How to Start an HVAC Business

Get EPA Section 608 certification first

Certification comes before the truck, the logo and the first customer, because it decides whether you can service refrigerant systems and buy refrigerant at all. Under Section 608 of the Clean Air Act, EPA requires technicians who maintain, service, repair or dispose of equipment that could release refrigerant into the atmosphere to be certified ¹. The EPA Section 608 certification entry covers the exam itself. Here is what matters when you're setting up a company.

EPA offers four types of certification, each earned by passing an EPA-approved test specific to that kind of equipment ¹:

Type II is the type that covers typical residential comfort cooling work: EPA has described it as the certification for technicians who service high-pressure equipment such as unitary house air conditioners ². If you expect to work on small appliances or low-pressure equipment as well, getting Universal now saves you a retest later.

Tip: If Universal is the goal, take the core exam proctored. EPA says a core test taken open book can't be used toward Universal certification ¹.

Three more rules from the same program shape how you set up the shop:

• Refrigerant sales are restricted. Since January 1, 2018, the sales restriction has covered HFCs and other substitute refrigerants, not only ozone-depleting ones, so to buy refrigerant from a distributor you have to be certified or show that your company employs a certified technician ³.
• Venting is prohibited. EPA prohibits intentionally venting refrigerant, HFCs and other substitutes included, while maintaining, servicing, repairing or disposing of equipment ⁴. Recovery gear is part of the day-one kit, not an upgrade.
• Recovery machines must be certified. Recovery and recycling equipment has to be certified by an EPA-approved testing organization, and EPA has approved AHRI and UL for that ⁵. Look for the certification label before you buy a used machine. If an older startup checklist tells you to send EPA a form saying you own recovery equipment, skip it: EPA no longer requires that for stationary equipment ⁶.

Find out what your state and city require

EPA certification is federal; contractor licensing is not. Each state sets its own rules for HVAC contractors, and local building departments set permit requirements on top, so the answer that counts comes from your state licensing board and your city or county. Two states show how far apart the rules can be.

Texas. The Texas Department of Licensing and Regulation (TDLR) licenses air conditioning and refrigeration contractors in two classes: Class B covers cooling systems of 25 tons and under and heating systems of 1.5 million BTUs per hour and under, and Class A covers any size ⁷. To qualify, you need 48 months of practical experience under a licensed contractor within the past 72 months, or 36 months within the past 48 if you've held a technician certification for the past 12 months, and then you must pass the licensing exam ⁷.

California. The Contractors State License Board's C-20 classification (warm-air heating, ventilating and air-conditioning) covers fabricating, installing, maintaining, servicing and repairing those systems, along with their ducts, registers, flues, thermostatic controls and air filters ⁸. California's license exemption for minor work rose from $500 to $1,000 on January 1, 2025, but it doesn't apply if the job needs a permit or if you hire anyone to help with it ⁹.

Your state may work like neither one. When you contact your board, ask:

• Which license covers residential HVAC service and replacement, and whether gas piping, electrical connections or ductwork fall under separate licenses
• How much documented experience you need, and who has to sign off on it
• Whether a qualifying license holder can license the company if you don't hold the license yourself
• What insurance, bond or financial proof keeps the license active
• Whether your technicians need their own state license or registration

Then ask your local building department which HVAC jobs need a permit, who is allowed to pull it, and which inspections follow. Your replacement process will be built around those answers.

Line up insurance around HVAC risks

Get insurance quotes before you set prices, because in some states coverage is a condition of the license. Texas requires licensed air conditioning and refrigeration contractors to keep commercial general liability insurance in force the whole time the license is active, with minimums by class. For Class B, that's $100,000 per occurrence and $200,000 aggregate for property damage and bodily injury, plus $100,000 aggregate for products and completed operations ^{7 10}.

That products and completed operations line deserves attention in this trade, because an installer's exposure doesn't end when the crew leaves. Picture a condensate drain that backs up into a finished ceiling months after a new system goes in. Talk to an agent who writes HVAC contractors and cover three policies:

• General liability, including products and completed operations, at the limits your state and your commercial customers require.
• Workers' compensation once you hire. Requirements vary by state, and attics, rooftop units and ladders are routine in HVAC work, so have coverage settled before your first employee starts.
• Commercial auto for the service vehicle. Tell the agent what rides in it (refrigerant cylinders, a nitrogen tank, a recovery machine, ladders) and ask how tools and stock are covered if the van is broken into.

Plan for the refrigerant transition

You're opening in the middle of a refrigerant changeover, and it shapes the tools you buy, the training you need and the stock you carry. The American Innovation and Manufacturing (AIM) Act, enacted December 27, 2020, directs EPA to phase down HFC production and consumption by 85% from historic baseline levels by 2036, to facilitate sector-by-sector transitions to next-generation technologies, and to set rules that maximize reclamation and minimize releases ¹¹.

For residential and light commercial air conditioners and heat pumps, the refrigerant limit is a global warming potential (GWP) of 700, with restrictions that took effect January 1, 2025 ¹². A final rule EPA issued on May 26, 2026 removed the installation deadline for systems whose specified components were all manufactured or imported before January 1, 2025, so equipment built before the cutoff, such as remaining R-410A stock, can still be installed ¹³. Components needed to repair existing systems aren't restricted either ¹².

