What the C-Suite Gets Wrong About HVAC Spend: Why It Keeps Rising, What To Do

HVAC/R management has become one of the most challenging line items in facilities budgets, with costs climbing year after year. This is true despite many executives’ expectations of better cost control. 

As Grant Baecker from Authority HVAC explained in a recent panel discussion at the Fexa Flex Retail Summit:  “A lot of CFOs are frustrated. They see the HVAC expense line go up every year. Then they see HR issues, OSHA issues, store closures, and employees posting on TikTok that it’s 95 degrees in the store and going viral.” 

Unfortunately, those complaints are often the result of a disconnect between C-suite executives and facilities managers. This disconnect can almost always be traced back to a misunderstanding about what drives HVAC/R costs. 

Resolving these misunderstandings is so important. When everyone can get on the same page about what causes HVAC spend to increase, an organization can focus on transitioning facilities from a cost center to a protector of revenue. Let’s take a look at why HVAC spend continues rising, as well as several actionable strategies for getting control—backed by data, not gut feelings.

Why does HVAC spend keep going up—even when you think it shouldn’t?

The rising costs of HVAC/R management reflect several converging pressures. Because many executives don’t have day-to-day experience with these pressures, they may fail to recognize or adequately account for them in their budgeting. 

The more you can understand these hidden cost drivers, the more effectively your team can develop effective strategies for controlling costs. 

Market Forces Create a “Perfect Storm” of Cost-Raisers

Anyone working in the industry knows that today’s HVAC costs are unprecedented. We have found that energy costs for commercial buildings have risen between 10-20% within the past 5 years. This is occurring at the same time that the skilled labor shortage is leaving thousands of HVAC technician jobs unfilled. Staffing shortages lead to longer delays for repairs and maintenance. 

Additional Hidden Cost Drivers That Organizations Miss

Many organizations operate with critical blind spots that compound HVAC expenses. These include: 

• Reactive maintenance instead of proactive maintenance: Teams often fall into reactive maintenance cycles, even though these are notoriously more expensive.
• Poor maintenance tracking history: Without comprehensive asset data, organizations cannot identify chronic issues or predict failures. This leads to repeated emergency calls for the same equipment and missed opportunities for bulk repairs or replacements.
• Fragmented service model: When large organizations have to manage thousands of HVAC/R assets that are distributed across hundreds of facilities, they may end with inefficient systems and inconsistent maintenance protocols 
• Refrigerant loss: Undetected leaks not only waste expensive refrigerants but  also force HVAC systems to work harder, which in turn drives up your overall energy consumption

What is the solution? 

Better HVAC/R management requires three foundational elements: comprehensive asset data, proactive maintenance planning, and integrated refrigerant tracking software that connects to overall facilities management. Organizations that master these elements can shift from reactive cost control to strategic asset optimization. 

What’s the real cost of downtime, delays, and TikTok-worthy HVAC failures?

Some HVAC failures are clearly visible to everyone in the organization. However, these visible issues, like emergency service calls, equipment repairs, and asset downtime, represent only a fraction of the total financial impact of HVAC problems. The hidden costs often exceed direct repair costs by a significant margin. 

Brand Damage and PR Risks

If you’ve been unfortunate enough to be at the heart of a social media controversy, you know how much damage they can cause. Your brand can be harmed by actual and perceived failures, especially when amplified by social media. 

As Grant Baecker noted, executives now face very public backlash for their failures to manage HVAC issues. When employees post on TikTok that it’s 95 degrees in the store, and it goes viral, that can damage the entire brand–even if the problem was limited to one location and a technician was on the way. 

Viral moments have the potential to create lasting brand damage. In a situation  like this, you have the visible cost of fixing the system, but also the hidden cost of lost customers and a damaged reputation.  

Operational and Safety Impacts

When HVAC systems fail, it can cause a cascade of problems for both operations and safety. Here’s an example: An air conditioning failure in the hot Arizona summer can lead to an entire store shutting down, which in turn leads to extended downtime. That downtime impacts your sales revenue for the day, but also damages your reputation with frustrated customers whose shopping experience is affected. 

It’s not just failures that cause problems. Systems that struggle to keep up with heating and cooling demand directly affect sales performance. Customers don’t stick around when they are too hot or too cold, which is one of the reasons you need to keep things at a comfortable temperature.  

Uncontrolled temperatures also pose a safety risk to employees, customers, and other visitors to your sites. 

Regulatory and Compliance Risks

Beyond comfort issues, HVAC/R management is essential for compliance with state and federal requirements. The upcoming changes to the AIM Act, for example, set new requirements for refrigerant management. Systems that were once exempt from reporting are now obligated to follow strict guidelines or face serious fines and penalties. 

Employee Morale and Retention Effects

Poor working conditions created by HVAC failures affect employee satisfaction and retention.  When combined with public embarrassment from viral social media posts, these incidents can significantly impact workplace culture, as well as recruitment efforts.

Can HVAC management protect your revenue, instead of simply costing money?

