Calculating Annual Operating Costs

In Heating & Cooling 101 by Allan WLeave a Comment

If you don’t happen to be an HVAC expert, it may be difficult or dare we even say, intimidating when shopping for HVAC equipment. Whether it’s wading in a sea of model numbers and SKU’s or deciding whether or not a contractor is trying to sell you more than you need it’s no wonder you find yourself looking for answers.

Even if you think you have the right product picked out, have you taken into account SEER rating, annual usage costs, BTU’s and all other factors?


For this post we are going to break down how you figure out how much your new piece of equipment is going to cost you annually. Take this in consideration along with the price difference between SEER ratings as well as how long you plan to stay in your home.


Before that we would like to mention that if you are having issues with your buying decision, find yourself questioning the intentions of your contractor, or are just not 100% confident, give us a call at and one of our experts will be happy to help. Our phone number is 800-880-0199.


When determining your annual cost, you need a few numbers. The BTU’s of the unit in question, it’s SEER rating, how much your electric company charges per Kwh and estimated amount of use in hours.


So let’s pretend you’re looking at a 30,800 BTU unit with a 16.5 SEER rating and we are going to estimate that your unit will run for a total of 2300 hours per year.

30,800 Btu’s divided by 16.5 Seer = 1867 (Rounded Up)

Divided by 1000 = 1.87 Kwh consumed each hour

2300 hours of annual operation

2300 x 1.87 = 4301 Kwh consumed annually

4301 x 12.0 cents (cost per Kwh) = $516.12 is the annual cost of operation for a 30,800 BTU, 16.5 SEER air conditioner.


There is a lot of thought to put into which unit is the right choice for your home. From prices, brands, efficiencies and size – just to name a few. We have dedicated trade professionals for just these kinds of situations (and more!). If ever you are in a situation where you are not 100% sure, or are completely lost feel free to give our experts a call at 800-880-0199.

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