Running costs can vary dramatically between air conditioner models, so it pays to ensure you’re using an energy-efficient unit (if you can)
We explain how much an air con costs to run, how to keep costs down, the best temperature settings and why size matters
Consider becoming a CHOICE member to access independent expert reviews of more than 300 air conditioners
Australian summers can be scorching. If you’ve just installed an air conditioner to cool down your home, or you’re planning to soon, you’re probably looking forward to not having to sweat through another steaming hot day.
But before you go and turn your living room into an icebox (or a furnace when the chilly weather hits), it’s important to understand how much energy your air con will use, and how it will affect your bills.
Cooling and heating your home can account for a decent chunk of your energy consumption, chewing up 20% to 50% of your usage depending on where you live and the local climate.
Cooling and heating your home can account for a decent chunk of your energy consumption, chewing up 20% to 50% of your usage depending on where you live and the local climate.
The good news is that a few small changes can help lower your electricity costs and your carbon footprint, which helps our planet too.
Follow our expert air con tips to help keep your energy bills in check this summer.
We’ve calculated the annual running costs for more than 300 models in our air conditioner reviews, based on each unit’s rated power consumption.
As the table shows, we’ve found that electricity costs for similar units can differ by hundreds of dollars a year. That’ll add up to thousands of dollars over 10 years, which end up being as much as your air conditioner installation costs.
Size
Annual cost*
Typical purchase price
Small (up to 4kW)
$150–$370
$470–$2700
Medium (4–6kW)
$340–$650
$500–$3700
Large (over 6kW)
$530–$1160
$1300–$4200
*For reverse-cycle models in an average climate zone, based on the estimated annual energy usage for each model, in cooling and heating modes (calculated as per the Australian Standards for air conditioners), with the remainder of the year in standby mode, and with electricity costs of 40 cents/kWh. These figures are only indicative – your actual running costs will vary depending on your home and how much you actually use the air conditioner.
Other factors affecting running costs
On top of energy efficiency, running costs largely depend on how much you actually use your air conditioning.
“If you use it rarely – say, only a few days a year during heatwaves or cold snaps – you may be OK to buy a cheaper unit that’s less efficient to run, since the running costs are less of a concern,” says CHOICE air con expert Chris Barnes.
“But if you use it a lot, such as most of summer or winter, then you absolutely should be looking for a very efficient model.”
Chris also stresses that there are many factors beyond the unit itself that will affect the running costs.
“Variables such as the climate zone you live in, your home’s location, thermal efficiency and insulation, outdoor temperature and the set target indoor temperature can all significantly impact how hard the air conditioner has to work,” he says.
Running costs in the cold zone or hot zone tend to be higher than for the average zone
Energy star ratings are now based on the Zoned Energy Rating Label (ZERL), which shows ratings based on climate zones, making it easier for you to decide which unit is best for where you live.
Running costs can vary between models by hundreds of dollars a year, so it pays to choose well.
Typically, running costs in the cold zone (e.g. Canberra, Melbourne or Hobart) or hot zone (e.g. Darwin or Brisbane) tend to be higher than for the average zone (e.g. Sydney, Perth and Adelaide).
That’s because the air conditioner usually runs for longer in those areas, and may also have to work harder in the extremes of cold or heat.
Our detailed air conditioner reviews include the zone star rating labels for each model where available. We calculate running costs for cold, average and hot zones based on this zoned energy data, for those models that have it.
Too big and you could be using more electricity than you need because the unit may run frequent short cycles to achieve the target temperature. Too small and it will have to work too hard to cool or heat your space.
“Aim for the sweet spot in terms of size,” says Chris.
For those that have a house that’s poorly insulated, a smaller unit will need to work harder and will likely end up costing more to run than a bigger unit in a more efficient house.
You should also keep in mind that most models these days are inverter units. This means the air conditioner adjusts its output to maintain the target temperature you’ve selected for the room. And a room’s ability to maintain its temperature will depend on how well it is insulated.
So, if you have a bigger, more powerful air conditioner operating in a well-insulated house, it will be running at quite efficient levels and could be more effective than a smaller unit that typically costs less upfront.
For those that have a house that’s poorly insulated, a smaller unit will need to work harder and will likely end up costing more to run than a bigger unit in a more efficient house.
Make sure your unit is well positioned and regularly maintained for optimal efficiency.
Make sure the unit is installed in the best position
Chris says to get a professional to assess your home and make a recommendation as to the best possible location for both the indoor and outdoor units.
“It won’t make a huge difference to your running costs, but could definitely have an effect,” he says.
You don’t want the unit to be baking hot or freezing cold, as it’ll have to work harder and therefore cost you more
Chris Barnes, CHOICE air conditioning expert
“For example, for a typical unit mounted high on a wall, you want to ensure it can blow lengthways across a room without any obstruction – give it a chance to reach across all corners of the room and lower the temperature.
“And for the outside unit, it’s best if it’s not exposed to extreme temperatures. You don’t want the unit to be baking hot or freezing cold, as it’ll have to work harder and therefore cost you more.”
Check energy star ratings and understand power consumption
“Look at the unit’s energy star rating, or the running costs that we calculate in our testing based on average usage,” says Chris. “These will give you the best idea of which models are the most cost-effective to run.”
An example of a Zoned Energy Rating Label.
The Zoned Energy Rating Label (ZERL) gives a seasonal efficiency rating for three climate zones across Australia and New Zealand, which gives you more targeted energy-saving information to help you choose the best appliance for your needs.
At CHOICE, we regularly find that a unit’s performance doesn’t always match the advertising hype, so be sure to check our reviews before you buy to see how models really rate, and what they cost to run.
