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Air conditioning is an essential part of modern homes. No home is complete without it, especially if you are situated in a hot and humid climate. But this advancement in convenience and comfort comes at a cost.
AC costs vary based on several factors, including the type of unit, energy efficiency ratings, installation complexity, and whether additional work, such as upgrading ductwork or electrical systems, is required. Beyond the initial purchase price, you’ll also want to consider the long-term expenses, such as maintenance, energy usage, and potential repairs.
Whether you’re planning a new installation or upgrading an older unit, this guide will explain the key cost considerations when using different types of air conditioners and how to manage them.
New Air Conditioner Cost
Multiple expenditures are associated with buying a new air conditioner. Not all of them are incurred at once, but they do need to be considered when choosing to buy an air conditioning system.
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Typically, the costs of replacing and installing an air conditioner range between $3,800 and $7,500. However, this is dependent on a host of different factors, including the type of air conditioner, its size, and its capacity. You will also need to consider the size of your home and the labor costs to install the systems.
If you are thinking of switching to a smart AC, it will be even costlier, but a cost-effective alternative is converting your existing AC into a smart one with smart climate control devices. You can enjoy all the features of a smart AC and even more at a fraction of the cost.
With multiple types of air conditioners available on the market, it can be quite a challenge to compare all of them.
Related: AC Replacement Guide – Is It Time for an Upgrade?
Air Conditioner Costs by System Type
Various air conditioning systems come with varying unit and installation costs. Below are the average prices for different types of air conditioners and an overview of how each system operates. They can range anywhere from $100 to $12,000, with portable ACs being more affordable and geothermal ACs at the high end.
|
Type of AC Unit |
Average Unit Cost |
Average Installation Cost |
|
Portable AC Units |
$100–$500 |
$80–$700 |
|
Window AC Units |
$150–$800 |
$60–$400 |
|
Ductless Split System |
$2,000–$3,000 |
$1,200–$10,000 |
|
Central AC Units |
$2,500–$4,500 |
$3,500–$7,000 |
|
Geothermal |
$4,200–$12,000 |
$11,000–$28,000 |
Portable AC Units
Portable air conditioners are designed to cool a single room at a time, but they offer the advantage of mobility, allowing you to move them from one room to another as needed. These units usually have wheels for easy transport and come with a hose that vents through a window. They are ideal for spaces ranging from 100 to 1,000 square feet and are easy to set up without the need for professional installation. Prices for portable air conditioners typically range from $100 to $500.
Window AC Units
Window units are an enticing option for those with single-room apartments or smaller homes. Due to their smaller size, window units consume much less electricity. Moreover, the air leakage is also kept to a minimum in the absence of any ductwork, considering you have proper insulation.
With a window unit, you save a lot of energy, but a larger indoor space won’t be cooled as effectively due to the reduced cooling capacity. So, while it is an ideal choice for those who live in apartments, a bigger home would require multiple units. These units cost around $150-$800.
Related: Portable AC vs. Window AC: Which One Should You Choose?
Ductless Split System
Ductless air conditioning systems, often known as mini-splits, consist of an exterior compressor unit and one or more inside air-handling units connected by refrigerant lines. The most common variety is wall-mounted mini-splits, with the interior units set high on the wall and the outdoor unit put on the ground or fastened to an external wall.
These systems can be configured to chill a single or numerous rooms, depending on the number of indoor air handlers linked to the outdoor unit. This configuration removes the need for ducting, making it perfect for homes without existing ducts while also eliminating the significant expense and hassle of installing new ductwork. A mini-split system costs anywhere from $2,000 to $3,000.
Related: Mini-Split vs. Window AC: Which is the Best Choice for Your Home?
Central AC Units
Central air conditioning systems are a popular choice in areas with hot climates due to their significant cooling capabilities. While they cost more to install and operate, they effectively cool and dehumidify the entire home. The system operates by circulating cold air via a network of ducts linked to an inside air handler, while the outside unit houses critical components such as the compressor and evaporator coil. The typical cost of installing a central air conditioning system is between $3,500 and $7,000.
Related: Mini-Split vs Central Air Conditioner: Which Type Is Best Suitable for Your Home?
Geothermal Heat Pump
Ground Source Heat Pumps (GSHPs), or geothermal heat pumps, offer a highly efficient way to heat and cool buildings by leveraging the Earth’s natural, stable underground temperatures. Instead of drawing heat from the outside air like traditional air-source heat pumps, GSHPs rely on the consistent subsurface temperature, typically ranging between 40F and 70F year-round, to regulate indoor climate.
