When you switch to a new AC system, your energy bills will drop significantly. Studies show that AC units of 10 or less cost an annual average of $890. On the other hand, models with a SEER rating of 16 were closer to $499. That's a significant change, especially when compounded across a 15-year lifespan.
The Lennox Energy Calculator shows that improving your 10 SEER system to a mid-range 16 SEER model could save you 38% on your electrical bills annually!
Assuming the same energy cost and usage statistics, your new system will consume around $648 in electricity per year. That's an average savings of about $260 per year, or around 29%. The savings really add up when you expand those numbers out over time as well.
The first thing any upgrade will do is lower your energy usage. A 20-year-old air conditioning system might use 6 kWh of electricity to cool an average-sized house. A modern AC system could cool that same house using as little as 1.71 kWh of electricity.
However, industry standards and recommendations suggest considering replacement when your air conditioner reaches the 15 to 20-year mark. At this stage, the cost of repairs and declining efficiency may make investing in a new, energy-efficient unit more cost-effective.
Not only do old AC units use more electricity, but a fairly new system can experience this issue, too. A lack of maintenance usually contributes to the increase in your energy costs and can even cause extreme mechanical problems. Don't ignore basic maintenance just because you have a new air conditioner.
Average New AC Unit Costs
The average cost of installing a new central air conditioner in 2024, including equipment and labor costs, is $5,750 for a 3-ton unit in a 2,000-square-foot home. On average, a new AC unit cost will fall between $3,300 and $7,800.
Running the AC unit full-time in our big house example would cost $7.39 per day for the efficient unit, or about $222 per month. For the less efficient unit, you're looking at $10.56 per day or about $317 per month. Not only that, but running all day is hard on your air conditioner.
It's important to be aware of how long air conditioners last, so you don't get the unwelcome surprise of a broken air conditioner in the peak of the summer heat. In general, air conditioners that are properly maintained can last 15 to 20 years.
Newer systems can regulate the temperature in your home more precisely than older models. A new air conditioner will use less energy to lower the temperature and when paired with effective insulation, will keep your home cooler for longer.
Does homeowners insurance cover air conditioner replacement? If your air conditioner is damaged or destroyed due to a covered peril, such as lightning or a windstorm, your homeowners insurance policy may pay to repair or replace the unit, up to your coverage limit and minus your homeowners insurance deductible.
Usually, it is a quick fix, but sometimes the failure can be caused by a much bigger problem. The most expensive part of an AC unit to replace and repair is the air compressor.
Your air conditioning system is one of the biggest culprits behind skyrocketing electric bills. When your air filter is dirty, refrigerant levels are low, your thermostat is faulty or you lack proper maintenance, your A/C system can end up using a lot more energy than it should.
Estimating Potential Energy Savings With a New AC Unit
The current minimum energy efficiency requirement in California for all new air conditioners is 15 SEER. This means replacing a 10 SEER AC with a new 15 SEER unit would lower your annual air conditioning costs by approximately 35%.
Set the thermostat as high as comfortably possible during hot weather. The less difference between the indoor and outdoor temperatures, the lower your cooling bill will be. Keep your house warmer when you aren't home during the day, but cooler when you come home at night.
The best times to replace your HVAC system are the spring and early fall when the business is the slowest. During this time manufacturers offer specials to help sell more products and HVAC contractors are more aggressive with their pricing to help keep the dollars rolling and the crews busy.
How much does air-conditioning cost to use? On average, an air conditioner costs between $0.06 and $0.88 per hour to use. Let's see how much air-conditioning costs every month (assuming it runs for 8 hours per day). The cheapest option is $14.40 per month and $211.20 per month on the high end.
Heating and cooling: 45-50%
The largest electricity consumer in the average household is your heating and cooling appliance. By a long shot. Central air conditioners and heaters use tons of energy in order to keep your home set to the right temperature.
Homeowners insurance covers HVAC systems when the damage is a result of a covered disaster or peril, including high winds, fallen trees, theft, hail or even a fire. So if lightning strikes your unit and damages its electrical components, your homeowners insurance policy would probably cover it.