In today's HVAC market, the variables around pricing are in constant flux — whether it is costs associated with labor, raw materials, transportation, tariffs, or A2L equipment premiums, contractors are dealing with more and more consequential disruptors that are putting increased pressure on margins. The solution, according to industry pricing consultants and experienced contractors, is not to react to every cost increase with a knee-jerk price change — nor to ignore increases until profitability has already taken a hit.
Steve Howard, founder of ACT Group Inc., said the real issue in a volatile environment is not simply how often contractors revisit pricing. It is whether they have a disciplined pricing strategy in the first place. A pricing-for-profit process allows you to know when and how much to adjust pricing during a rapidly changing economy. Howard's recommendation: review gross margin after every job, identify which cost lines caused any miss against the margin target, and take action accordingly — building a continuous feedback loop rather than relying on annual or quarterly pricing reviews that cannot keep pace with the frequency of current cost changes.ACT Group Inc.
Job-by-Job Quoting Is Becoming the Norm
Mike Luongo, president of Total Home Supply in Pine Brook, New Jersey, said from his perspective on the distribution side, many contractors are no longer relying on set schedules to adjust pricing — instead they are responding to the project in front of them. Due to the instability of the market, pricing can fluctuate, and unless the contractor is stocking products, they seem to be quoting based on the most current cost from the distributor at the time of the job. The job-by-job approach is especially important in commercial and industrial work, where no two projects are the same and where the materials, equipment specifications, and labor requirements vary enough that a schedule rate cannot accurately represent actual project cost.
Luongo said he is also seeing contractors ask distributors to match quotes given a month or two prior, operating on the assumption that prices have risen since then. In many cases they are right, and distributors are absorbing some of the increased cost for their better customers when they can. That dynamic — where distributors partially absorb manufacturer price increases to protect key contractor relationships — has a limit, and that limit is reached faster in a year like 2026 when price increase waves from manufacturers arrive across multiple months and product categories simultaneously.
Small Costs Add Up Quickly
Luongo specifically warned about the risk of overlooking small unit cost increases across the accessory and supply categories that each contractor truck carries. A 3% to 10% increase on insulation, tape, fittings, valves, and other truck stock items may not generate headlines the way a major equipment price announcement does, but those items multiplied across multiple trucks and technicians and hundreds of service calls becomes real money. Any contractor who is not paying attention to the latest prices will get hurt, Luongo said — the little things add up very quickly.
Transparency Over Surcharges
Ken Misiewicz, president and CEO of Pleune Service Company, said his company has made a philosophical decision not to utilize surcharges — for fuel, tariffs, or other cost drivers — due to the complexity of calculating the right amount, concerns about customer perception, and the risk of being seen as taking advantage of a crisis. Instead, Pleune incorporates cost changes into its base pricing structure through a disciplined annual budgeting process supplemented by real-time adjustments when inflationary pressure requires it. The conversations are never easy or fun, but our customers are well-informed professionals who understand what's happening in the world, Misiewicz said — and transparency about what is driving changes tends to preserve the customer relationship even when the news is a price increase.Pleune Service Company
Luongo offered complementary advice about where to raise prices: the smart contractor will simply raise the quoted price rather than adding fuel surcharges or credit card fees as line items. Consumers know things cost more, but most find add-on surcharges insulting — they feel like add-ons that used to be included in the price of doing business are now being extracted separately. Including cost increases in the quoted price rather than in surcharges also simplifies customer conversations, since there is one number to explain rather than a base price plus a series of additions that each require justification.
