Wouldn't comment without seeing all model numbers for the various options.

TD

TD, they didn't give me the model numbers for any of the options. I will see if I can get them and let you know.

" is a traditional central air system and our heat is run off of our hot water heater and distributed through the central air ductwork."

You are heating your hot water heater? How big is this hot water heater? What is the temperature of the water? Are you using natural gas?

Yes, our hot water heater supplies the heat for our home. I think it is a 50-gallon heater and it uses natural gas. I had never seen such a system before moving into our house 2 years ago. I turn the water temp as high as it will go (not sure what the actual temp is) during the winter months and then turn it back down during the summer. There is a pipe running hot water to the air handler where it warms the air and is then recirculated back into the water heater. The air coming out of the vents isn't as hot as it would be from a gas furnace and it struggled on a couple of the coldest days but overall it hasn't done too bad of a job heating our home the last two winters.

Evaluation of your duct system and R&R if necessary should be part of the plan. Huge duct leaks might be part of the reason your system can't keep up if the ducts are outside of the house.

Ionized, I wondered the same thing because the ductwork is in the attic and it gets warm up there...but the guy I got the first quote from thought everything looked good on that end. I will see if I can get a second opinion tomorrow.

Duct leakage is a huge problem when ducts are outside of the living space. They turn the HVAC blower into a power vent blowing air out of the house and sucking it in in random places when leaks are on the supply side depressurizing the house. When leaks are on the return side, the house can be pressurized blowing air out in random places.

Even new duct systems leak. Poorly balanced duct systems pressurize and depressurize individual rooms. Central returns tend to do that by their nature unless careful attention is paid to undercutting doors or other sufficient room-to-room venting. Old duct systems leak a lot. Maybe energy_rater_la will chime in and report typical results. I think that 20% is not unusual. Not enough attention is paid to the problem.

Check other links too. Buildingscience.com is a good place. Search on key words like, duct, envelope, and pressure.

You might consider consulting with a local energy rater. It can be a good investment. There may be local programs to help with the cost, government or utility programs. Check resent.us. They can help identify the low-hanging fruit for energy savings and help you make your house more comfortable at the same time.

Here is a link that might be useful: Energy Star

Ionized, I did a little research based on your comments and it looks like there are a few good options. We get our power through Tennessee Valley Authority and it seems that they offer rebates for energy improvement projects, including ductwork and a new heat pump. They will also send someone to give an energy evaluation and if we make any of their recommended improvements, the cost of the evaluation will be reimbursed. I will be giving them a call today and see if I can schedule a consultation. I greatly appreciate your helpful insight.

Natural gas prices are likely to go up substantially in the future, more than electricity, so factor that into the cost comparison. Although you say you don't use much heating anyways so it may not add up too much.

I have a couple of updates. First, still no specific model numbers from the first quote. All he could tell me was that it was from the R-Series, which based on that I am guessing that all of the compressors are XR-13's. But, I could be wrong. Also just got a second quote from a different company for a Rheem 3-ton, 14 SEER A/C with 80% efficiency furnace for $4,500-$4,800 ballpark and a dual fuel 14-SEER Rheem for roughly $800 more. He didn't have a written quote right there, but would get me one as soon as he could with more details on the model numbers, etc. He also looked over the duct work and insulation in the attic and thought both were more than sufficient. He said the ducts were insulated with R-6 insulation and he couldn't find any leaks anywhere. We've had him out before to work on our A/C and he has been great to work with and is very professional. At this point we are leaning toward going with him, particularly since Lowe's can't even get us the specific model numbers from their quotes. Any thoughts?

Nothing from me except wait for the energy rater before you make any decisions. There is nothing like eyes on your house from an unbiased source that is familiar with your local conditions. Will the energy rater base recommendations on visual observations only, or will they be doing blower door tests? Do you have a link to the program?

Ionized, I'm not sure exactly what they will base their recommendations on. Here is a link to the program:

http://energyright.com/residential/inhome_energy_eval.html