Are you looking to replace your old air conditioner? If so, one of the first things you’ll likely want to know is how much money you can possibly save by installing a new unit. Air conditioning technology has advanced quite rapidly in the past decade or two, which means that virtually any new unit you choose will be more efficient and lower your annual cooling costs from what they currently are. In this blog, we’re going to show you how you can easily estimate how much a new AC can save you to make it easier for you to decide whether it’s a good investment.

Average Annual Cooling Costs

The first thing you’ll need to do to determine approximately how much money you can save with a new air conditioner is to calculate how much your current annual cooling costs are. If you’re unsure of how much you’re currently spending per year on air conditioning, you can estimate it based on the size of your current AC unit and its Seasonal Energy Efficiency Ratio (SEER) rating. If your AC was installed before 2006, there’s a good chance it is only a 10 SEER unit as this was the minimum energy efficiency requirement up until the start of the year. If the unit was installed anytime between the start of 2006 and the end of 2014, its rating is at least 13 SEER. Any unit installed in 2015 or later will be at least 14 SEER.

In Southern California, air conditioners typically run for around 1,100 hours total each year. Based on the current estimated electricity rates in our area, a 10 SEER AC will usually cost somewhere between $375 and $1,300 per year depending on its size. If you have a 13 SEER unit, it likely costs you somewhere between $300 and $1,000 a year. If you have an average size home, your AC unit is most likely three tons. In this case, a 10 SEER unit would usually use around $750 worth of electricity per year while a 13 SEER unit would usually cost you around $580 per year.

Estimating Potential Energy Savings With a New AC Unit

If you know the SEER rating of your current AC unit and approximately how much it costs you per year to run, you can then use the SEER rating of any new unit you might be considering to estimate how much money it could save you. Every increasing SEER number equals approximately a 7% improvement in energy efficiency. This means that a 14 SEER unit would cost about 7% less to operate each year compared to a 13 SEER 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%. Let’s again say you have a three-ton, 10 SEER unit that normally costs you around $750 a year to run. In this case, a new three-ton, 15 SEER unit would save you around $260 a year. If you instead have a 13 SEER unit and normally spend around $580 a year, a 15 SEER unit would save you around $80 a year.

If your current AC is at least 14 SEER and less than 10 years old, the savings you’d get with a 15 SEER unit would be fairly minimal. In this case, it probably doesn’t make all that much sense to replace the unit yet if it’s still working effectively. The only time when it would make sense is if you’re looking to upgrade to a much more energy-efficient unit with a higher SEER rating. For instance, a 20 SEER unit could easily lower your annual cooling costs by around 42%, potentially saving you somewhere around $150 to $200 a year. If you instead opted for a 28 SEER unit, which is the most efficient AC currently available, your annual cooling costs would be cut in half.

Estimating Lifetime Energy Savings

Calculating yearly energy savings can definitely help you determine whether replacing your AC is worth it. However, an even more effective way to know whether a new AC is worth it is to estimate how much you could potentially save over the unit’s total lifespan. Most new air conditioners will last for around 15 years on average. If a new unit would lower your cooling costs by around $200 a year, you could end up saving around $3,000 in total over the life of the new unit. This means that the new unit probably won’t ever fully pay for itself, but it would still save you a good chunk of change in the long run.

Two-Stage and Variable-Speed Air Conditioners

All of these previous estimates are based on a standard single-stage air conditioner. Single-stage means that the unit has only one speed or power setting. Whenever the unit is on, it always runs at 100% power. Two-stage ACs can run both at full power and on a lower power setting. On the lower setting, two-stage units run at only around 60-70% of their normal capacity, which means they use 30-40% less electricity than when running on full power.

A two-stage AC will always start up on the lower power setting, and most units will typically run on the lower setting around 80% of the time. The unit will usually switch to run on full power only when the temperature in your house is much warmer than what you have your thermostat set to. It may also sometimes run on full power during extremely hot weather to ensure it can cool quickly enough to keep your home from getting too hot.

Compared to a single-stage AC, a two-stage unit will use quite a bit less energy so you can save even more. Part of the reason for this is obviously the fact that the unit uses less energy when running on the lower power setting. The other reason is that two-stage ACs will always have longer cooling cycles, which means they won’t turn on and off as much as a single-stage unit. The reason that longer cooling cycles save money is that air conditioners use around three to five times more energy to turn on than they do when they’re running and actively cooling. This means that a two-stage AC that runs once an hour for 30 minutes will always use much less energy than a single-stage unit that runs three times an hour for 10 minutes each time.

Running on the lower power setting puts much less wear and tear on the unit. As such, two-stage ACs will usually have a longer lifespan than single-stage units. The reduced wear and tear also means that a two-stage unit typically won’t break down as much or need as many repairs. Both these factors are also important things to consider when choosing between a single-stage and two-stage unit.

Variable-speed ACs are even more energy efficient as they typically have several hundred different power settings instead of just one or two. The only issue is that variable-speed units are quite expensive and will typically cost at least a few thousand dollars more than any other type of unit. Not only is the variable-speed unit itself more expensive, but you will also need to pay quite a bit more to have a new variable-speed blower installed in your house. Due to the high cost, you’re usually better off opting for the two-stage unit as it will generally always be the most cost-effective option in the long run and provide a better return on your investment.

Trust The Experts!

Oak Island Heating and Air Conditioning specializes in AC installation, and we carry an extensive selection of energy-efficient units for you to choose from. If you’re unsure of which SEER rating is best for your home, our team can also help you estimate energy savings so you can find the best unit that fits your budget. For more information on our AC installation services, or if you are looking for AC maintenance in the San Marcos area, contact us today.

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