HVAC operating cost calculator

How much does it cost to run an AC unit per hour?

A central AC unit at SEER2 16 costs about $0.10 to $0.18 per ton per hour at the U.S. average electricity rate of $0.18 per kWh. A 3-ton AC running 8 hours a day during a Texas summer uses around 12 kWh per day, costing roughly $2.16 per day or $65 per month. Same AC in Boston with $0.27/kWh electricity costs closer to $3.25 per day. Quick reference for a SEER2 16 central AC at the national-average rate:

• 1.5 ton AC: $0.17/hr, $1.40/day at 8 hrs, $42/month average
• 2 ton AC: $0.23/hr, $1.80/day, $54/month
• 2.5 ton AC: $0.28/hr, $2.25/day, $68/month
• 3 ton AC: $0.34/hr, $2.70/day, $81/month
• 3.5 ton AC: $0.39/hr, $3.15/day, $95/month
• 4 ton AC: $0.45/hr, $3.60/day, $108/month
• 5 ton AC: $0.56/hr, $4.50/day, $135/month

Push the SEER2 rating from 16 to 20 and operating cost drops 20 percent. Push it to 22 and it drops 27 percent. Drop electricity from $0.18 to $0.12 per kWh and operating cost drops 33 percent. Local utility rate matters more than SEER2 rating for total bill impact.

The HVAC operating cost formula explained

Two formulas cover every residential system. For electric equipment (central AC, heat pumps, mini-splits, electric furnaces) the math is:

• Power draw (kW) = capacity in BTU/hr ÷ efficiency rating ÷ 1,000
• Cost per hour = power draw × electricity rate per kWh

For cooling, efficiency rating is SEER2. For heat pump heating, it is HSPF2 (heating season performance factor 2). For gas, propane, and oil furnaces the math is:

• Fuel per hour = capacity BTU ÷ AFUE ÷ (BTU per fuel unit)
• Cost per hour = fuel per hour × fuel rate per unit

Where BTU per fuel unit is 100,000 for natural gas (therm), 91,500 for propane (gallon), 138,500 for heating oil (gallon). The calculator above runs both formulas based on which system you pick.

Gas vs propane vs oil vs electric: what's cheapest to run?

For a 60,000 BTU/hr heat load running roughly 1,000 hours per year in a mixed climate at today's national-average fuel rates:

• Heat pump (HSPF2 9, electricity $0.18/kWh): $1,200 per year
• Natural gas furnace (96% AFUE, gas $1.35/therm): $843 per year
• Propane furnace (96% AFUE, propane $2.80/gal): $1,909 per year
• Oil furnace (85% AFUE, oil $4.10/gal): $2,090 per year
• Electric resistance furnace (100%, $0.18/kWh): $3,165 per year

Natural gas wins where it is available. Heat pumps beat propane, oil, and electric by a wide margin in any mixed or warm climate. In very cold climates with cheap natural gas, the furnace wins by a few hundred dollars a year. Electric resistance heat is roughly 2.5 to 3 times more expensive than any other option and only makes sense if you have no other choice. If you are running electric resistance and have access to electricity, a heat pump conversion pays back in 2 to 4 winters.

How electricity rate by state changes the bill

U.S. residential electricity rates range from $0.11 per kWh in Louisiana and Idaho to over $0.42 per kWh in Hawaii. That means the same SEER2 16 central AC running the same hours costs nearly 4 times more to run in Honolulu than in Boise. Approximate state averages:

• Cheapest electricity: Louisiana, Idaho, North Dakota, Missouri ($0.11 to $0.14)
• Below national average: Tennessee, Kentucky, Arkansas, Indiana, Iowa ($0.14 to $0.16)
• Near national average: Texas, Florida, Ohio, Pennsylvania, North Carolina ($0.16 to $0.18)
• Above average: New York, New Jersey, Massachusetts, Connecticut ($0.22 to $0.31)
• Most expensive: California, Hawaii, Alaska ($0.30 to $0.42)

If you live in a high-electricity state, every SEER2 point matters. Going from SEER2 14 to SEER2 20 saves $300 to $500 per year in California or New York versus $80 to $150 per year in Louisiana. The same upgrade pays back 3 to 4 times faster in expensive-electricity states.

How runtime hours change your operating cost

The two biggest variables that drive total operating cost are tonnage and runtime, not efficiency rating. A SEER2 14 central AC running 8 hours a day costs the same per year as a SEER2 18 unit running 10 hours a day. Average runtime by climate during cooling season:

• Zone 1 to 2 (FL, TX, AZ): 8 to 14 hours per day, 150 to 200 days per year
• Zone 3 (Atlanta, Dallas, LA): 6 to 10 hours per day, 120 to 160 days per year
• Zone 4 (Nashville, DC, Denver): 4 to 8 hours per day, 90 to 120 days per year
• Zone 5 (Boston, Chicago, Seattle): 3 to 6 hours per day, 60 to 90 days per year
• Zone 6 to 7 (Minneapolis, Duluth): 2 to 4 hours per day, 30 to 60 days per year

If your AC runs almost continuously during the hottest week, that is a sign the system is undersized for your real cooling load. If it short-cycles (runs 5 minutes, off 10 minutes), that is a sign it is oversized and probably runs more hours than you think because of the extra start-stop cycles.

Heat pump operating cost vs gas furnace: when each wins

Heat pumps win on operating cost in most U.S. climates because they deliver 2 to 4 BTU of heat per BTU of electricity input through the refrigeration cycle. A standard heat pump at HSPF2 8 has a coefficient of performance (COP) around 2.7 in mild weather and 1.8 in cold weather. Even at the lower end, 1.8 COP means you get 1.8 BTU of heat per BTU of electricity you pay for. Resistance heat gives you 1.0 BTU per BTU. Gas at 96% AFUE gives you 0.96 BTU per BTU of gas, but gas costs a third as much per BTU as electricity.

Run the heat pump vs gas furnace calculator on this site with your actual utility rates for the lifetime comparison. The 15-year math usually favors the heat pump in zones 3 through 5, the gas furnace in zone 6 with cheap gas, and the heat pump again in zone 7 with a cold-climate Mitsubishi Hyper-Heat or Daikin Aurora unit. Operating cost is half the equation. Install cost and rebates are the other half.

Reducing HVAC operating cost without buying new equipment

Three changes that cut HVAC operating cost on existing systems by 10 to 30 percent without buying anything new:

• Smart thermostat with occupancy detection ($150 to $300, payback 1 to 2 years)
• Seal duct leaks with mastic or aerosol sealant ($300 to $1,500 by HVAC contractor, payback 3 to 5 years)
• Switch from 1-inch pleated filter to 4-inch media filter cabinet (reduces static pressure, $400 to $700 installed, payback 4 to 7 years through lower blower runtime)

All three target the same problem: the system spending energy on something other than delivering conditioned air to the rooms that need it. Combined, these three upgrades can cut annual HVAC operating cost from $1,500 to $1,000 on a typical 2,000 sq ft home, paying back $500 a year for a $1,500 total investment.