Will Installing AC Hurt Your Wallet?

Air conditioner repairman explaining cost of repairs to homeowners.

 SDI Productions/Getty Images

Table of Contents
Table of Contents

As the fall season takes full effect, you may be thinking of how you don’t want to spend another summer season like this past one–sweaty and sticky due to the massive heat waves that crossed the country. One option is to buy an air conditioner or invest in a complete AC system.

If you’re worried about the costs, you aren’t alone. Many people avoid buying an air conditioning system because they don’t want to pay for it—or the associated power bills. Here’s the lowdown on how an air conditioner will affect your wallet.

Cost to Get AC

The first thing to do is decide whether to buy a window unit, a portable air conditioner or a central AC system. About 60% of U.S. households used central air systems in 2015, while 23% used individual units, and just under 5% used both, according to a government survey. 

Window Unit/Portable AC   

A window unit or portable air conditioner is most practical when you have a smaller space to cool. When you look at the product description, it will indicate the square footage area that it can cool, so think about the size of your rooms. 

These units can cost you anywhere from about $200 to upward of $2,000, depending on the area you want to cover. A well-known brand of a 9,500 BTU (British Thermal Unit) window unit that cools about 450 square feet might cost you $470, for instance.

The best time to shop for a portable AC or window unit is after the heat subsides. Retailers are eager to unload air conditioners in the cooler months, so this is when they’re more likely to be discounted.

Central AC

If you want to purchase central AC, the unit and installation will cost between $3,000 and $10,000—a major investment. A lot depends on the size of your house and whether or not you have the ducts in place from an existing forced-air heating system. In 2014, Angie’s List members reported paying an average of $5,230 for central air.

If you plan to go this route, you should be confident that you aren’t going to be moving out of your house in the near future, because unlike a portable or window unit, you can’t take central air conditioning with you.  

Of course, you can often get tax credits back following the installation, particularly if you use an Energy Star style unit. (Check this map showing state and federal incentives and rebates by state.) And having central AC may increase the value of your home whenever you do sell. 

Impact on Power Bill

The cost to run your air conditioning varies a lot by where you live, not surprisingly. In 2015, the average cost was $525 a year in the hot-humid section of the Southeast U.S., $319 in the mixed-dry/hot-dry of the Southwest, and just $60 in the marine region along the upper West Coast, according to the government study. 

Your own cost will depend on a number of factors, including the temperature outside, how well your home is insulated, the cost of power in your area, the size of your home and how long you run it. 

For the cost of electricity in your state, check the list compiled by the U.S. Energy Information Administration. Use your state’s figure with an online energy use calculator to give you a rough idea of how much AC would run you. (HVAC.com calculated that in its Ohio headquarters, it cost the company 54 cents to run the central AC for an hour.)

The average annual cost for U.S. households to have central air was $299 in 2015, about twice as much as the $156 for individual units, according to the government study. Interestingly, the cost per square foot was lower for central air—15 cents versus 31 cents—but the homes using central systems were often larger.

To ensure your power bill doesn’t go sky-high, keep your air conditioning units well maintained. Changing the filter on your unit regularly and scheduling annual maintenance on central systems will help you keep costs low.

In addition, it’s a good idea to only run the AC when you really need it. If you’re extremely hot because you’ve just been out for a run, don’t adjust the air conditioning. Instead, cool down another way and continue to keep your AC at a reasonable temperature, somewhere between 72 and 78 degrees. Using a ceiling fan, for instance, will let you keep your thermostat 4 degrees higher without sacrificing your comfort.

Alternatives to AC

If you don’t have an air conditioner, you’re probably already accustomed to using ceiling or box fans, keeping the windows open and taking cold showers. In addition, keep shades closed so the sunlight doesn’t heat up your house more, and minimize your use of heat-generating appliances like ovens and dryers. 

You should also turn off lights when they aren’t in use and run appliances like your washing machine and dishwasher at night, when it’s the coolest, so they don’t bring up the temperature of your home to an uncomfortable level.

Although you may not be as comfortable as you would be with air conditioning, at least you’ll be saving money and using less energy.