Confused about buying a new AC or repairing your old one? It is a common dilemma faced by everyone, especially if you’re on a tight budget. While a new system might save you money in the long run, it can initially cost a fortune. On the other hand, continually repairing your old system could also add up to a large sum of money. If you want to know which decision is better for your AC, use this calculator to calculate your savings on a new AC and see for yourself if it’s worth the price.

Typical Annual Operating Cost of an AC Unit, Based on Seer Rating:

Assuming that the system is a 3 Ton Air conditioner, with NV energy charge per kWh being $.12 and average hours annually used for cooling being 2200 hours, the equation is

Tonnage X 12000 (btu’s) / SEER Rating / 1000 (to get kWh) X Hours of use (estimated at 2200 in Las Vegas) X cost per kWh ($.1215 per NV Energy) 

Although this calculation is a reasonable estimate of the annual operating cost of an AC, it does not consider certain real-world factors like yearly maintenance, usage, improper installation, and poor insulation of your home.

To thoroughly understand how to calculate savings on a new AC unit, let’s look at the following example:

For this, we are using a 12-year-old, 3-ton air conditioning and heating system, with repairs costs at $500 and a SEER rating of 10. We are also assuming the new system would be a 16 SEER option.

  1. The life remaining on the system. (Expected life is 10-15 years):  3 Years
  2. Repair cost: $500
  3. Utility overpayment (Using the estimated savings calculated under the annual operating estimated costs): $361
  4. (a) Estimated future annual repairs (What you might spend every year to keep the system working): $300  
  5.  (b) Maintenance or Annual Club Membership:  $100
  6. Subtotal (3+4): $761
  7. Inflation (3% historically X [subtotal] $761 X 3 years left):  $2283
  8. Cost for existing system for 3 years + today’s repairs ($2283 + $500): $2,783

This $2783 is the amount that could be applied to a new system that will have the reliability of a new system operating at decreased running costs.

  • Amount saved by discarding the older AC unit: $2,783
  • Inflation costs avoided by switching now: $720
  • Total savings from switching to a new AC System: $3,503
  • Investment in a new system in 2020: ($8,000 – $2,783) = $5,217

With inflation of 3%, you can assume that by waiting 3 years, the cost of this same system will have gone up to $8741. That is, in 3 years, if your AC works this way, you will be paying $720 extra for it, plus you will have spent $2783 more in repair costs.