SEER rating should be the No. 1 factor when choosing an air conditioner. Higher SEER rated AC units can save you $1,000s over the next 10-20 years in electricity bill savings.
To see exactly much you can save by choosing an air conditioner with a higher SEER (above the federally mandated minimum of 14 SEER), you can use the SEER savings calculator below. First, however, let’s look at one example:
Example: We have two 3 ton (36,000 BTU) central air conditioners. One has a 14 SEER rating and the other has a 20 SEER rating. Let’s take into account the average natural electricity cost of $0.1319 per kWh, and 1000h of AC use per season.
How much more efficient is a 20 SEER vs 14 SEER?
Solution: 14 SEER rated AC unit is powered (average seasonal wattage) by 36,000 BTU / 14 SEER = 2,570W; running it for 1,000 hours will spend 2,570 kWh. Total 14 SEER electricity cost = 2,570 kWh * $0.1319 per kWh = $338,72/year.
20 SEER rated AC unit is powered by 36,000 BTU / 20 SEER = 1,800W; running it for 1,000 hours will spend 1,800 kWh. Total 20 SEER electricity cost = 1,800 kWh * $0.1319 per kWh = $237,24/year.
In short, 20 SEER AC unit is 43% more energy-efficient than 14 SEER AC unit. Here are the savings:
- Per 1 year: $101,48 electricity savings.
- Per 10 years: $1.014,80 electricity savings.
- Per 20 years: $2.029,6 electricity savings.
You save about 7% per 1 SEER on electricity costs.
We will explain how do you calculate air conditioner SEER further on. You can use this handy SEER savings calculator to calculate how much electricity will an AC unit with a specified SEER rating and tonnage cost:
SEER Savings Calculator
Just input cooling capacity (in BTU; 1 ton = 12,000 BTU) and SEER rating:
*In the SEER savings calculator, we predispose 1000 running hours per season/year and $0.1319 kWh cost.
If you input 2 different SEER ratings, you can see how yearly electricity costs change accordingly. This calculator is often used as a mini-split energy consumption calculator; essentially you can use it as a mini split SEER savings calculator.
Mini-split example: How much does it cost to run an extremely energy-efficient 22 SEER rated 24,000 BTU ductless mini-split AC unit? Let’s use the SEER savings calculator to answer this:
You can see that this 2 ton (24,000 BTU) ductless mini-split air conditioner costs less than $200 per year to run ($190/year to be exact).
You can freely use this SEER energy-savings calculator to calculate AC energy consumption for any unit with up to 5-ton capacity and SEER rating between 10 and 25.
How Do You Calculate Air Conditioner SEER?
The SEER rating is based on the EER rating. SEER stands for Seasonal Energy-Efficiency Ratio or Seasonal EER.
EER rating is simply calculated by dividing the cooling output (in BTU, or British Thermal Units) with the maximum power draw (wattage).
Example: 30,000 BTU AC units that have a maximum power input of 3,000 W have an EER rating of 10.
Calculation: EER = 30,000 BTU / 3,000 W = 10.
To calculate SEER from EER rating, we have to use this SEER equation:
SEER = (1 × EER100% + 42 × EER75% + 45 × EER50% + 12 × EER25%) / 100
This calculation is done by HVAC engineers; we only have EER100%. To properly calculate SEER, engineers have to measure EER50%, EER75%, and EER25% experimentally.
In general, the easiest way to calculate SEER based on only EER100%, is by using this formula:
SEER = (1.12 – √(1.2544 – 0.08*EER100%)) / 0.04
Alternatively, you can use this EER to SEER calculator that uses this exact formula.
How Much Money Do You Save Per SEER?
There is no absolute figure how much you save per 1 SEER rating. It’s a relative savings calculation that must include 2 units with 1 SEER difference. Let’s look at some examples:
- 15 SEER vs 16 SEER: You save (16/15 – 1) * 100% = 6,67% savings per SEER.
- 16 SEER vs 17 SEER: You save (17/16 – 1) * 100% = 6,25% savings per SEER.
- 17 SEER vs 18 SEER: You save (18/17 – 1) * 100% = 5,88% savings per SEER.
- 20 SEER vs 21 SEER: You save (21/20 – 1) * 100% = 5,00% savings per SEER.
- 22 SEER vs 23 SEER: You save (22/21 – 1) * 100% = 4,54% savings per SEER.
We can also calculate how much more energy-efficient are AC units that have a difference in SEER rating greater than 1:
- 14 SEER vs 16 SEER: You save (16/14 – 1) * 100% = 14,3% electricity savings.
- 16 SEER vs 18 SEER: You save (18/16 – 1) * 100% = 12,3% electricity savings.
- 18 SEER vs 20 SEER: You save (20/18 – 1) * 100% = 11,1% electricity savings.
- 20 SEER vs 22 SEER: You save (22/20 – 1) * 100% = 10,0% electricity savings.
- 14 SEER vs 18 SEER: You save (18/14 – 1) * 100% = 28,6% electricity savings.
- 14 SEER vs 20 SEER: You save (20/14 – 1) * 100% = 42,9% electricity savings.
- 16 SEER vs 20 SEER: You save (20/16 – 1) * 100% = 25,0% electricity savings.
The key question that the AC SEER cost calculator can help you answer is of this kind:
Is 21 SEER worth the money?
How Much Less Do You Pay For Electricity If You Choose A Higher SEER Rating AC?
Let’s say that we’re looking at a 21 SEER vs 16 SEER unit; both have the 3-ton capacity and are pretty much the same in all regards, apart from energy-efficiency.
