What to Include in a Yearly HVAC Budget for Your Commercial Property in Central Texas

Budget season for commercial properties in Austin and Central Texas often means scrambling to justify HVAC line items to ownership while hoping nothing major breaks before the next cycle. The problem is that most HVAC budgets are built on guesswork. Property managers who rely on last year's spend or a flat percentage of square footage often find themselves short when emergency repairs hit, or they over-allocate to reactive fixes instead of preventive maintenance that would have avoided them in the first place. Commercial HVAC maintenance should be the foundation of your budget, not an afterthought. This guide walks through exactly what to include in a yearly HVAC budget, what most property managers forget, and how to avoid the surprises that derail even the best-laid plans.

The Four Pillars of a Commercial HVAC Budget

A complete commercial HVAC budget rests on four pillars: preventive maintenance, emergency repair reserves, energy costs, and capital replacement planning. Skip any one of these and you're either overspending on emergencies, underfunding maintenance, or pushing capital replacements into crisis mode. Here's how each fits together.

1. Preventive Maintenance Budget

Preventive maintenance is the single most cost-effective line item in your HVAC budget. For commercial rooftop units in Central Texas, plan for $500 to $800 per unit annually for a structured preventive program. That typically covers two visits per year (before cooling season and before heating season), filter changes, coil cleaning, refrigerant checks, electrical inspections, and detailed service reports with actual measurement data.

The exact cost depends on unit size, system complexity, and whether you're on a comprehensive program that includes priority scheduling and parts discounts. High-use buildings such as restaurants, medical facilities, or data centers may need quarterly service, which pushes the annual cost toward the higher end of that range. The key is treating this as a fixed, non-negotiable expense. Buildings that cut maintenance to save money almost always spend more on repairs within 12 to 18 months.

Pro Tip: If your preventive maintenance budget is less than 60% of your total HVAC operating budget, you're likely underspending on prevention and overspending on reactive repairs. The goal is to flip that ratio over time.

2. Emergency Repair Reserve

Even with excellent preventive maintenance, some repairs will be unplanned. Capacitors fail, refrigerant leaks develop, and compressors reach end-of-life. The question is whether you have the cash set aside or you're scrambling when the call comes in.

Industry guidance suggests reserving 10% to 15% of your annual preventive maintenance budget for emergency repairs. If you spend $24,000 per year on preventive maintenance across your portfolio, that means setting aside $2,400 to $3,600 for unexpected repairs. Properties with older equipment or a history of deferred maintenance should lean toward the higher end. Newer buildings with comprehensive maintenance programs may stay closer to 10%.

This reserve is not a slush fund. It should be tracked separately and used only for true emergencies: after-hours calls, unexpected component failures, or repairs that cannot be deferred. If you consistently exceed this reserve year over year, that's a signal that either your preventive program is insufficient or you have equipment approaching end-of-life that should be in your capital plan instead.

3. Energy Costs

HVAC typically accounts for 40% to 60% of a commercial building's energy consumption. In Austin, where cooling season runs from April through October and peak demand charges can spike summer bills, energy is a major budget driver. Your HVAC budget should include a line item for energy efficiency improvements, even if it's modest. That might mean:

• Duct sealing and insulation: Properly sealed air distribution systems can save up to 20% on heating and cooling costs. A one-time investment of $2,000 to $5,000 for a mid-size building often pays back within two to three years.
• Smart thermostat upgrades: Austin Energy offers rebates for Power Partner thermostats and guest room controllers. Upgrading controls can reduce energy waste from overcooling or heating unoccupied spaces.
• Filter upgrades: Higher-efficiency filters can improve airflow and reduce strain on equipment, though they need to be balanced against increased static pressure. Your commercial HVAC maintenance provider can recommend the right balance.

Don't treat energy as a fixed cost you can't influence. Small investments in efficiency often yield measurable savings within a single budget cycle, and Austin Energy commercial rebates can offset a portion of upgrade costs.

4. Capital Replacement Planning

Commercial HVAC equipment has a typical lifecycle of 15 to 20 years. After that, repair costs climb, efficiency drops, and reliability becomes a gamble. The property managers who avoid budget surprises are the ones who plan replacements two to three years in advance.

Include a capital reserve line item in your HVAC budget. A common approach is to set aside the equivalent of 5% to 7% of replacement cost annually for each unit. For a rooftop unit that would cost $18,000 to replace, that's $900 to $1,260 per year going into a reserve. When the unit reaches 15 years, you have a meaningful down payment on the replacement and time to schedule the work during a low-demand season rather than as an emergency.

Sample Budget: Mid-Size Austin Office Building

To make this concrete, here's a sample HVAC budget for a 25,000-square-foot office building in Austin with eight rooftop units. Assume the building has a mix of 5-ton and 7.5-ton units, with an average age of 12 years.

