising your prices is one effective but often overlooked method of boosting revenue. Here are several other options.
Offer Premium Service Options
Don’t take for granted what services your customers will and won’t pay for. Some residential clients are happy to pay significantly more for “white glove” treatment, such as having your technicians change air filters every month, offering state-of-the-art testing, or providing a “hotline” for immediate assistance with smart thermostat programming.
Encourage HVAC Maintenance Agreements
Maintenance agreements can be good for your customers and your business as long as you live up to high-quality service. These contracts are recurring subscriptions for HVAC repairs and preventative maintenance. They put money in your pocket in advance, sometimes with minimal time investment.
Provide Bonus Services Instead of Pricing Discounts
Instead of cutting your profits by offering discounts constantly, you can attract attention and keep revenue by adding extras. For example, give customers “priority access” for same-day installation or 24/7 on-call repair service.
Adapt to Market Conditions
If you’re flexible, you can maximize your profits by adapting to seasonal and market changes. Use most of your team for the one area that provides the greatest return on investment.
For example, when the housing market is hot, call your real estate contacts and nudge them to send HVAC installation business your way. Instead of closing up shop in cold seasons, shift to IAQ services for residential customers.