For new equipment, EPA's SNAP program lists A2L refrigerants including R-454B and R-32 as acceptable, subject to use conditions, in residential and light commercial AC and heat pumps ¹⁴. A2Ls are mildly flammable, and the hardware shows it: A2L cylinders have left-hand threads and a red band or red top that marks a flammable refrigerant ¹⁵. For a new shop, that means:

• Tools. Many tools used with A1 refrigerants also work with A2Ls, but electronic leak detectors, vacuum pumps and recovery machines must be compatible with A2Ls, so verify with the tool's manufacturer ¹⁵. You're buying most of your kit new anyway, so buy A2L-compatible from the start.
• Training. Get A2L safety training before your first A2L install (ACCA offers it ¹⁶), and follow each equipment manufacturer's installation instructions.
• Stock. You'll service older systems while you install new ones, so expect to carry more than one refrigerant, with the fittings and secure cylinder storage for each. Price refrigerant per pound from what it costs to restock, as how to price HVAC jobs explains.

If you take on larger commercial equipment, one more rule applies: since January 1, 2026, leak repair requirements cover appliances holding 15 pounds or more of HFC refrigerant (or a substitute with a GWP above 53), with a 10% leak rate threshold for comfort cooling, while the residential and light commercial AC and heat pump subsector is excluded ¹⁷.

Open distributor accounts before the first heat wave

Your HVAC distributor is where equipment, parts and refrigerant come from, so open accounts before a no-cool call sends you to the counter. Bring what the counter will ask for:

• Your 608 card, or written evidence that your company employs a certified technician, for refrigerant purchases ³
• Your contractor license number, where your state requires one
• Business registration, tax ID and a certificate of insurance
• Your accountant's answer on how sales tax applies to the equipment and parts you install, since the treatment differs by state

Then ask each distributor:

• Which equipment brands it carries, and what A2L tools and training it offers
• What credit terms it starts new accounts on, how the limit grows, and whether it requires a personal guarantee
• How warranty parts are handled at the counter
• What its hours are in peak season, and whether it delivers to job sites
• What the return rules are for special-order equipment

A second account gives you a fallback when the first is out of a part in July. Credit terms matter because replacement work puts large equipment bills on your account before the customer pays you.

Example: Say the equipment for a replacement costs you $5,000 on account, due in 30 days. You install on day 3 and invoice that afternoon. If the customer pays at completion, the job covers its own equipment bill. If the customer pays 45 days later, you float $5,000 for two weeks past your due date. Three of those in the same hot week can drain a profitable new shop's bank account.

Settle your payment terms before you sell the first replacement. How much deposit to ask for covers deposit amounts and the state laws that cap them in some places.

Weigh manufacturer dealer programs

Dealer programs can give a small shop warranty, financing and marketing support, but they come with commitments, so read the terms before you tie the business to one brand. Ask your distributor about programs for the brands it carries, and get answers in writing:

1. What it requires: training, minimum purchases, insurance levels, and how you display the brand on your website and trucks.
2. What it gives you: warranty terms you can offer customers, consumer financing, co-op advertising money, technical support, leads.
3. What happens if you leave: to your pricing, your marketing materials and the warranties you've already sold.

Whatever you install, read each manufacturer's warranty terms for registration requirements and deadlines, and make registration part of closing out every install, with model and serial numbers on file.

Startup cost categories

Your startup budget depends mostly on one decision: service and maintenance only, or replacements too. One way to keep the number down is to start with service and add replacements once distributor credit and cash reserves can carry the equipment. Get quotes for each category below and build your own total.

Price from your own costs

Don't set prices by copying the shop down the road; its costs aren't yours. Start with what an hour of your time costs to deliver, including the unbillable hours spent driving, at the supply house and on callbacks (how to set your labor rate). Then use how to price HVAC jobs to turn that into a diagnostic fee, flat-rate repair prices and replacement proposals.

Build a base of maintenance agreements

HVAC demand follows the weather, so the mild weeks of spring and fall can go quiet. A service agreement built around a spring cooling visit and a fall heating visit fills those weeks with scheduled work, and it gives you a list of systems you'll eventually replace.

Example: Suppose you sign 150 agreements, each with a spring and a fall visit. That's 300 visits a year. At 5 tune-ups per tech per day, that's 60 tech-days of work booked ahead into spring and fall. Every visit is also a chance to spot equipment near the end of its life before it fails on the hottest day of the year.

The HVAC seasonal playbook lays out the year month by month, and how to get more HVAC customers covers signing the first agreements.

Know the labor market before you hire

Federal data gives you a starting point for what techs cost and how hard they are to find. BLS reports a median annual wage of $61,010 for HVAC mechanics and installers in May 2025 ¹⁸. It projects employment to grow 11% from 2025 to 2035, much faster than the average for all occupations, with about 40,600 openings a year, and it names commercial construction (including data centers) and residential construction as drivers ¹⁸.

Two things follow for a new owner. That wage figure is a useful check on your own pay: if the business can't pay you at least what you'd earn as an employed tech, something in your pricing is off. And you'll compete with commercial contractors and larger shops for experienced people, so budget realistic pay or plan to train. Hiring your first HVAC technician covers verifying 608 cards, apprenticeships and worker classification.

A simple order of operations

1. Pass the EPA 608 exam for the equipment types you'll work on.
2. Confirm your state license and local permit rules, and start the experience paperwork if you need it.
3. Form the business and get insurance quotes.
4. Open one or two distributor accounts.
5. Buy A2L-compatible tools and set up the van.
6. Set your labor rate and build a price book.
7. Launch with maintenance agreements and a Google Business Profile.