Paying Less Now For Your New AC Can Cost You Much More Later

May 12, 2022

The average residential heating and cooling system lasts around 15 years. That means the decision you make now about what to install in your home will affect your comfort — and your wallet — for the next decade and a half.

When you’re considering the cost of your new air conditioner, it’s important to remember that different models use different amounts of electricity.

We call this energy efficiency: A system that uses less electricity to do the same job as a system that uses more electricity is more energy efficient.

And, that difference in efficiency can save — or cost — you thousands of dollars over the life of your system. So, it’s important to balance that upfront price with the savings potential you may see in the years to come.

An AC’s energy efficiency doesn’t affect performance or how many years it will last. As long as it was correctly installed (more on that later), you’ll get the cooling you want for a decade or more.

In most cases, paying a little less to install a low-efficiency AC can cost you much more money in the long run.

To explain this, we’ll give you the simple equation and then get into more detail. Then, we’ll get into what to consider when deciding what’s best for your home. And how to make sure you’re getting the most out of your investment.

We’ve pulled from a wealth of sources to put this article together. It combines peer-reviewed, third-party research and industry resources with our team’s on-the-ground knowledge and Broadley’s experience from over a century of installing heating and cooling systems in South Jersey.

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Here’s everything you need to know.

Pay More Now, Pay Less Later (And Vice Versa)

A low-efficiency air conditioner costs less to install than a high-efficiency unit. It does the job but requires more electricity to do it. By contrast, a high-efficiency model costs more upfront because it’s a better machine. As a result, it uses less electricity over time.

That means your choices are: Pay less upfront but spend more over time. Or pay more upfront but see better savings over the life of the system.

It’s a return on investment proposition. If you’re considering spending an extra $1,500 to install a better system, you want to make sure you’ll save that much money over the next five years in lower energy bills.

After that, the additional savings on your bill is more money in your pocket every month your AC is running.

Calculating Your AC’s Energy Efficiency (And Cost Savings)

Air conditioner efficiency is measured by SEER (Seasonal Energy Efficiency Ratio). The higher the SEER, the less electricity it uses — and the less electricity you pay for.

The lowest SEER rating allowed by law in 2022 is 13. Most systems are 13 or 16 SEER. Then, you get into high-end systems going up to 25 SEER.

An air conditioner uses about seven percent less electricity for every SEER point. So, a 13 SEER AC uses 21 percent more energy than a 16 SEER model.

But, the higher the SEER, the more expensive the unit. For instance: A basic 13 SEER AC system costs about $7,160 to install in South Jersey. A 16-SEER model is around $8,445.

In that case, the question is: Will the 16-SEER model save you $1,285 in energy costs over the next five years?

That depends on how often you run your system and what your bill looks like during the summers right now. In many cases, the numbers add up to better savings over time with the 16-SEER model.

Just remember: It’s not slashing your entire bill by 21 percent. Just the amount of power your AC uses a few months out of the year.

Ultimately, if it looks like you’ll make those savings in five years, then the higher-efficiency model is a good choice. You’ll make back that extra investment and then save money over the next decade or so.

If not, the 13-SEER AC may be your better choice.

When (And When Not) To Go With A High-Efficiency Air Conditioner

A High Efficiency System Could Cost Less In The Long Run
When choosing your new air conditioner’s efficiency, the biggest question is: How long do you plan to stay in your current house?

Remember: We’re thinking about a five-year ROI.

If you just moved in and plan to stay, or don’t imagine leaving until they take you out in a pine box, then a high-efficiency system is a good choice. You’ll make up the extra cost quickly and then enjoy extra savings for years to come.

But, if you plan to move within the next five years, a high-efficiency system doesn’t make financial sense. You’ll leave before making that money back.

Now, you may have other reasons for wanting to go with high efficiency. For instance, you may be concerned about environmental impact or how much your home relies on the grid. There’s also the fact that some high-efficiency systems also have features such as variable-speed motors that make your home more comfortable.

However, in pure dollars-and-cents terms, the number of years you plan to stay in your home is the most significant consideration.

And, if you’re replacing an old system, you may get an even better upgrade than you expect.

Your Old AC May Not Be As Efficient As You Think

Now that you know about SEER, you can check the efficiency of your old system. Is it 13 or higher? If so, you may think you’re getting today’s industry standard for power usage.

But, that may not be the case.

Older units don’t always perform up to factory standards. That’s especially true if you or a previous owner didn’t maintain them. Or if there’s damage to the outdoor unit.

You’re probably not getting anywhere 13 SEER (or whatever your specifications) in those cases. And, you probably don’t even notice.

Sure, you’ll notice that extra-high power bill in August or so. Most people chalk it up to an especially hot month and get on with their lives. But, it will continue happening — and getting worse — every year.

And, there’s one last thing to consider about your new AC’s efficiency.

<h2>Proper Installation Makes A Huge Difference</h2>

The best system in the world won’t keep your home cool or your bills low if it’s not installed properly. And, you may be surprised to learn just how many central air systems never work the way they should.

One study from 2014 stated that “installation faults significantly increase annual energy consumption.”

And, a study in Minnesota from 2016 revealed that “nine out of ten air conditioners and heat pumps have an installation or maintenance issue that, when corrected, would improve the operating efficiency of the system.”

The bottom line here is that much of what we’ve covered in this article is irrelevant if the company you hire to install your AC doesn’t do a good job.

And, unfortunately, improper installations are much more common than you may realize.

It’s crucial, then, to make sure the company you hire knows what they’re doing. Otherwise, you may never know if your new system is really saving you as much money as it should.

Finding The Right Company For Your AC Installation

You want a company with longevity and an excellent reputation: Someone who’s worked in your area for years or decades and has a physical office you can visit. Then, check their Google reviews and Better Business Bureau profile.

When it comes to the BBB, check the comments and complaints along with the rating. You may see an “A+,” but if they keep having to resolve the same complaints over and over to keep that grade, then there’s a problem.

A little bit of research helps ensure you’ll get the most for your investment when you’re installing a new AC or heating and cooling system.