This makes them more efficient and reliable in various weather conditions. They are, however, also the most expensive to purchase and install, with the average unit cost between $4,200-$12,000 and installation costs between $11,000-$28,000.
AC Costs by Size
The cost of your AC can depend on its size—not the physical size but the cooling capacity. An air conditioner with a higher cooling capacity has a higher cost associated with it, but it can cool a much larger area more efficiently and in less time. Choosing the right AC size is crucial for energy efficiency and comfort. An oversized unit will waste energy and fail to run efficiently, while an undersized AC will struggle to cool your home, leading to overwork and higher energy costs. To avoid these issues, match the AC’s cooling capacity to the size of your home to ensure optimal performance without unnecessary strain on your HVAC system.
Labor Costs of Installing a New AC
Hiring an HVAC expert can be expensive, depending on the nature and duration of the service. Professional skills are required for most air conditioning installations and maintenance unless you choose a basic AC unit, like installing a simple window unit yourself.
Professional Installation
Due to their complexity, professional installation is essential for central air conditioners, heat pumps, and mini-split systems. These systems often involve integrating ductwork, electrical wiring, and plumbing, requiring skilled expertise for proper setup. Hiring a professional ensures the job is done efficiently and correctly, giving you peace of mind and a properly functioning system. Although professional installation may come at a higher cost, the long-term benefits of reliable operation and guidance on system maintenance make it a worthwhile investment.
DIY Installation
DIY installation is only suitable for portable air conditioners, mini-splits, and smaller window units, though these can still be heavy. For larger or permanent units, professional installation is recommended. While attempting DIY may save on labor costs, it often leads to issues that require expert help later on.
Related: How to DIY Mini Split Installation & Save Big!
Factors Affecting Air Conditioner Costs
Here’s everything you need to consider to get a clear idea of how much the AC will cost you:
Energy Efficiency
An air conditioner with a higher efficiency, known as SEER and EER, will also be higher on the pricing charts. High efficiency requires the use of better materials, superior technologies, and also strict quality control. Almost all air conditioners these days are also Energy Star certified. While this may increase your AC unit’s initial cost, better efficiency will result in long-term savings.
Depending on your air conditioner, you can make it smart by pairing it with a smart thermostat for central HVAC or a smart mini-split thermostat.
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Tax Rebates and Concessions
Many power utilities and service companies offer rebates or incentives to encourage the adoption of energy-efficient HVAC systems, helping lower the upfront costs of the equipment. Eligibility is typically based on factors like efficiency ratings and installation details. To find out if you’re eligible, check with local utility providers, state energy offices, or federal programs.
Even if your HVAC system doesn’t qualify for a rebate, you can pair it with a smart thermostat that is eligible for a rebate. Smart thermostats also provide energy-saving features, further helping to reduce your costs.
Brands
Researching customer reviews on air conditioning brands is a smart way to ensure you choose a reliable system, as the brand can also influence your total AC replacement cost. It’s equally important to evaluate your HVAC contractor to confirm they’re licensed and have a good reputation for quality installations.
Permits and Fines
Before installing an HVAC system, it’s essential to check local regulations, as many areas require permits. Failing to comply with these requirements can lead to fines or complications if your system doesn’t meet local codes. Permit costs and potential penalties differ depending on your region.
Repairing Existing Ductwork
If your ductwork is old or damaged, repairs may be necessary for your new AC to work efficiently. Depending on the extent of the damage, these repairs can range from $200 to $2,100. If mold or asbestos are found, additional removal costs will apply, but addressing these issues is crucial for your family’s health and safety.
Related: AC Ducts Guide for Cleaning and Maintenance
Electric Work and Plumbing
When installing a new AC unit, especially in older homes, modifications to your existing plumbing and electrical systems might be necessary. Central AC systems need properly functioning drain lines. Moreover, your electrical panel must be equipped to handle the additional load from both the air conditioner and thermostat, which may require an upgrade to ensure safe operation.
Existing System Removal
Proper disposal of the old AC system is essential when replacing an old one due to environmental regulations. Old refrigerants and other materials can be harmful and must be handled by professionals. Safe removal and recycling of the old unit ensure compliance with environmental guidelines while preventing any potential hazards.
The Takeaway
Minimizing air conditioning costs starts with choosing the right system for your specific needs and finding ways to improve efficiency. Now that you know what factors influence AC expenses, you can make informed decisions that fit your budget and lifestyle. To maximize savings and reduce AC costs, consider pairing your AC with a smart thermostat, which helps optimize energy usage. With this knowledge in hand, you’re ready to make the best choice for comfort and cost-effectiveness!
