How to start an HVAC business in 2026

Do you need an HVAC contractor license? Usually yes — the company needs one on top of the technician's EPA card. Your EPA Section 608 card lets you handle refrigerant; the company needs the contractor license your state issues on top of it. Of the states we read, two run the other way: New York issues no state HVAC license (its cities and counties do), and Pennsylvania "currently has no licensure or certification requirements for most construction contractors," leaving it to those of its 2,562 municipalities that set their own (Pennsylvania Department of Labor and Industry) — though a Pennsylvania contractor doing home improvement registers with the Attorney General for a $50 fee unless its home improvements totalled under $5,000 in the previous tax year (Pennsylvania Act 132 of 2008). A bond isn't universal either: Texas requires liability cover and no bond, California a $25,000 bond. The states we read:

• Texas. "A person may not engage in air conditioning and refrigeration contracting unless the person holds an air conditioning and refrigeration contractor license," and a license "may assign that license to only one permanent office of one air conditioning and refrigeration contracting company" (Texas Occupations Code §1302.251). Two classes: "The Class A license allows you to work on any size unit. The Class B license allows you to work on cooling systems of 25 tons and under, and heating systems of 1.5 million BTUs/hour and under" — the whole residential market — with one endorsement per license, environmental air conditioning or commercial refrigeration (TDLR; §1302.254). You need "at least 48 months of practical experience in air-conditioning and refrigeration-related work under the supervision of a licensed air conditioning and refrigeration contractor in the past 72 months," or a technician certification for 12 months plus 36 months of experience; the application fee is $115 and "Licenses are valid for a period of 1 year from the date of issue"; the PSI exam is $60 for Class B and $74 for Class A (TDLR; PSI bulletin). "You must maintain commercial general liability insurance at all times while your license is active" — $100,000 per occurrence, $200,000 aggregate and $100,000 products-completed operations for Class B, three times that for Class A — and no bond (TDLR). Since September 1, 2021, no Texas city may charge a TDLR-licensed contractor a registration fee, though cities still collect building permit fees — and a mini-split is a split system that needs the license (TDLR FAQ).
• Florida. "A person must be certified or registered in order to engage in the business of contracting in this state" — certified statewide, registered locally — and any other contractor "shall subcontract all … air-conditioning work" to one (Florida Statutes §489.113). A Class A air-conditioning contractor's services are unlimited; a Class B's "are limited to 25 tons of cooling and 500,000 Btu of heating in any one system" (§489.105). You must be 18 with "at least 4 years of active experience," one of them as a foreman (§489.111); the statute caps the certificate application at $150 ($350 with the exam) and the certification and renewal fees at $250, with $50 to qualify a business organization (§489.109); the license requires $100,000 of public liability and $25,000 of property damage insurance (Rule 61G4-15.003).
• California. The C-20 Warm-Air Heating, Ventilating and Air-Conditioning Contractor license (CSLB) is needed on any job where the price of labor, materials and everything else is $1,000 or more, or that needs a permit (Business and Professions Code §7048); it takes "not less than four years experience as a journeyman, foreman, supervising employee or contractor" (16 CCR §825), a $450 application and a $200 initial license fee for a sole owner or $350 for an LLC or corporation (CSLB fee list; §7137), and a contractor's bond "in the sum of twenty-five thousand dollars ($25,000)" (§7071.6).
• New York. The state issues no HVAC contractor license; the city or county you work in does. In the five boroughs, "A person or business must have a Home Improvement Contractor license to do construction, repair, remodeling, or other home improvement work to any residential land or building in New York City" — $200 for up to two years, plus a $20,000 surety bond or $200 to join the Home Improvement Business Trust Fund (NYC Department of Consumer and Worker Protection, September 2026). The Department of Buildings licenses oil-burner installers separately — a $100 license after a $585 written and $530 practical exam (NYC DOB). Nassau, Suffolk and Westchester license home-improvement contractors at the county level — check the county's consumer-affairs office.
• Pennsylvania. No state HVAC license (Pennsylvania DLI). The state layer is the home improvement contractor registration — the application "shall be accompanied by a fee of $50," and a contractor whose home improvements totalled "less than $5,000 during the previous taxable year" is excluded (Act 132 of 2008) — and the trade license, where there is one, is your municipality's.

Whichever state you're in, check your state board, your county and your city before the first paid call — a city can license on top of the state.

Can someone who isn't licensed own the company? In Texas, the work must be "provided through a Texas licensed Air Conditioning and Refrigeration Contractor who holds the required amount of liability insurance," and that contractor's license lives at one company only (TDLR FAQ; §1302.251). In California the company's license can rest on a responsible managing employee — the statute prices replacing one at $230 (§7137). In Florida "a subcontractor who is not certified or registered may perform construction work under the supervision of a person who is certified or registered," and the board charges $50 to qualify a business organization (§489.113; §489.109). So yes — with the license-holder on the license and the insurance. Read your state's rule before you pick a partner.