Rather than viewing HVAC as purely a cost center, successful organizations frame it as revenue protection. Each dollar invested in proactive HVAC/R management software prevents multiple dollars in lost sales, brand damage, and emergency repairs. This perspective helps justify appropriate budgets and resource allocation.

Where are the blind spots in your HVAC/R program?

Most HVAC/R programs suffer from three critical blind spots that prevent effective cost control and risk management. These gaps often persist because organizations don’t realize they exist until failures occur. Correcting these blind spots is a big step in the right direction for transitioning to a revenue protection mindset. 

Blind Spot #1: Insufficient Asset Data and Documentation

The foundation of effective HVAC/R management requires comprehensive asset information, but many organizations operate with incomplete or fragmented data. An absence of solid, consistent data is a serious blind spot. 

Some commonly missing data include: 

• Equipment specs
• Maintenance histories
• Refrigerant types and quantities
• Service provider performance records

When you have this information, you can more effectively identify patterns, predict failures, and optimize your maintenance schedules.  The best way to get this data, of course, is to invest in highly effective asset management software.

Refrigerant Tracking Software and AIM Act Compliance Gaps

Regulatory requirements have significantly expanded, but many organizations remain unprepared. Organizations often lack systems to track refrigerant usage, leaks, repairs, and disposal throughout the lifecycle of equipment assets. This creates compliance risks and missed opportunities for cost savings through leak detection and refrigerant optimization.

Disconnected or Inadequate Reporting Systems

Many organizations rely on manual tracking. They rely on basic tracking tools and spreadsheets to keep track of refrigerant assets and compliance data. 

These fragmented approaches create inefficiencies that can slow down your operations and leave your organization exposed to a number of issues, including compliance issues, unexpected repair expenses, and increased downtime in your facilities.

If your organization cannot answer basic questions about your HVAC/R performance, costs, or risks, how can you develop effective improvement strategies or justify budget requests to company leadership?  

How do top-performing ops teams get HVAC under control?

Leading operations teams have developed systematic approaches to HVAC/R management that deliver measurable results. Their success stems from integrated technology platforms, proactive maintenance strategies, and data-driven decision making.

Combining a facilities management CMMS platform and Fexa Trakref for refrigerant management gives you access to a centralized HVAC/R asset management system. 

The integrated approach provides several key advantages:

• Unified data management
• Automated compliance
• Proactive leak detection 

The Importance of Transitioning from Reactive to Proactive Maintenance

Transitioning from reactive to preventive maintenance is a key step for top-performing ops teams. To do this, you have to be able to access and analyze historical data. This information will then drive your current maintenance strategies. 

When you use Fexa CMMS + Trakref integration, your internal teams can identify problems before they arise. This helps you avoid disruptive emergency repairs. 

Check out our Preventive Maintenance Guide to learn more about switching from reactive to preventive maintenance. 

Benefits of making this switch include: 

• Reduced downtime and improved operational continuity
• Lower repair and replacement costs
• Extended asset lifespan
• Improved compliance rates and risk mitigation 
• Increased productivity and efficiency
• Optimized inventory and resource allocation
• Enhanced vendor and contractor coordination
• Better data-driven decision making
• Improved sustainability 

Getting HVAC Costs Under Control is a Team Effort 

When it comes to HVAC, cost control requires a lot of collaboration. This includes:

• Facilities managers who understand what is driving costs
• Executives who are willing to invest in strong HVAC/R systems 
• Store team members who report issues quickly and consistently
• Qualified service providers and vendors who do great work

Technology can support all of these individuals. Whether you’re talking about a truly flexible CMMS, regulatory tech resources, or a refrigerant management integration like Fexa Trakref, the fact remains: good technology supports companies like yours in their cost control goals.  

How do you explain HVAC spend to your CFO (and get the budget you need)?

To get your CFO on board with the budget you need, it’s important to consider their priorities and communicate the ways that HVAC/R spending can support those priorities. 

You must demonstrate that proactive investment prevents larger financial losses.  When speaking with your CFO, frame HVAC/R management as revenue protection rather than just cost control by connecting operational risks to measurable financial consequences.

To secure a budget approval, you need to speak the language of the C-suite. CFOs and other decision-makers need to see the tangible, measurable benefits of an investment before they approve a capital expenditure.

Make this work by: 

• Providing concrete data on historical reactive maintenance costs, downtime impacts, compliance risks, and refrigerant loss expenses
•  Showing how repair costs can be controlled with a proactive approach
• Telling “the story” of why you need these budgetary expenses; help the CFO see why these costs are necessary

The most successful budget conversations use integrated HVAC/R management software data to demonstrate ROI through improved efficiency, reduced downtime, and compliance management. This shows CFOs exactly how investments translate into measurable business value.

Are you ready to take control of your HVAC/R costs? 

The Fexa CMMS + Trakref Native Integration provides the comprehensive data and automation needed to shift from reactive spending to strategic asset management. Request a demo today to see how integrated facilities and refrigerant management can transform your operations and budget conversations.