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The Heating & Cooling Professionals who CARE
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The Heating & Cooling Professionals who CARE

6. Air Conditioning Operating Costs

6. Air Conditioning Operating Costs

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.

Factors affecting cost

Many factors affect the operating cost of an air conditioner:

  • geographical location of the house
  • variance of weather conditions from year to year
  • efficiency rating of the air conditioner (SEER or EER)
  • size of the air conditioner relative to house cooling load
  • thermostat setting
  • number of occupants in the house
  • habits of people in the house – if windows are open or closed; if window shading is used; and frequency of appliance, cooking and lighting use
  • local cost of electricity

Method of calculating annual energy cost

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 energy-cost 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
= 24 x DDC•18
TOD – 18
x CAP (35°C)
x Cost/kW

Formula for calculating the yearly operating cost of room air conditioners

Cost of
= 24 x DDC•18
TOD – 18
x CAP (35°C)
0.9 EER
x Cost/kW

  DDC•18 = number of cooling degree-days (base 18°C) from Table 1
  TOD = 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.


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 degree-days 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
= 24 x 359
(30 -18)
x 36 000
x 0.0826


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
= 24 x 359
30 -18
x 36 000
x 0.0826


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 Degree-Days and Summer Outdoor Design Temperature


British Columbia
Prince George

  Calgary 40 29
Edmonton 28 28
Lethbridge 108 31
Medicine Hat 187 32

  Moose Jaw 177 32
Regina 146 32
Saskatoon 117 31

  Brandon 119 31
Winnipeg 186 31

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

  Montréal 236 30
Québec 133 29
Sept-Îles 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

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Source: Natural Resources Canada (NRCan) - Office of Energy Efficiency
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