The federal layer: the card, the gas and the 2025 refrigerants. "Technicians who maintain, service, repair, or dispose of equipment that could release ozone depleting refrigerants into the atmosphere must be certified" under Section 608 (EPA) — Type I for small appliances, Type II for high-pressure systems, Type III for low-pressure, Universal for all three (40 CFR §82.161). "Only EPA-certified technicians are allowed to purchase ozone-depleting substances (ODS) or non-ozone depleting substitutes used as refrigerants," so the company buys gas through its certified people (EPA); nobody "may knowingly vent or otherwise release into the environment any refrigerant," and the seller's invoices with your name are kept "for three years after each purchase" (40 CFR §82.154). And since January 1, 2025, "Prohibitions apply to the manufacture, distribution, sale, installation, import, and export of products containing restricted HFCs" — new residential systems use lower-global-warming refrigerants, so a company starting now buys recovery and leak-detection gear rated for them and stocks the new gases, not the old (EPA, technology transitions).

The tools, the van and the stock. Dealer list prices the career guide verified this month (Zoro's pages open in a browser): a Fieldpiece MR45 recovery machine $1,313.99 (Zoro), a VP67 vacuum pump $607.99 (Zoro), an SM382V digital manifold $698.99 (Zoro), a DR58 leak detector $449.99 (Zoro), a refrigerant scale $250.99 (Zoro) and a micron gauge $241.99 (Zoro) — with the meters, cutter, core tool and flaring kit, the whole service kit sums to $4,240 (our arithmetic; rounded). A Weather Guard four-shelf van unit is $584 (Elite Truck); a new Mercedes-Benz Sprinter cargo van starts at $48,990 (Mercedes-Benz Vans, 2026); no dealer page prices a used van, so the plan carries it as a planning range. Housecall Pro's start guide puts "Insurance coverage: $2,000–$6,000 annually for liability, workers' comp, and auto policies" (Housecall Pro, March 2026) — a software company's figure. One owner on that page, Danny Reddick of Reddick & Sons: “The essential tools to invest in first are a reliable van, a complete set of hand tools, a good manifold gauge set, a vacuum pump, a leak detector, and a recovery machine. Don't buy the most expensive tools out of the gate unless you're sure you'll use them constantly.” Opening parts and refrigerant stock is a planning range — no distributor prints its terms; open a trade account at a Johnstone, Ferguson, Carrier Enterprise or Lennox branch and ask. Our free HVAC estimate template and invoice template are the paperwork for before and after.

How to price: a diagnostic fee, then a flat price the customer approves. The call-out is $70–$200 and the hourly rate $75–$150 — $140–$250 after hours — in Housecall Pro's figures; the same page reports the Air Conditioning Contractors of America's view that "the average HVAC contractor nets about 6% (5% for residential)" against a 10% target, and that contractors "who use flat-rate pricing on service calls average 7% net, compared with 4% for other pricing methods" (Housecall Pro, October 2026); a Fixr analyst quoted in its start guide says "A healthy HVAC business usually sees a 15%–25% net margin" (Housecall Pro, March 2026). Build a price book for your twenty most common repairs, quote change-outs in writing with financing, sell a two-visit maintenance plan — $150–$300 a year in the pricing guide, $150–$500 in Fixr's — and check each flat price against the hours it really takes. The homeowner will arrive with "the $5,000 rule": "The age of your HVAC system x the estimated repair cost … If the result of that formula is more than $5,000, a replacement is often considered the better long-term option" — a rule of thumb, and CBS adds that it "isn't meant to be the final word" (CBS News, June 2026); show the arithmetic on the quote. Our HVAC pricing guide goes deeper, and HVAC marketing covers the phone ringing.

Permits and sales tax. In the US, change-outs need a mechanical permit almost everywhere — in Texas the cities "may collect building permit fees" even though they can't charge the contractor a registration fee (TDLR FAQ). Sales tax is state law: in Texas, "Labor to repair, remodel, or restore residential real property is not taxable," while "the total amount charged for remodeling, repairing, or restoring nonresidential real property is taxable," and "Charges for maintenance of real property are not taxable" — so a capacitor at a house is untaxed labor, the same call at a restaurant is taxed in full, and you pay tax on the filters you buy for a maintenance plan (Texas Comptroller, publication 94-116); in New York, installing a new system is a capital improvement while "replacing a thermostat on a hot water heater" is a taxable repair (New York Department of Taxation, TB-ST-104); in Florida, a lump-sum contractor "is the final consumer of materials and supplies" and pays tax to the supplier (Florida Department of Revenue, GT-800067); in California, "Special rules apply to labor when you perform work on houses, buildings, and other real property" (CDTFA, publication 108) — its contractors' publication makes you the consumer of the materials you install and the retailer of the fixtures (CDTFA, publication 9, February 2025). Ask an accountant before you print a price book.