16 SEER unit costs $500 less than 21 SEER unit; should you buy the 16 SEER unit or is the 21 SEER unit worth the money?
Let’s use the SEER electricity cost calculator above to answer this riddle:
21 SEER 3 ton unit costs about $298/year to run.
16 SEER 3 ton unit costs about $392/year to run.
That’s a rough difference of about $100 per year. In 10 years, the 21 SEER rated unit will use $1,000 less electricity, and in 20 years – the lifespan of a mini-split AC unit – it will use $2,000 less electricity.
Answer: Even though the 16 SEER unit costs $500 more, the 21 SEER unit is a better choice. In 20 years, the net savings you get by choosing the pricier 21 SEER unit are $1,500.
Takeaway: Higher SEER Rated Units Are Financially A Better Choice
As you can see in numerous cases, it almost always makes financial sense to choose an AC unit – especially the central air conditioners with up to 5-ton cooling capacity – with a higher SEER rating.
The unit cost of lower SEER rating air conditioners might be lower. But, if you include the future electricity costs, the total cost of an air conditioner will almost always be lower if you choose higher SEER rating units.
On top of that, higher SEER units are also more environmentally friendly; we will have to use less coal, gas, and so on, to produce electricity your AC uses.
Table of Contents
Thank you! This has been helpful for computing the return on investment.
looking for saving between 13seer and 16seer for 4ton unit per year.
Hi Steve, sure, let’s use the calculator to estimate 13 SEER vs 16 SEER 4-ton unit savings. We will use 1000 h running hours per season and $0.1319/kWh electricity price.
According to these metrics, the 16 SEER unit will cost $522.50 per year to run. In comparison, 13 SEER unit will cost $643.08 per year. That’s a $120.58 difference per year. $1205.80 in 10 years and almost $2500 in 20 years.
It is also worth noting that according to the new regulatory minimum SEER ratings in 2023, you will have to choose 14 SEER AC or above (even 15 SEER or above in the south and south west). Hope this helps.
I see no discussion about maintenance cost over life of the unit. Higher SEER requires higher complexity making failures more frequent and repair cost more.
Hi there, you are about right. Higher SEER units are more complex and, in general, complex things break apart faster. However, the inverter compressors (that increase SEER rating) are quite solidly built. You don’t see many of them failing after 10 or even 15 years. If you have some stats on how to include the maintenance costs, it would be great if you can share them and we can use them to adjust the calculations.
Is this for heating and cooling? I’m installing a new system in northern NJ and it will be used for heating and cooling. I’m trying to decide between 14 seer and 18 seer for $2100 more
Hi Robert, SEER is only used for cooling. An energy efficiency rating for heating (for HVAC systems) is called the HSPF rating. You can look into the HSPF rating here.
A difference of $2100 for a 14 SEER vs 18 SEER is not all that big. 18 SEER unit will have 22% lower cooling costs than 14 SEER unit. Cooling costs obviously depend on tonnage as well but here is a quick example.
Let’s say that you would pay $600/season for cooling with 14 SEER unit. With an 18 SEER unit, you will get the same cooling output for about $468/season. That’s $132/season savings. If you use such an HVAC unit for 20 years, you are basically saving $2640. In such a case, 18 SEER unit over 14 SEER unit makes financial sense. Hope this helps a bit.
Investing $2100 at 5.25%, is about the same as buying the more expensive system. If you have something that pays back at 6%, perhaps improved insulation in the house, you might choose to spend the extra there if you have limited money. Also, if you are borrowing the money at 10% over the long term, you are losing if you buy the nicer system. This is a question of where to put your effort. In business, the outlook gets fuzzy beyond 5 years so a payback over 20 years isn’t usually chosen over a cheaper, less efficient system if every other part is the same.
Right on point, Aaron.
The calculations do not take into consideration the potential to invest the difference in cost or the increase in the price of electricity. I suspect that the cost of electricity will generally outweigh the returns from any reasonable investment.
Hi Mike, yes, the future price of electricity is impossible to predict, that’s why we keep the cost per kWh constant in the calculation. You are right; likely the future electricity cost will be higher and thus you will get even higher savings with the higher SEER AC units.
I have a 50year old condenser I am guessing is probably running between 6 to 7 seer. It is a 2.5 ton unit. Cooling season is 3-4 months per year in Illinois. Can you help me on rough savings by installing 14 seer unit and 16 seer unit replacing this tough. Inefficient unit
Hi Ken, that’s a real old-timer condenser. Of course, this is easy. Let’s say you now have a 7 SEER unit. If you replace it with a 14 SEER unit, the cooling costs will be half of what they are now (50% reduction). With 16 SEER unit, even more so.
Example: A 2.5 ton 14 SEER unit will, on average, use 2.142 kWh per hour. A 2.5 ton 16 SEER unit will, on average, use 1.875 kWh per hour. For instance, if you now have a 7 SEER unit and pay $1000 for cooling, you can expect this number to fall to $500 with a 14 SEER unit, or to $437.5 with a 16 SEER unit. Hope this helps a bit.
I have a 100 Premier AT autosize water furnace. Probably the first one they made. Installed 30 years ago and never had a problem. Im thinking I should go ahead and replace it. Should I do that or just repair it as needed? I have a bid to replace it with a new 26 EER Ground source for 25k$ and one to replace it with a 16 SEER air exchange for 10k$. The old Waterfurnace is a 14.5 EER. Any advice would be appreciated
Hi Roy, wow, that is a piece of history right there. In general, it makes a lot of sense to replace 30-year-old furnaces. The new ones will usually be more energy efficient by a large margin. The ground source one would make sense if you live in colder climates; heating with an air exchange heat pump is tough at very low temperatures. If you live in warmer climates, the 16 SEER unit would make more sense; it’s much cheaper than ground source and the new heat pumps have quite an outstanding efficiency (Coefficient of Performance is 3.0 or higher, that’s 300%+ efficiency). Hope this helps a bit in your decision making.