Keep it clean and serviced
A dusty air conditioner can’t do its job properly, as it’ll have to work overtime to draw in air, cool it down and send it back out into your home.
The harder your air con needs to work, the more energy it’ll burn through. This can lead to higher energy bills for you, not to mention the poorer quality air you’ll be breathing.
We recommend cleaning your air conditioner and keeping the filter well-maintained so it can work as efficiently as possible. If your air conditioner seems to be performing poorly, it might simply be down to a clogged filter.
A service and a deep clean might also be worth considering if you’ve just moved into the home and found that the air conditioner looks very dusty and neglected
Chris Barnes, CHOICE air conditioning expert
For those deeper cleans, Chris says paying for a professional is worth the money.
“It’s especially worth considering if you live in a very dusty or humid area, where dust and mould build-up inside the unit is a risk,” he says.
“A service and a deep clean might also be worth considering if you’ve just moved into the home and found that the air conditioner looks very dusty and neglected.”
Check the manual for recommendations on having the air conditioner serviced. A service at least every few years is usually advisable to make sure there are no refrigerant leaks and that everything is working as it should.
If you notice any problems such as poor performance (even when the filters are clean), strange noises or smells, call in a service straight away.
Eco mode is one way you can reduce your energy use.
Learn how to use the settings and save
We recommend taking the time to learn your air con’s settings. Make sure you’re using the right mode for the season – that’s cool mode for summer and heat mode for winter – and use eco mode if it’s available to you.
Some air conditioners give you the option of setting a timer, which can be useful if you want the unit to switch off once you’re sleeping and the outside temperature has cooled down.
Newer air con units can also come with smart features and app capability, so you can switch it on from wherever you are to cool the house down before you get home, or switch it off if you accidentally left it running when you left the house.
Insulation helps to block heat from entering your house in summer.
Give your air con a helping hand
Once the air conditioner’s on, there are a few things you can do to get the most value out of it. First up, we suggest using a ceiling fan or pedestal fan to help circulate the cool air coming from the unit.
These are cheaper to buy and run than an air conditioner, and they’ll help you feel a little cooler.
Closing the windows is a no-brainer, but Chris says you should also close any blinds and curtains to help keep the cool air inside.
“On a hot day, heat can come in through ceilings, walls and windows, so think of closed blinds and curtains as another layer of insulation you can add,” he says.
You can also contain the cool air by keeping doors closed to rooms you’re not using.
A well-insulated house isn’t just beneficial in the winter, it’ll help keep your home nice and cool in the summer too, so it’s worth making the investment.
If you have ducted air conditioning or more than one unit, use zoned heating and cooling so it’s only operating in areas people are actually using – and close doors so the air keeps circulating in areas being used.
Consider switching to solar power
Solar is a considerable investment, but it can significantly reduce your electricity costs in the long term. You can use our solar estimator to get an idea of the upfront costs you might be looking at for solar installation, plus how much money you could potentially save by making the switch.
The difference between the temperature outside and the temperature you set your air conditioner to will have a significant effect on your power bills.
To give you optimal coolness for the cheapest price, you should aim for a difference of about 8°C between the outside temperature and the temperature you set your air conditioner to.
“The running costs and energy used by your air conditioner can vary hugely based on a number of factors,” says Chris.
For the best efficiency, aim to set your unit around 8°C cooler than the outside temperature
Chris Barnes, CHOICE air conditioning expert
“But generally, for the best efficiency, aim to set your unit around 8°C cooler than the outside temperature.”
Sticking to this 8°C differential will also save on wear and tear on the air conditioner’s motor.
In general, Chris says, each degree cooler usually adds about 10% to the running cost of your air conditioner.
Obviously this is just a guide, and there’ll be times when you need to crank the air con. Setting the air con to 32°C on a 40°C day isn’t a great idea, no matter how much money you’ll save.
When you need to warm your cockles in winter, reverse-cycle air conditioners are one of the most efficient and cost-effective ways to heat individual rooms and large living spaces, beating electric and gas heaters on running costs in our assessments.
Just like in the summer, the difference between the temperature outside and the temperature you set your air conditioner to will have a significant effect on your power bills.
And just like in summer, the sweet spot between comfort and cost is a difference of about 8°C between the temperature setting of your air con and the temperature outside.
Of course, this rule doesn’t necessarily apply in freezing temperatures: no one’s going to set their air conditioner to 3°C when it’s -5°C outside.
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
LinkedIn
Pru Engel is the Audience and Engagement editor at CHOICE. Her job is to ensure as many Australians as possible know about the great work we do at CHOICE.
She works closely with our testers and experts to find the gems of information in our data and research that will resonate with Australian consumers and help them make the best decisions, whether they're purchasing an air fryer, looking for a new mattress or trying to find the cheapest car insurance. She also helps to drive meaningful change for consumers by collaborating with our Campaigns team on content covering issues such as grocery pricing, product safety and scams.
Prior to CHOICE, Pru worked as an editor at many of Australia's leading food and lifestyle titles.
Pru has a Bachelor of Arts in Communication (Journalism) from the University of Technology, Sydney.
LinkedIn
For more than 60 years, CHOICE has been fighting the good fight for Australian consumers.
In the past year alone we've uncovered systemic issues with sunscreens, investigated shonky supermarket pricing, fought for stronger scam protections and helped make complex energy pricing fairer and clearer.
CHOICE is here to provide unbiased advice and independent testing in our world-class labs. We buy the products we test, just like you do, and our expert reviews are influence free. We’re here to help you choose smarter. Hopefully you’ll also save some money along the way.
Thanks to CHOICE, you’ll never be alone when a business treats you unfairly. You can support our work by joining or donating to our cause.