This building would allocate roughly $0.62 per square foot annually for HVAC. That's in line with industry benchmarks for well-maintained commercial office space in Central Texas. Buildings with older equipment, higher occupancy, or more demanding use (e.g., medical, restaurant, retail) often run $0.75 to $1.00 per square foot or higher.

Notice that preventive maintenance and the capital reserve together account for about 80% of the budget. That's intentional. The goal is to spend on planned maintenance and planned replacements, not on emergency repairs that cost two to three times more than they would have if addressed proactively.

What Most Property Managers Forget

Austin Energy Commercial Rebate Opportunities

Austin Energy offers commercial rebates that can reduce your HVAC costs significantly. The HVAC tune-up rebate pays up to $680 when you use a participating contractor for preventive maintenance. That can offset a meaningful portion of your annual PM spend. Additional rebates are available for:

• HVAC replacement with high-efficiency equipment
• Chillers and cooling towers
• Energy recovery ventilators
• Variable frequency drives (VFDs) and EC motors
• Power Partner thermostats and guest room controllers

These programs are first-come, first-served and operate on annual budgets. Include rebate research in your budget planning process. A quick review of Austin Energy commercial rebates at the start of the fiscal year can identify opportunities to reduce net HVAC costs.

The HVAC Vitals Report and Budget Planning

One of the biggest challenges in HVAC budget planning is lack of visibility. If you don't know which units are trending toward failure, you're either underfunding the emergency reserve or overfunding it "just in case." Neither approach is optimal.

The HVAC Vitals Report solves this. It's a free 50-point commercial inspection that includes a 12-month repair forecast. Instead of guessing what might break, you get a month-by-month projection of anticipated repairs and their estimated costs. That forecast is built from actual equipment condition data: refrigerant levels, electrical readings, compressor performance, and component wear. For property managers who need to present HVAC budgets to ownership, this is the baseline that turns guesswork into defensible numbers.

The report also includes a vendor performance audit. If your current maintenance provider isn't documenting what they find, or if there's a gap between their reports and the actual condition of your equipment, you'll see it. That audit helps you decide whether to reallocate budget from your current vendor to a program that actually protects your investment.

Energy Efficiency Upgrade Considerations

When planning your HVAC budget, don't overlook the payback from efficiency upgrades. A building spending $5,000 per month on energy during peak summer could save $500 to $1,000 per month with proper duct sealing, upgraded controls, and well-maintained equipment. Over a year, that's $6,000 to $12,000 in savings. Allocating $2,000 to $3,000 in your budget for efficiency improvements can yield a positive return within the same fiscal year.

Austin Energy's commercial rebate program can reduce the net cost of many of these upgrades. Custom rebates are available for projects that don't fit standard categories, so it's worth consulting with a participating contractor about what might qualify.

Capital Replacement Planning: The 15-20 Year Lifecycle

Commercial HVAC equipment doesn't last forever. Rooftop units, chillers, and split systems typically reach end-of-life between 15 and 20 years. After that, repair frequency increases, efficiency drops, and the cost of keeping old equipment running often exceeds the cost of replacement.

Your capital replacement plan should:

1. Track equipment age. Every unit in your portfolio should have an installation date (or best estimate) in your asset database.
2. Reserve annually. Set aside 5% to 7% of replacement cost per unit each year. By year 15, you have 75% to 105% of replacement cost accumulated.
3. Schedule proactively. Plan replacements for fall or spring, when demand is lower and contractors have availability. Emergency replacements in July cost more and take longer.
4. Factor in rebates. Austin Energy commercial rebates for high-efficiency equipment can reduce net replacement cost. Build rebate eligibility into your equipment specifications.

New commercial HVAC systems typically deliver 30% to 40% better efficiency than equipment from 15 years ago. The combination of lower energy costs, fewer repairs, and improved tenant comfort often justifies replacement before the old unit fails completely.

Putting It All Together

A complete yearly HVAC budget for a commercial property in Central Texas includes preventive maintenance ($500 to $800 per unit), an emergency reserve (10% to 15% of maintenance spend), energy efficiency considerations, and capital replacement planning for equipment in the 15-20 year lifecycle range. Property managers who build their budgets around these four pillars spend less on HVAC over time, experience fewer tenant complaints, and have the data they need to justify requests to ownership.

The missing piece for most buildings is visibility. If you don't know the actual condition of your equipment, you're budgeting blind. The HVAC Vitals Report provides that baseline: a 50-point inspection, vendor performance audit, and 12-month repair forecast that turns budget planning from guesswork into a data-driven process.

CG Service Pros serves commercial properties throughout Austin, Round Rock, Cedar Park, Georgetown, and the surrounding Central Texas area. We help property managers build maintenance programs that protect their investment and keep tenants comfortable. If you're planning your HVAC budget for the coming year and want a clear picture of what to expect, our free HVAC Vitals Report is the place to start.

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Have questions? Call us at (512) 766-5079 or visit our contact page to schedule service.