How to register the business. In the US it's the same four steps in each state we read, with different fees. Form the business — an LLC is $40 in Kentucky (Kentucky SOS), $300 in Texas (Texas Secretary of State, Form 205), $200 in New York plus six weeks of newspaper publication (N.Y. LLC Law §1101; §206) and $70 in California (Government Code §12190), where every LLC also owes an $800 yearly tax (California FTB) — or file a DBA if you'll trade as a sole proprietor under a business name. Get the free EIN (IRS), open a business bank account, and get the city registration where your city wants one. Our guide to whether you need an LLC walks through the choice.

Insurance and workers' comp. General liability is what the license, the permit office and the property manager ask for. Insureon's medians for HVAC installation businesses are $101 a month ($1,213 a year) for general liability, $286 a month ($3,438 a year) for commercial auto, $182 a month ($2,189 a year) for workers' compensation, $41 a month for tools and equipment, $139 a month for a business owner's policy and $9 a month ($112 a year) for a surety bond; most of its customers have "less than five employees, annual revenue ranging from around $50,000 to more than $200,000, and five years or less in business" (Insureon, August 2026). Workers' comp: in Texas "private employers can choose to carry workers' compensation insurance coverage, but it is not required in most cases" (Texas Department of Insurance); in Florida, construction employers "with one or more employees, including the owner of the business who are corporate officers or Limited Liability Company (LLC) members, must have workers' compensation coverage" — the four-employee rule is for non-construction trades (Florida Division of Workers' Compensation); in New York "Virtually all employers" must, but "coverage is not required for a sole proprietor who does not have employees" (NY Workers' Compensation Board); in California, "If a business employs one or more employees, then it must satisfy the requirement" (California DIR) — and the C-20 HVAC license itself has needed a workers' comp policy since 1 January 2023, "regardless of whether the contractor has employees" (CSLB Industry Bulletin #22-13, November 2022).

Outside the US. In the UK the F-gas qualification is personal — "You must have your own qualifications to work on equipment containing F gas, even if you work for someone else," in four categories from full install-and-maintain down to leak checking (gov.uk) — and the company itself registers with a certification body such as REFCOM (REFCOM); "Anyone employed to work on gas appliances in domestic premises must be a Gas Safe registered engineer" (HSE); a company costs £100 to form (gov.uk) and VAT registration starts at £90,000 of turnover (gov.uk). Australia inverts the US rule on buying gas: the person holds a refrigerant handling license and the business holds its own refrigerant trading authorization — any person or business that acquires, stores or disposes of refrigerant must hold one, whether a sole trader or a company with a hundred technicians (Australian Refrigeration Council); the states license the contractor on top — New South Wales through Fair Trading (NSW Fair Trading), Queensland through the QBCC; an ABN is free (business.gov.au) and GST registration starts at A$75,000 of turnover (the Australian Taxation Office). Wherever you are, confirm the rules with your regulator and an accountant before the first paid call.

Franchise or independent? A franchise directory's reading of two 2026 disclosure documents: One Hour Heating & Air Conditioning — a $43,000 franchise fee, a 6% royalty, an initial investment of $143,273 to $286,702 and average gross revenue of $605,630 per unit (Franzy, 2026); Aire Serv — a $45,000 to $90,000 fee, a 5% to 7% royalty, $113,800 to $271,708 to open and $1,600,000 average gross revenue (Franzy, 2026). Those are sales, not pay, and the directory says it makes "no claims of accuracy" — read the disclosure document before you sign anything. Every owner quoted in the next section built an independent company.

The business, and the calendar. Answer every call, pull every permit, log every pound of refrigerant, and sell the plan at every job. For one certified technician going out alone, our free HVAC business plan puts the start at $10,652–$32,943: the contractor license and exam, the service kit — the recovery machine, vacuum pump, gauges, scale and meters — van shelving, a year of general liability with commercial auto at the high end, registration, a city license where one applies, opening stock as a planning range, the website, software, and two months of running costs. The van itself and your own living costs come on top. The HVAC website templates show what a good contractor's site looks like, Zarla's HVAC website builder is how a homeowner searching for AC repair near them finds yours, and the best website builders for HVAC companies scores the alternatives.