Sign In

7 Tips to Save Money on Air Conditioning Costs

Here's a quick primer on how to stay cool and keep your wallet from overheating when picking out an AC unit.​​

Though we're technically still in the season of spring, June is off to a hot start in many parts of the country, and that means one thing for millions of sweltering people: air conditioning.

While we may take air conditioning for granted, it's generally an expensive luxury. Americans spend more than $22 billion a year on electricity to cool their homes with air conditioning — and use a whopping 183 billion kilowatt-hours, according to recent statistics from the U.S. Department of Energy. That accounts for at least 15% of all energy used in some homes, and in warmer climates can represent up to 70% of a summer electric bill.

If you're shopping for a new air conditioner, you'll notice quite a few different sizes and models. But one thing's for sure: Savings are always chill. Here's a quick primer to staying cool and keeping your wallet from overheating when picking out an AC unit.

What's a BTU and How Many Do I Need?

BTU stands for British Thermal Unit, and the more BTUs an air conditioner cranks out, the stronger its cooling power. But here's the problem: Most American consumers aren't sure how to translate BTUs into the square footage of a room. (No disrespect to the Brits, but maybe we need an American Thermal Unit, where 1 AMU corresponds to 1 square foot.)

Lobbying for the AMU aside, you don't have to guess how much BTU power you'll need to cool your space. Instead, download this ENERGY STAR document and turn to page three. There you'll find a handy chart that simply correlates the area you want to cool into BTUs per hour. So for example, an air conditioner with a rating of 8,000 BTUs can cool a room that's 300 to 350 sq. ft., aka one that measures about 18 ft. x 18 ft. Of course, you still have to measure your room, but we trust you can work a tape measure and apply this formula: Area equals length times width. For irregularly sized rooms, you can always estimate.

Air Conditioner + Ceiling Fan = Savings

It's one thing to run an air conditioner in your room. But combine its power with a simple ceiling fan, and you can have the best of both worlds. Costing less than a penny an hour to run, ceiling fans have an immediate impact on your domestic comfort once you buy and install them. They generally start at about $40 a piece. The nice thing about a ceiling fan is that it can make you feel anywhere from three to eight degrees cooler.

Calculate Yearly AC Costs Before You Buy

Nowadays, nearly all air conditioners come with one of those bright yellow Energy Guide stickers on the box that tells you exactly how much that unit will cost to run. Take this expense into account, as that's part of your total cost for both buying and operating the unit. Most folks think bigger is always better, but that's not so: "Air conditioners remove both heat and humidity from the air. If the unit is too large, it will cool the room quickly, but only remove some of the humidity. This leaves the room with a damp, clammy feeling. "A properly sized unit will remove humidity effectively as it cools," says the ENERGY STAR website.

Why a New Window Unit Could Pay for Itself

If your air conditioner is more than 10 years old, you should seriously consider replacing it. Many new ENERGY STAR air conditioners are so efficient that they use about 10% less energy than one without that designation, according to U.S. Department of Energy estimates. Depending on how long you hold onto the new unit, you could save $60 or more over its lifetime in energy costs alone — a de facto rebate just for upgrading to an ENERGY STAR model.

The key number to look for is the Energy Efficiency Rating (or EER): The higher the EER, the more efficient the unit. So if you replace an old EER 5 unit with a new EER 10 unit, you'll cut your cooling costs in half. You should also look for the "ENERGY STAR" and "Energy Guide" labels when purchasing a window unit. An energy-efficient unit will cycle the compressor on and off so that it doesn't operate continuously. And ENERGY STAR central air units are on average 14% more efficient than standard models. Speaking of which ...

The Great Central Air Debate

If you're thinking about upgrading to central air, it's easy to beat yourself up for being an energy hog, or to get intimidated by the sticker price. Yes, it's true that central units will use a lot more power than, say, a single window unit on each floor of a 2-story dwelling. But if you have more than two rooms to cool, then your best bet is to go with a central unit, which also provides long term resale value for a home. Well-designed central systems also win out in terms of being able to filter the air for allergens and pollutants, and for controlling humidity.

Again, keep in mind that window AC units aren't necessarily more energy-efficient than central air units. A window unit that is too small to cool a room may run continuously, wasting energy. When shopping for a central air conditioning system, make sure the SEER number (seasonal energy efficiency ratio) is 13 or better (14 in warmer climates). A less efficient system will cost you more to run.

Help Your New Air Conditioner Do Its Job More Efficiently

It's easy to think that buying a new air conditioner or two will solve all of your summer cooling problems. But your AC could use a little help. With central units, for example, a programmable timer or thermostat can save you about $180 every year in energy costs by regulating the temperature when you're out of the house, and by turning on only when you return home.

With window units, air filters get dirty, and fast. Clean your AC filter at least every month, as a dirty filter makes your AC work harder and use more electricity. Regardless of the type or age of the unit, you should change your filters after every 90 days of use. What's more, you'll use less energy cooling down a room by keeping direct sunlight out during the day: Sunlight can raise room temperature by 10 to 20 degrees. The less heat that gets into your home, the less you have to pay to remove it. It just so happens that drapes block sunlight and heat better than blinds.

Hot Air Conditioner Deals

We've got an ever-updated list of air conditioning deals for you to peruse and compare. This time of year, sales are as plentiful as backyard barbecues. Certainly one of the worst things to do is feel a heat wave hit you in the face, rush to the first store you can find, and buy the first unit you see. Chill out, if you will, and do some comparison shopping, checking out multiple units for price, efficiency, reliability, and features.

The few minutes you spend comparing notes and using your shopping smarts will do more than show off how cool you are. It will help you make a prudent choice with your money that will keep your living space comfy all summer long, and for many summers to come.

Contributing Writer

Lou Carlozo is a DealNews contributing writer. He covers personal finance for Reuters Wealth. Prior to that he was the Managing Editor of, and a veteran columnist at the Chicago Tribune.
Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
You might also like
Leave a comment!
or Register
Ceiling fans are really underrated. They can make a huge difference, especially when it's cool in the house, but you need a breeze. I've been using just my fan for a few months now, because my AC unit broke on me. I'm looking for a new one now, hopefully I can get something more energy efficient than the old thing I had. p://
Thanks for this great article, I like this article
Thanks for this great article
Enjoyed the article but your comment about technically still being in the season of spring is not correct. Summer solstice, to which I am guessing you are erroneously referring to as the "official" beginning of summer is merely the beginning of astronomical summer. Nothing more, nothing less. I don't know why people think of it as the beginning of summer (or winter solstice the beginning of winter, etc.). No gov't or scientific body has ever deemed it the official beginning of summer. June 1st is the beginning of meteorological summer. June 21st is the beginning os astronomical summer. That's it. For more info. check out this link (If it is allowed)
How about installing dehumidifers?
Thank you for the useful article.
Just like a people who like me (live in Texas..) need to read before going into summer.

Let me add few more tips,

Fan direction - for cooling effect make sure your fan is running counter clock direction (cool air down)

Schedule AC check before summer comes, depends on home warranty they may have AC check service plan as well,