The True Cost of Running an Air Conditioner

Hot summer days are serious business. When it hits 90 degrees outside, you want that air conditioner blowing cool air on you ASAP. The second you turn on your AC though; you start accruing charges against next month’s electric bill.

Most people don’t think about their electric bill until the bill arrives. A better strategy is to know the costs involved before you have to pay the bill.

Operating an air conditioner isn’t cheap. There are initial setup costs and monthly electricity charges. Throw maintenance and repairs into the mix and that grand total will probably make you gulp.

Here’s everything you need to know about the true cost of running an air conditioner, so you’re never surprised by your electric bill again.

As stated above, electricity is your largest recurring expense. Right now, the national average cost of electricity in the US ranges from $0.13-$0.17 per kilowatt-hour (kWh). Your exact rate will depend on where you live.

1. Central AC units average about 3,500 watts per hour. At 0.16 cents per kWh, running your AC for eight hours a day costs you $4.48 per day. Multiply that by 30 days in the month and you’re looking at about $134 per month. If you leave it running 24 hours a day you can easily exceed $300 per month.

2. Window units are much cheaper to run. At 5,000 BTU, a small window AC unit costs $.06 per hour to run. Larger units closer to 15,000 BTU can cost as much as $.19 per hour. A medium window unit run eight hours a day will set you back about $20 – $33 each month.

Portable air conditioners fall somewhere between window units and central air. Since they’re less efficient than window units, expect to pay slightly more for the same amount of cooling.

Your AC unit has to cool down your home before you start racking up electricity charges. Depending on which unit you choose, you may have to pay for installation as well.

Window units start at about $150 to $500 for the unit itself. Most people can install these themselves and keep initial costs low.

Central air conditioners require full installation. These systems range from $3,000 to $7,000+, depending on the size of your home and specific unit type. Larger homes or complex installations can run much higher. Central air conditioners usually require you to install or replace ductwork which can tack on several thousand dollars.

Mini-split systems offer a nice middle ground between window units and central air conditioners. Mini-split ACs offer ductless operation, cooling certain zones or rooms. NHS told us that these systems start at about $700 to $2,000 for a single-zone mini-split not including installation. Larger systems that cool multiple rooms or zones can cost $5,000+, depending on the number of rooms you wish to cool.

This is one area homeowners often overlook. Neglecting air conditioner maintenance is one of the quickest ways to increase your operating costs.

HVAC technicians recommend having your unit serviced once per year. Service appointments cost between $100 to $150 dollars for a standard tune-up. During a routine tune-up, technicians clean out the coils, check refrigerant levels, inspect wiring, and ensure everything is functioning properly.

If you skip annual maintenance, problems only get worse. A dirty filter forces your system to work harder, which costs you more money on your electric bill and wears down the equipment. Replacing a dirty air filter is cheap ($5-$10) and takes about five minutes. Change your filter every 1-3 months. 

Refrigerant leaks are very common AC repairs. Repairing a refrigerant leak can cost anywhere from $200-$1,500+. You can expect to pay $1,000-$2,500+ to replace the compressor. This is the part of your AC that does the actual cooling.

Over a well-maintained air conditioner's 10-15 year lifespan, you can expect to pay anywhere from $500 to $2000+ in repairs on a central air conditioning system. Throw that on top of your monthly electric bill and you could be paying thousands over the lifetime of your unit.

Not all air conditioners are created equal. Depending on the efficiency ratings of your system you may pay much more or less each month.

Central AC units are rated by SEER (Seasonal Energy Efficiency Ratio). Older air conditioners were usually around 8-10 SEER. Any new air conditioner you buy today will be 14 SEER or higher (by law in most states). Some high-efficiency models boast 25+ SEER ratings. 

A unit that has a SEER rating of 20 uses half the electricity compared to a unit that only has a 10 SEER rating. If your electric bill was $200/month with an older unit, you could pay as little as $100/month with a newer efficient unit. Savings add up over the course of cooling seasons that last half a year in Texas, Florida or Arizona.

Window units are rated by EER (Energy Efficiency Ratio). Just as SEER ratings are important with central air conditioners, larger EER ratings mean lower operating costs with window units. Always look for this number when purchasing a new window unit. You could end up spending $50 less on a window AC unit that ends up costing you $100 more per year to operate.

Thankfully, you don’t have to just lie down and accept a high electricity bill. Small changes in your daily routine can make a big impact.

Raise your thermostat when you leave the house. Did you know that for every degree you raise your thermostat, you can save about 3% on cooling costs? Keep it at 78 degrees when you’re home and comfy. If no one is home, or everyone is asleep, bump the thermostat up to 85 degrees. Smart thermostats can do this automatically for you and save you $50-$100 per year.

