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 indicates that upgrading your 10 SEER air conditioner to a mid-priced 16 SEER model could save you 38% on your electricity expenses each year!
Estimates vary from 10% to 50% savings on your air conditioning costs per year. However, the Department of Energy says you can save between 20% and 40% on your annual energy costs.
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.
It is probably worth spending the money on a system that's under 10 years old, but consider a replacement if the repair cost is high and you've had your equipment for over a decade.
On average, you can only expect about 15 years of reliable service from a central AC system. And that's only if you maintain your system well. So, if your home has an AC that's 20 years old or older, it's likely living on borrowed time. Here are all the reasons to replace your home's 20-year-old air conditioner.
It costs an average of $5,955 to install a new AC, but prices commonly range from $3,906 to $8,016, depending on the unit's size and type. A pro can provide an accurate quote based on your needs.
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.
This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032. Claim the credits using the IRS Form 5695 .
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.
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.
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.
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.
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.
According to researcher Danny Parker from the Florida Solar Energy Center, who performed a two-year energy study, shading the unit provides “minuscule results at best” with efficiency being increased less than half a percent. While you may wish to cover your condenser since let's face it – they aren't very stylish!
5 Star ACs are more energy-efficient than 3 Star ACs. The electricity consumption of a 5 Star AC (1.5 tons) is approximately 1.5 units per hour, whereas a 3 Star AC (1.5 tons) consumes 1.6 units every hour.
Federal Tax Credits
The Inflation Reduction Act (IRA) of 2022 makes tax credits available on high-efficiency HVAC units through 2032. It allows you to deduct 30 percent of the purchase and installation costs and caps the amount you can write off: Air conditioners, furnaces, boilers, and water heaters max out at $600.
Ducted AC Split Systems (or Mixed Ducted and Non-Ducted)
Individuals who purchase and place into service qualifying equipment between January 1, 2024, and December 31, 2024 may qualify for a non-refundable tax credit of up to $600 per system, subject to an annual limit of $1200 per taxpayer.
Capital improvements are permanent upgrades, adaptations, or enhancements that improve the property and increase your home's value. To qualify as a capital improvement, the IRS states that the property must meet the following conditions: The improvement “substantially adds” value to your home.
While replacing your central air unit or upgrading your air conditioning systems might seem like a substantial investment upfront, it can save you a significant amount of money in the long run.
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.
Air conditioners can cost anywhere between $0.32 and $1.87 to run per hour depending on the type and where you live. Investing in one or more fans for your home can be a great idea to keep your cooling costs down this summer. The upfront cost may be a bit higher but it'll pay itself in no time.
A standard homeowners insurance policy provides coverage for heating, ventilation and air conditioning (HVAC) systems if they're damaged by a fire, for example. But if your AC unit stops working due to an accident or normal wear and tear, your insurance company probably won't pay your claim.
Better pricing: Since there's less demand for HVAC system replacement in spring and fall, your HVAC contractor might even offer their own savings incentives.
If you've used your AC past 10 years, you should definitely consider replacing it. As air conditioning technology advances each day, getting a new system means it's more efficient and reliable than its previous version.