Fall Prices & Lessons from 100 Heat Pumps

There are open walk-throughs until the end of August. But first, lessons learned.

Summer, for us, in Rockport

Usually, on a post like this, I will write about how we are gearing up for another bulk deal, this time around 50 to 65 installations.

I will talk about the equipment that we’re installing.

I’ll lay out the prices and tell you that now that the summer heat waves of late June and 4th of July have passed, we’re in a better position to tackle system designs and installations en masse once again.

Yes, this announcement will have elements of that, but it will also be something else. I want to be transparent about how difficult it is to maintain a fleet of heat pumps, and to take accountability for installations that didn’t go right.

Open Walkthroughs

To get a walkthrough, go here. Enter your info, bypass the $150 reservation fee with code FRIENDOFLC, and then upload your required documents.

NOTE: auto-generated price reflects summer pricing. Fall pricing is live for LC members, disregard the initial estimate screen. Fall pricing officially kicks in on Manatee on 9/1.

Pricing

This fall, you can expect prices on par with what we had for the spring. I can’t announce exactly why yet, but there is a reason why we can continue to offer prices at the lower ends of the market.

Several notable changes include:

• No more hot attic adder. This was here specifically for the summer. We are now past the hottest days, so attic work is now standard.

• There is a price adder for 3 units or more due to code requirements.

• Somerville installations will now incur an extra $1,500 fee to reflect the difficulties of working with the Somerville permitting department. I lay all of that out in painstaking detail here.

What Have We Learned?

It’s really, really hard maintaining a fleet of 100+ heat pumps.

We created Manatee as a contracting entity so we could run an academic hospital of sorts. I’m here to tell you that the contractors are right, when they say

You might not want to go with the random contractor that gives you the least expensive quote because they won’t be there to show up for service calls.

How We Make Money

Fact of the matter is, every single contractor is going to have service calls. And while it’s really easy to start up a contracting company in the first year and just do a bunch of installations, it’s really difficult for contractors to stay in business long term because:

1. They need reserves to grow their team & buy more equipment.

2. In the second year and the third year, they essentially have to do everything that they’re doing the first year, plus maintenance on an existing fleet of 50, 100, maybe 200 pumps that they have a labor warranty covering.

Say you install 100 heat pumps out in the field like us. For us, I would estimate roughly 15% of our units have had some sort of an issue, either major or minor, in the past year, in addition to maybe about 10% of the units that had small issues immediately after the installation, which we would classify as punch-out items before they get finished.

It’s really difficult to tackle all of these unless you have a dedicated service technician on your team whose job is to handle service. Fortunately for us, we have that person on our team (and we made it a priority to have this person on our team), and I can confirm that it’s

1. Really difficult to find good service technicians

2. You do have to allocate a portion of your installation costs to fund service calls & situations where things will go wrong

3. Things do, inevitably, go wrong sometimes

The 4 Types of Service Calls

Condensate Leaks

You’ll typically get a wave of this in the first hot week of the year because the heat pumps that you installed in the fall and the winter haven’t had to go through a dehumidification cycle yet. This is most common with ductless units because every single mini-split has a condensation tube that could, for whatever reason, not be draining correctly.

Sometimes, of course, it could also be other things. For example, if your copper refrigerant lines are exposed because you had to replace tray cables with duct strips, condensation will form and it will drip out of your line covers. It looks like this:

Note the droplets of water on the flare nut

You’ll want to make sure that it’s wrapped together nice and snug, like this:

If you have a condensate pump on your mini-split, which might be the case over in multi-family installations (or finished basement units below grade), you’ve got to make sure that the condensate pump is working. In most cases, they do, but in one case we’ve had to replace 2 condensate pumps this summer.

Why Heat Pumps are Hard in Multifamily

Low Refrigerant & Compressor Overheating

This is the other notification you’ll get during the first hot week in summer. Any condensers that were installed without sufficient refrigerant end up getting an error like this:

There are two reasons you might run into this:

1. There are really long refrigerant lines in this installation, and the installation requires extra refrigerant beyond the factory-charged amount in the condenser. The installation crew may not have charged that extra amount.

2. There is a refrigerant leak somewhere, probably along the flare fittings.

Now, what was really interesting to us from a performance standpoint was that the small handful of systems that ran into this particular issue seem to have gone through the heating season just fine. These heat pumps were installed in the fall, made it through the entire winter, and now we’re getting this compressor overheating issue.

I suspect one particular reason might be due to the fact that, in the winter, if your compressor is working extra hard and overheating, the ambient temperature outside is probably like 30° or something. In the summer, during a particularly hot day when a compressor is working extra hard because there’s not enough refrigerant, the ambient temperature outside is maybe 95°. If the sun is shining directly on the condenser, you’re probably looking at 110°. That adds to all the heat generated by the compressor as it works.

Combined, all of those stresses add up. We had to reduce installation capacity to address this in June, which is why we raised prices during early summer.

Summer Pricing Is Now Live

Defrost Not Working

Defrost DID work here, by the way, and does for most installations

This is relevant during tough winters involving multiple blizzards. I wrote a lot about this already. We’re currently working on something cool that I will announce later towards the end of the year that, perhaps, will allow us to detect whether defrost cycles are working properly before big snowstorms (among other things).

