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Formula used
Annual energy use is estimated from cooling capacity, runtime, and efficiency:
- Capacity (BTU/hr) = Tons × 12,000
- Annual kWh = (BTU/hr × Hours) ÷ (SEER × 1000)
- Annual cost = kWh × Electricity rate
- Total savings = (Old cost − New cost) + (Old maintenance − New maintenance)
- Payback = Net upfront ÷ Year‑1 total savings
- NPV = −Upfront + Σ(Annual savings ÷ (1+discount)^year)
SEER is seasonal; results depend on climate, ducting, setpoints, and installation quality.
How to use this calculator
- Enter system size (tons) and estimated cooling hours.
- Use your latest all-in electricity rate per kWh.
- Fill in old and new efficiency ratings (SEER).
- Add install cost and any rebates or incentives.
- Include expected yearly maintenance for both systems.
- Optionally set electricity inflation and a discount rate.
- Click Calculate savings to view results above.
Tip: If unsure about hours, try 900, 1200, and 1600.
Example data table
| Scenario | Tons | Hours | Old SEER | New SEER | Rate | Install | Rebate |
|---|---|---|---|---|---|---|---|
| Moderate use | 2.5 | 1200 | 10 | 16 | 0.18 | 4200 | 400 |
| High use | 3.5 | 1800 | 9 | 18 | 0.22 | 6500 | 600 |
| Low use | 2.0 | 800 | 11 | 15 | 0.15 | 3400 | 250 |
Insights
Efficiency inputs and load hours
This calculator estimates annual cooling energy from capacity, runtime, and efficiency. A 1‑ton system equals 12,000 BTU per hour. If a 2.5‑ton unit runs 1,200 hours, it delivers 36 million BTU seasonally. Dividing by SEER converts that load into kWh, letting you compare older 10 SEER equipment with newer 16–20 SEER options. Seasonal humidity loads may vary.
Energy cost comparison
Annual kWh is multiplied by your electricity rate to produce Year‑1 energy cost. For example, if the old system uses 4,320 kWh and the new uses 2,700 kWh, the difference is 1,620 kWh. At 0.18 per kWh, that is about 292 in first‑year energy savings before maintenance and incentives.
Maintenance and rebates
Replacement economics improve when repairs rise on aging equipment. Enter expected annual maintenance for both systems; the tool adds the difference to energy savings. Rebates and incentives reduce the net upfront cost, which is calculated as install cost minus rebates. If installation is 4,200 and rebates are 400, the net cost is 3,800. If you finance the project, compare savings with the loan payment separately.
Payback, break-even, and NPV
Simple payback divides net upfront cost by Year‑1 total savings. Break‑even tracks cumulative savings year by year. NPV discounts each year’s savings using your discount rate, then subtracts net upfront cost. Positive NPV suggests the upgrade returns more than the chosen discount rate over the projection period. A longer projection window typically increases total savings, but only if the equipment lasts through that horizon.
Interpreting the chart and decisions
The chart plots projected annual costs for old and new systems and highlights yearly savings. Electricity inflation increases future rates, widening savings when efficiency is higher. Use sensitivity ranges for hours, rate, and incentives to see best‑ and worst‑case outcomes. Combine the financial result with comfort, noise, warranty, and reliability to choose the right replacement timing.
FAQs
1) What does SEER represent in the calculator?
SEER is a seasonal efficiency rating. Higher values mean less electricity for the same cooling output. The calculator uses SEER to convert cooling load into annual kWh and cost.
2) How do I estimate annual cooling hours?
Use thermostat runtime history if available. Otherwise, start with 900–1,600 hours for many homes, then test a low, medium, and high scenario to understand the savings range.
3) Why can payback look very long or show N/A?
If total Year‑1 savings are zero or negative, simple payback is not meaningful. This can happen when the new efficiency is similar, hours are low, or maintenance savings are small.
4) Do rebates reduce taxable income or just upfront cost?
This tool treats rebates as an upfront reduction to installation cost. Tax effects vary by program and location, so use after‑tax rebate values if you know them or consult a tax professional.
5) How is NPV different from total savings?
Total savings adds yearly savings without discounting. NPV discounts future savings using your chosen discount rate, then subtracts net upfront cost, helping you compare alternatives with time value of money.
6) Should I include duct repairs or thermostat upgrades?
If they are part of the replacement project, add them to install cost. If they reduce runtime or improve comfort, consider lowering cooling hours or maintenance to reflect expected performance improvements.