Take advantage of fans. Believe it or not, having a ceiling fan on can make a room feel up to 4 degrees cooler. Raise the thermostat and rely on fans when you can. Ceiling fans typically only cost $.01 per hour to run.

Weatherstrip and seal your home. When air leaks out around doors and windows, your AC has to work harder to cool your home. Grab some weatherstripping and caulk to seal any obvious leaks. A leaky home can waste 20-30% of your AC’s output.

Close blinds during the day. Incoming sunlight can heat up an entire room within minutes. Keeping blinds or curtains drawn on windows facing the south can decrease indoor temperatures without adjusting the thermostat.

Running any type of air conditioner is a long-term investment. Your window AC unit may cost you anywhere from $300-$500 to run for the entire summer. Central AC systems can cost you $1,500 – $3,000+ per year when you consider electricity, maintenance and repairs.

Understanding your individual costs is the first step. Know your electricity rate. Know the efficiency rating of your unit. Don’t neglect yearly maintenance. Cut costs wherever you can. Reduce waste and your air conditioner won’t seem like such a drain on your wallet.

The Problem 

This family of four was frustrated that their electric bills continued to climb every summer. They hadn’t added any new appliances to their home, so why were their cooling costs so high? Their air conditioner was 12 years old and ran for hours each day, even though their house only seemed comfortable about half the time. Cooling costs often exceeded $250/month when the AC was running full blast.

Diagnosis 

A HVAC technician visited their home and discovered a number of problems:

• Air filter was dirty and restricting airflow 

• Condenser coils were dirty and decreased efficiency 

• House had multiple air leaks around doors and windows

• Old thermostat was always kept at 72° (even when no one was home)

• Old AC unit had a low SEER rating

Instead of replacing their air conditioner right away, they took steps to improve their home’s efficiency.

The Solution 

Simple fixes included: 

• Changing the air filter every few months 

• Scheduling annual AC service 

• Installing a smart thermostat with auto scheduling 

• Setting thermostat higher when no one was home

• Sealing air leaks with caulk and weather stripping

• Using ceiling fans to feel comfortable at higher temperatures

• Closing blinds when sunshine entered the house 

The Payoff 

Just one cooling season, they noticed: 

• Lower monthly utility bills 

• AC didn’t run as long 

• Temperatures were more consistent 

• Less stress on their air conditioner 

• Peace of mind knowing that costly repairs could wait a little longer

Homeowners were also able to squeeze a few more seasons out of their old AC while keeping their home more comfortable than ever.

How much does central air conditioning cost to run?

Annual cooling costs vary widely based on where you live, the size of your air conditioner, how much you run it, and your utility rates. As expected, residents of hot, humid climates tend to spend more than those in temperate climates.

Is the central air conditioner expensive to run? 

Typically yes. Cooling an entire house requires far more energy than cooling a single room with a window air conditioner. However, running multiple window units can minimize this difference.

Are window air conditioners cheaper than central air?

Yes. Window air conditioners use significantly less electricity than central air conditioners since they’re typically small and only cool one room at a time.

Does a high SEER air conditioner save money?

Yes, over time. Air conditioners with higher SEER ratings use less energy than units with lower ratings. Although these units are more expensive initially, energy savings help offset their higher cost.

Does my air conditioner really need yearly maintenance?

HVAC professionals agree that preventative maintenance is the best way to prolong the life of your equipment. Scheduling annual air conditioner service ensures that small problems are corrected before they lead to bigger, more expensive issues.

How often should you change your air filter?

Every 1-3 months, depending on your filter. Pet owners, allergy sufferers, and homes with excess dust might need to change theirs more frequently.

Will a smart thermostat help me save money on cooling costs?

Yes! Smart thermostats use advanced programming to adapt to your schedule and monitor occupancy. Your cooling bills will be much lower because your system won’t be cooling an empty house all day long.

What temperature should I set my thermostat at in summer?

Many energy experts advise setting your thermostat to around 78° while you’re home. You can also save money by setting it several degrees higher when you’re away.

Why do my electricity bills keep getting higher?

Older air conditioners lose efficiency over time. Dirty filters, air leaks, and refrigerant problems can also cause your cooling system to work harder than necessary.

Is it worth it to get your AC serviced every year?

Annual maintenance visits from a qualified HVAC technician can improve your comfort, maximize efficiency, and save you money in the long run.

How can I reduce my cooling costs? 

Typically, homeowners see the biggest savings by incorporating multiple money-saving techniques.

Many of these cost little to nothing and can be performed by the average homeowner. However, upgrading to a new high-efficiency air conditioner might be required if your system is getting up there in age.