Decoding Defrost, & Saying Goodbye to W'26

You can read more about that in the article above. The part that I want you to understand is that whenever a problem like this takes place, whoever is the designated service technician needs to get out there in 13° weather and figure out what’s going on in the defrosting system. This really sucks.

Thermostat & Sizing Issues

Discharge temp for a room that’s about 65°F. We’re not going lower.

With ducted systems, typically you have a single thermostat controlling a single air handler. But things can get pretty funky in specific situations:

• If you are using two thermostats connected to two air handlers connected to one condenser that require translation adapters (so, older Daikin R-410A models), the thermostats aren’t going to communicate with each other in the condenser in a proper way. Instead of independently operating the air handlers, one particular thermostat may override the other thermostats’ set points or configuration setting. We have not seen this with Mitsubishi in similar configurations, and Daikin’s new units do not require transition adapters; however, when you run into this problem, it is very difficult to resolve.

• LG thermostats in particular seem to have incidents where the air handler overshoots or undershoots the set point not because a system is oversized or undersized, but because of internal configuration settings.

Expectation Setting

There are also incidents where sometimes people are unhappy that their system is not so oversized that they can cool themselves down to 60° in the summer.

I’m here to tell you if you want a room to feel like a freezer, you probably should not go with us. In any case, that is also bad practice from a system design standpoint, because the official Air Conditioners Contractors of America methodology (yes, the people who created Manual J, S, etc.) says:

The indoor cooling design temperature is 75 F “unless superseded by code.”

This is reflected in the actual Manual J software that we use, Amply:

Yes, I understand that most people like to keep things cool at 72 or 70 if they’re really feeling it, but if you’re looking for a system that can cool you down to 60°, I am not going to design that system.

Warranties

That vaunted Mitsubishi warranty is actually not as valuable as you think. I mean, it is valuable, but the process to actually activate the warranty and get a unit swapped out is quite a pain. What actually happens is that your supply house will tell you to go talk to Mitsubishi, the corporate entity above them. Mitsubishi will tell you to go through a process where your service technician has to check every single thing possible that could have gone wrong (even if you know specifically the thing that has gone wrong) to swap out the unit.

In our case, it’s a reversing valve gone wrong. Due to the nature of the reversing valve and how central it is to the condenser, it doesn’t really make sense to cut the reversing valve and swap it out, so you need a new condenser. This took us weeks¹ to do.

I suppose anybody who’s ever claimed a warranty - from a blender to a car - isn’t surprised by this.

Less Is More; Good Reviews on Midea

These days, we try to do less. By that, I mean we try to install simple systems, systems without a lot of complexity, because the more complex there is, the more failure points there are.

To that extent, we are sticking with Mitsubishi and Daikin for our equipment of choice. Midea’s EVOX G3 air handlers have also been surprisingly reasonable; we’ve installed about 6 condensers out there and they all handled the summer very well.

We will be installing a couple of Midea U-shaped window unit heat pumps as well, and we will report back to you how the installation process goes. Wirecutter seem to like them. I think it’s super promising, and I’m really hopeful that packaged systems like that can help you avoid all the complexities² I just talked about here, not to mention the permitting stuff.

Midea’s phone app. Actually pretty good! This can get you to 73, but again, I’m not going to size a system to cool you down to like, 60.

What’s Next?

There you have it: all the learnings we have from the past year.

I think ultimately everybody looking for a heat pump thinks they’re buying very similar things, but even within subcategories, they might be looking for different things. Perhaps you are somebody who is okay having air conditioning and you won’t lose sleep if your system keeps it at 71 instead of 70 for most days in the summer. If so, we can help you.

If you are somebody who wants the thermostat to be within a degree every single time in all conditions, including the hottest of heat waves and the coldest of winter deep freezes, then you’re gonna have to pay a lot more for that. It’s like the difference between salmon sushi from a Japanese grocery store vs. salmon sushi from Michelin-starred Bar Miller:

Tenichi Mart, which I dare say is the FAR BETTER value. I will die on this hill

Bar Miller, NYC, which I cannot afford but I’m sure is very good

I’m very proud of my team, and I’m also very thankful that we have crews that work really, really hard. It’s difficult to make everybody happy in every single way, but I’m glad we’re able to make most people happy.

When I see another HVAC truck out there these days, I don’t think of them as my competition, but rather I feel empathy for the guys who are probably driving around on the hottest days of summer answering service calls or doing installations in the winter. I think the corporate entities might make decisions that lead to high prices, especially if you’re a private equity firm, but for the guys on the ground, no, I appreciate them. We need these people.

Hopefully, in the coming quarters, we’ll be able to deliver some cool improvements that make it all a little bit easier. I’ll talk to you then.

Enjoy the rest of summer!

1. I imagine if this was during a winter blizzard scenario, the supply house would simply supply you with a condenser that you can use temporarily. You would send the old condenser back, and then they would run all the tests on the condenser once it’s at the supply house. This also requires the supply house to have a service technician, which they don’t always have.

2. Just like how balcony solar can cut through so much of the logistical complexities of getting solar