If you are interested in purchasing an air conditioner, chances are that comfort is the main reason. However, cost is also a major factor. You may want to calculate the annual cost of operating an air conditioner to determine whether it is worth the investment. This section may also be valuable to you for comparing the performance and cost of equipment with identical cooling capacities before making a purchase decision.
Many factors affect the operating cost of an air conditioner:
Important note
The following formulas are intended to provide an estimate of the operating cost of an air conditioner. The actual energy consumption can vary depending on several factors, including those listed in the previous section entitled “Factors affecting cost.”
The annual cost of operation of an air conditioner can be calculated as shown below. The method can also be used to provide an estimate of the energycost savings of using a more efficient (i. e. higher SEER or EER rating) air conditioner.
Formula for calculating the yearly operating cost of central air conditioners
Cost of operation 
=  24 x DD_{C•18}  T_{OD} – 18 
x  CAP (35°C)  SEER 
x  Cost/kW  1000 
Formula for calculating the yearly operating cost of room air conditioners
Cost of operation 
=  24 x DD_{C•18}  T_{OD} – 18 
x  CAP (35°C)  0.9 EER 
x  Cost/kW  1000 
where,  
DD_{C•18}  =  number of cooling degreedays (base 18°C) from Table 1  
T_{OD}  =  summer outdoor design temperature (°C) for location from Table 1  
CAP (35°C)  =  the capacity of the air conditioner (in Btu/h) at an entering air temperature of 35°C  
SEER  =  the rated seasonal energy efficiency ratio (Btu/h/W)  
EER  =  the rated energy efficiency ratio  
Cost per kWh  =  local electricity cost (in $/kWh) 
Note that the local utility cost should be the cost per kilowatt hour based on your last monthly purchase. Most utility billing structures are such that the more energy you purchase, the less it costs per kilowatt hour.
SAMPLE CALCULATION
A Toronto resident is considering purchasing a central air conditioner. The utility rate for electricity is $0.0826/kWh. From Table 1, Toronto has 347 cooling degreedays and a summer outdoor design temperature of 31°C. The rated capacity of the unit is 36 000 Btu/h with a rated SEER of 10.0.
Substituting the values into the equation yields
Cost of operation 
=  24 x 359  (30 18) 
x  36 000  10 
x  0.0826  1000 
= 
$214/year 
The resident is also considering another unit with identical capacity but with a SEER of 12. 0. This unit sells for $250 more. To compare the two units, perform the same calculation, substituting 12.0 for the SEER.
Cost of operation 
=  24 x 359  30 18 
x  36 000  12 
x  0.0826  1000 
= 
$178/year 
The savings are about $36 per year. This represents a simple payback period of about seven years.
Remember that the more efficient model may also have a lower sound rating, and while there is no payback for noise reduction, it can be important to you and your neighbours.
Table 1. Cooling DegreeDays and Summer Outdoor Design Temperature
PROVINCE/CITY  DD_{C•18}  T_{OD} (°C)  
 
British Columbia  
Kamloops 
261 
34  
Penticton 
213 
32  
Prince George 
22 
27  
Vancouver 
44 
25  
Victoria 
24 
26  
 
Alberta  
Calgary  40  29  
Edmonton  28  28  
Lethbridge  108  31  
Medicine Hat  187  32  
 
Saskatchewan 

Moose Jaw  177  32  
Regina  146  32  
Saskatoon  117  31  
 
Manitoba 

Brandon  119  31  
Winnipeg  186  31  
 
Ontario 

London  236  30  
North Bay  119  27  
Ottawa  245  30  
Sudbury  138  29  
Thunder Bay  70  29  
Toronto  359  30  
Windsor  422  31  
 
Quebec 

Montréal  236  30  
Québec  133  29  
SeptÎles  9  22  
Sherbrooke  101  29  
 
New Brunswick 

Fredericton  143  30  
Moncton  103  28  
Saint John  37  26  
 
Nova Scotia  
Halifax  104  27  
Sydney  84  27  
 
Prince Edward Island 

Charlottetown  100  26  
Summerside  112  26  
 
Newfoundland and Labrador 

Gander  43  26  
St. John's  32  24  

Sources: Environment Canada, ASHRAE