SEER Ratings: Make the Right Decision

SEER

What does “SEER” mean?

Homeowners and contractors, alike, are generally confounded by the SEER acronym. So, let’s start with the basics:

SEER stands for Seasonal Energy Efficiency Ratio. The higher the SEER, the more energy efficient the air-conditioner. Ok, but how high is high enough?

The reality is the answer provided to homeowners is almost always incomplete – and, thus, often incorrect. Think of it this way: The most efficient air-conditioner is one that isn’t running at all. The least efficient air-conditioner is one that runs continually and never adequately cools the home. In between, you will find shades of gray.

How do I calculate which SEER rating is best for me? 

SEER is a formula – and it’s not advanced level math. Just divide the system’s rated British thermal units (BTU) by the AHRI SEER rating and, like magic, you have the kilowatts per hour (KWH) for the unit. So, let’s say you have a three-ton (36,000 BTU) 15 SEER system – 36,000 / 15 = 2,400. 2,400 is simply the number of watts consumed by your operating system each hour. So, in the same way that your car gets 25 miles per gallon of fuel – your system is using 2,400 KWH.

Next, in order to determine which of the multiple SEER rating choices best fits your home, let’s calculate your annual operating cost. So, for the sake of argument, let’s make the basic assumption that your thermostat is typically set near 75 degrees, you turn the system off when you are gone for four-or-more hours, you change the filter about 40% less than you ought to, and you have the system tuned up periodically. Let’s also assume that you have average insulation and high-quality windows.

Fortunately, quite a bit of research has been done to help determine hours of operation for our air-conditioners based on where we live. The average for Northwest Arkansas is 1,300 hours of operation annually. Knowing that the 15 SEER unit that we’re using as an example consumes 2,400 watts an hour, all we have to do is multiply – 2,400 (watts) x 1,300 (hours) = 3.12 million. And, now, you’re like… “Ok, 3.12 million, what?”

Grab your electric bill and you will notice that they do not bill in watts. They bill in kilowatts – which means they bill in increments of 1,000 watts. So, take our handy little formula and convert it accordingly by simply dividing your total watts consumed per hour (2,400) by 1,000.

2,400 / 1,000 = 2.4

Our new, much smaller, much friendlier number of 2.4 represents the number of kilowatts that your system consumes per hour. All we have left to do is convert these numbers to make it mean something to your checking account.

We’re going to assume that your total cost per KWH is .09 cents. Multiply the number of KWH your air-conditioner consumes (2.4) per hour by the number of hours it operates annually. In Northwest Arkansas, the average number of hours an air-conditioner is in operation is 1,300. 1,300 x 2.4 = 3,120 KWH annual consumption. 3,120 KWH x .09 cents = $280.80 per year for a three-ton 15 SEER air-conditioner.

Comparing Options.

So, we have determined that your annual cost to operate a 15 SEER air-conditioner is $280.80. That’s good to know, but that knowledge is only valuable if you’re able to compare this with your other options. Don’t worry, we’ve done the math for these other options below: 

14 SEER:

36,000 BTUs / 14 SEER = 2,571
2,571 / 1,000 = 2.5 KWH per hour
1,300 (hours of operation) x 2.5 KWH = 3,250 KWH consumed annually.
3,250 x .09 cents = $292.50 annually for a 14 SEER unit.

17 SEER:

36,000 BTUs / 17 = 2,117
2,117 / 1,000 = 2.1 KWH per hour
1,300 (hours of operation) x 2.1 KWH = 2,730 KWH consumed annually.
2,730 x .09 cents = $245.70 annually for a 17 SEER unit.

20 SEER:

36,000 BTUs / 20 = 1,800
1,800 / 1,000 = 1.8 KWH per hour
1,300 (hours of operation) x 1.8 KWH = 2,340 KWH consumed annually.
2,340 x .09 cents = $210.60 annually for a 20 SEER unit.

How long do you plan on owning and operating this system?

Odds are your salesman won’t ask you this question because it unveils the ugly truth in all of this: he’s setting you up to spend way more than you should have with all of this efficiency talk.

Let’s assume that your floor pricing for the 14 SEER unit is $7,148 – and let’s assume that you’re given three other options:

15 SEER – $7,870
17 SEER – $8,925
23 SEER – $12,177

IMPORTANT: Do not let the contractor compare your new unit to your old unit. That’s irrelevant. You have to purchase a new system anyway, so the base price of the lowest priced unit you’re considering should be your baseline.

So, the difference in the initial purchase price of the 14 SEER vs. 15 SEER is $722. Let’s say your expected ownership period is five years (the number of years most quoted when homeowners are asked how much longer they intend to stay in their current home). So the question is, over five years, what will the return be on your $722 investment in the more efficient unit per year?

The answer: Eleven dollars. 

The annual operating cost on the 14 SEER unit was $292.50 against $280.80 for the 15 SEER, remember? We’re talking about $11.70 per year. That means, in five years, your TOTAL SAVINGS would be $58.50 – which, by our calculations, would be a little less than the $722 extra you spent to have the more efficient unit. Crazy, right?

All you were told was that the 15 SEER unit was more efficient than the 14 SEER unit – which was true. But it was only a small part of the information you needed to make the right decision. Do the math. Consider the length of your stay in your current residence versus the up-front investment needed for the more efficient system. Then, once you’re prepared, make the right call.

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