Written: June 8, 2016
By Gary Sprague
For several years I worked for a plumbing and heating company, first as a journeyman and eventually a master plumber. During that time I was involved in many boiler installations, and yet I don’t remember ever having a homeowner ask for an itemized list of the installation costs. We installed a boiler, handed them a bill, and they paid.
As a homeowner, I like to know where my money is going, especially when making a large purchase like a boiler. I want to know the price of each piece of equipment and the cost of labor per hour. When I have my car worked on, I’m given an itemized bill with the cost of parts and the hourly labor charge. Although the numbers are often frightening, I want to know what I’m paying for.
The good news for homeowners is that a lot more transparency is possible. We can thank the internet for this. Way back, in olden times (5 to 7 years ago), there really was no way to find out the real cost of a boiler, unless you had a very open contractor. There was no Kelly Blue Book for boilers. And few contractors want to be totally open about prices -- if for no other reason than that they do not want to anger other contractors.
The internet as a shopping platform has changed all this. Anyone can go online and find several brands of boiler for sale at any number of websites. Not all brands – for instance, Lennox boilers can only be purchased through Lennox dealers. Finding a price for a Lennox boiler on the internet is like searching for a needle in a haystack.
But prices for many other well-known brands can be found easily on the internet through sites such as ecomfort.com and supplyhouse.com. Home Depot sells several brands of boiler, including Slant/Fin, Westinghouse and Heat Transfer Product (HTP). And some suppliers even put their boilers for sale on eBay.
This transparency has given the consumer a great deal more power and leverage when considering a boiler installation. In the past, if your contractor installed Burnham boilers, you got a Burnham boiler. Even if you wanted to research other brands and prices, there wasn’t a whole lot of information out there. But now, the consumer not only has the ability to compare brands, specs and prices with the click of a button, but he or she can also purchase the unit themselves.
This is an important change. It used to be that plumbing and heating supply houses sold only to licensed contractors. This meant that, even if you did get an itemized bill with the cost of the boiler listed, there was no way of knowing the wholesale price of the unit or how much the contractor marked it up. It could have been twenty percent or fifty percent, but you’d never know.
Today, a homeowner can purchase the boiler they want. Not just the brand, but the actual model. With a little research you can find the unit that seems best to you, whether it is a combi unit, floor or wall mount, 80% AFUE or 96% AFUE, etc. It’s so easy that you can find and order a boiler while sitting on the couch in your pajamas.
The question remains, however: Is this a good idea?
As with most things in life, though, there is often a downside to purchasing a boiler yourself.
Contractors rely on markups on materials to help pay for hidden expenses, such as insurance, tools, vehicles, etc. If the homeowner purchases the boiler directly, the installing contractor must raise their prices in other areas, or lose money.
Let’s say the cost of a boiler, including materials such as an oil tank, zone valves and baseboard, comes to $4,000. According to a couple of contractors in the New England area (who asked not to be identified) an average markup on materials is 30%. This means that on $4,000 of material, the markup would be $1,200. That’s a lot of money, and a responsible heating contractor (the kind that plans to be in business at this time next year) will need to find a way to recoup this money.
Many contractors will simply refuse to install a boiler that the homeowner has purchased.
Either way, whether you get the boiler through the installing contractor or purchase it yourself and find a responsible contractor to install it, the total price for equipment and installation is likely to be roughly the same.
There are two ways around this:
- Install the boiler yourself (which we certainly don't recommend unless you're a qualified heating contractor)
- Hire a contractor who moonlights on the side to install the unit
A final note on the "savings" available if you buy a boiler directly online or from a wholesaler: Suppliers give contractors a wholesale or volume price which is can be significantly lower than the retail price that homeowners receive. This means that, even after a thirty percent markup, the cost of a boiler purchased from a contractor may not be that different from one purchased on your own.
The actual cost of a new boiler varies from brand to brand. But there are several other factors involved in the price of a boiler.
- The efficiency of the boiler has a significant effect on its price.
- The type of boiler, whether a combi boiler, a standard unit or even a steam boiler, can make a difference of a few hundred to a couple thousand dollars.
- The size (or capacity) of a boiler has very little effect on the unit's price.
Fuel type also makes a difference. An oil-fired boiler may cost a little more than a gas- fired unit. Part of the reason for this is because an oil-fired boiler requires the installation of an oil tank, which can cost an average of $500 to $800 for a standard 275-gallon model, while gas- fired boilers are often fueled by municipal gas lines.
The Overall Cost
The overall cost of installing a boiler depends on several factors, including location, but an average cost is between $4,000 and $7,000. High efficiency units are more expensive, with an overall cost ranging from $6,000 to $10,000. These units are more likely to include features such as WiFi thermostats that allow remote operation.
Many contractors now use flat rate pricing to bid a boiler installation. One reason for this is to help combat the potential profit losses incurred when homeowners purchase their own material and equipment. Plumbers, electricians and other tradespeople have adopted this pricing model as well. HVAC and other service companies usually set their flat rates by combining their hourly rate and the estimated installation or repair time with the price of materials plus markup.
For example, if a company charges $150 labor per hour for two technicians and the estimated average time for a boiler installation is four hours, the labor total is $600. They would then combine this $600 with the expected cost of material, plus markup, to come up with a flat fee.
Overhead costs including rent, salaries, insurance, advertising, office supplies, tools and vehicles are included in the cost of labor. These are the hidden costs that most homeowners never consider when they wonder why service companies charge so much for labor.
A flat fee allows a heating contractor to give a quick and reasonable price on a boiler installation. By using this model, the hope is that money lost on a job which requires more labor than expected can be made up on another which does not take as long. Coming up with a fair yet competitive flat fee can be tricky, because a business needs to make a profit while at the same time not overcharge for their services. Contractors know that homeowners will check prices with other companies, so fees have to stay within range of what the competition is charging. For the consumer, a primary benefit from a flat fee is that it provides the total cost of the job up front: There are no surprises when you get the bill.
If you want certain features or services, there is a flat fee for each, leading to a total cost. If you are curious about the hourly rate, though, you are not likely to receive much information other than being told that there is a flat fee.
The Most Important Thing
Most contractors will agree that the quality of a boiler installation is much more important than the equipment, so it’s very important to make sure that you choose the right contractor. Find one who will do a load calculation to determine what size boiler you need. The load calculation will use factors such as roof material, window and door size and type, and climate to determine not only the correct boiler size but how much heat is needed in each room of your home. Having the most efficient unit for your home can save you thousands of dollars over time.
Some heating contractors will perform a load calculation themselves, while others prefer to have it done by an independent contractor. The cost is usually $100 to $200, which is often added to the overall cost of the installation.
Although greater transparency regarding prices and the ability to purchase a boiler direcly are significant changes, heating professionals are still required to perform the installation. The most important thing you can do to ensure a positive experience over the life of your boiler is to have a quality installation, even if it costs a little more. In the long run, a quality installation will more than pay for itself.