Is a High Efficiency A/C Worth Your Investment?
May 17, 2018
When it comes time to buy a new air conditioner, one of the first questions a homeowner asks our team is almost always about efficiency. What is a high efficiency A/C? What’s the price difference? How long is the payback for installing a high efficiency A/C? While it’s important to note that every home is different, here is a quick reference guide to help you understand if installing a high efficient A/C is worth the investment.
What is a high efficient A/C?
- The most common measurement of an air conditioner’s efficiency is SEER (Seasonal Energy Efficiency Ratio). The easiest way to interpret this is like miles per gallon (MPG) to a car; the higher the number, the more efficient it is. Any new air conditioner in the St. Louis region must be at least 13 SEER per EPA regulations and the common threshold for a high efficient A/C is 16 SEER. This is when federal tax credits and local utility rebates are typically at their max. While it is possible to achieve higher than 13 SEER by installing an air conditioning system on its own, in most cases it requires replacing your entire HVAC system (furnace included) to achieve the coveted 16 SEER rating.
How much more is a high efficient A/C?
- If a homeowner decides to keep their existing furnace and only replace their A/C system, the maximum efficiency they will likely achieve is 14.5 SEER. Depending on the size of your home, this upgrade from a standard efficiency can cost anywhere from $400-$900. Keep in mind that Ameren Missouri customers will get a utility rebate of $300 to upgrade to a 14 SEER system. If you plan to replace your furnace and A/C at the same time you can expect to spend $800-$1500 more for a qualifying high efficiency A/C. This will allow you to claim the full $500 Ameren MO rebate and $350 Federal Tax Credit. However, there is a caveat to the federal tax credit--- it has been a retroactive credit the last few years so homeowners may not find out until Dec. 31st of the year they installed their A/C to know if they will receive the eligible tax credit.
How long is the payback for a high efficient A/C?
- There is not a more accurate method to determine the cost of running the A/C in your home than crunching the numbers. However, a less time consuming way to compare utility cost is by using an online utility calculator. You can select the climate and number of cooling days for the St. Louis region as well as our utility rate for the summer months. In our research, we found that a standard sized high efficient 16 SEER A/C would save about $115/year over a basic 13 SEER system. When you factor in a $500 utility rebate, it will take less than 6 years for your investment to start paying you back. Similarly, a 14.5 SEER A/C will save you about $75/year and take about 5 years to show a return after figuring in the $300 Ameren MO utility rebate.
Is it worth the investment?
- Every household is different. Some run their A/C constantly while others do so far more sparingly. Some homes have excellent insulation while others are far more drafty. There is no magic bullet to decide if it's worth the investment, but if you plan to be in your home for more than 5 years you would likely breakeven and begin seeing a return on your investment. When you couple the yearly savings with 0% financing when replacing your system, a portion of your payments could be offset by future monthly utility savings. Also, a high efficient HVAC system can qualify for Carrier Cool Cash Rebates™ for even more savings. So when it comes time to consider replacing your existing A/C, don’t hesitate to call a professional before catastrophic breakdown because you are more than likely leaving money on the table.