When a new air conditioner can cost as much as a used car, the honest first question is: where does all that money actually go? Most of it is locked in before we earn a cent. Here's the real split of every dollar you pay us — no spin.
Equipment (manufacturer) · 17%
The unit itself, bought direct from the maker.
Shipping & import duties · 20%
Freight and tariffs to get it here.
Government fees, taxes & mandated obligations · 20%
Sales tax, city taxes, permits, Title 24 testing, and mandated coverage.
Warranty reserve · 10%
Set aside to back the long guarantees buyers want.
Labor, insurance & overhead · 21%
The crew's time, four kinds of insurance, vehicles, tools, and running the business.
Our profit · 12%
What's left after every cost above — on a big number.
Add it up and a large share of the price is locked in before labor or profit ever enter the picture — equipment, freight and import duties, and a 20% stack of government fees, taxes, and mandated obligations. Because systems cost so much, homeowners understandably want long warranties, so we reserve to back those too. By the time every imposed cost is covered, what's left for the actual work and margin is a small part of a big number. That's the real reason a new system costs what it does — and exactly the math we're working to bring down for you.
Why these costs keep climbing
Three forces have pushed Bay Area prices higher in particular: import tariffs on equipment, the refrigerant phaseout from R-410A to R-32 and R-454B, and the expiration of the federal 30% tax credit. For the full market analysis — tariff timelines, permit and HERS / Title 24 costs, and a line-by-line look at a real installation — read Why Is HVAC Replacement Cost So High in the Bay Area in 2026?
Based on our real cost structure; exact proportions vary by job, equipment, and city.
See your price before you call
Our estimator breaks your install into the same line items — equipment, labor, permits, and warranty — so there are no surprises.
See Pricing