Running Cost of Air Conditioners – Explained

In this article we are going to answer the question – how much does it cost to run your air conditioner – in various common scenarios. After reading this, hopefully you can avoid bill shock and have a good idea of what the ongoing costs of air conditioning will be for your circumstances.

Typical Running Costs of Air Conditioning – Cooling in Summer

The table below gives a practical overview of typical monthly running costs for common air conditioning setups in Australian homes. These estimates assume an electricity price of $0.30 per kWh and moderate efficiency systems.

Assumptions:

• Electricity price: $0.30 per kWh
• Usage: 4 hours per day, 30 days per month
• System efficiency: average modern reverse-cycle units
• Climate: moderate Australian summer conditions

These figures give a useful baseline for household budgeting. Actual costs will vary depending on your set temperature, local climate, building insulation, and electricity tariff.

Costs of Reverse-Cycle Air Conditioning in Heating Mode

The table below shows typical monthly heating costs for common air conditioner sizes in Australian homes. It follows a similar calculation to cooling in summer, however in a cool Australian climate, a reverse-cycle air conditioner will use slightly less power in heating mode.

Assumptions:

• Electricity price: $0.30 per kWh
• Usage: 4 hours per day, 30 days per month
• Reverse-cycle COP ≈ 3.5 (typical modern units)
• Climate: cool Australian winter conditions

Reverse-cycle systems are significantly more efficient than electric resistance heaters. For example, heating a medium living area with a reverse-cycle split system typically costs around $50/month, whereas the same space heated with a 2 kW portable electric heater could easily exceed $100/month.

Air Conditioner Running Cost Calculator

Key Factors That Influence Air Con Running Costs

The cost of running an air conditioner in Australia can vary significantly depending on a few key factors most of which are within your control.

• System size and capacity (kW) – Larger units use more power, so a 10 kW ducted system will naturally cost more to run than a 2.5 kW bedroom split system.
• Efficiency rating – High star-rated models use less electricity to produce the same heating or cooling output, reducing running costs.
• Mode of operation – Cooling typically costs more in hotter months, while heating in reverse-cycle mode can be more efficient than resistive heaters.
• Usage patterns – How long and how often you use the air conditioner has a major impact; continuous use across the day will drive up bills.
• Electricity tariff – Time-of-use tariffs, peak/off-peak rates and regional differences (e.g. SA vs QLD vs VIC) all influence your cost per kWh.
• Climate and insulation – Homes in hot, humid regions or poorly insulated homes require more energy to reach and maintain set temperatures.
• Set temperature – Every degree lower in summer (or higher in winter) can increase consumption by 5–10%.

Tips to Lower the Running Cost of Air Conditioning

Running costs can be managed through a combination of better habits, smarter system choices, and home improvements.

1. Choose the right temperature

Set your air conditioner to 24–25 °C for cooling and 18–20 °C for heating. Each degree cooler in summer can add up to 10% to your electricity use.

2. Use fans to support your air conditioner

Ceiling or pedestal fans consume a fraction of the power of an air conditioner and can help circulate cool or warm air more efficiently, allowing you to raise the thermostat setting slightly.

3. Cool or heat only the spaces you need

Close doors to unused rooms, and make use of zoning features in ducted systems to avoid cooling or heating the entire house unnecessarily.

4. Understand and optimise your electricity plan

If you’re on a time-of-use tariff, avoid running the air conditioner during peak afternoon hours where possible, and pre-cool the home earlier in the day. There are now some plans in Australia where you can access free power between 11am and 2pm when you might be running your air conditioner.

5. Consider Solar Panels and Batteries

The best way to manage your electricity bills in Australia is to produce your own power. The STC rebate has helped millions of Australians affordably install solar panels and there is now a federal battery rebate which is useful if you don’t plan to run your air conditioning during the day.

6. Upgrade To a New Efficient Air Conditioner

If your Air Conditioner is old, it likely requires much more power than newer, efficient Air Conditioning systems to produce the same results. You can now efficiently compare the efficiency of Air Conditioners using the Energy Rating Label which is usually stuck on the device or can be found online. In NSW, Victoria and South Australia there are state schemes that provide a rebate for upgrading your old Air Conditioner.

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Jeff Sykes

CEO at Solar Choice

Jeff has consulted on over 20MW of commercial solar projects, ranging from SMEs to ASX top 100 companies. Jeff has also provided independent advice to 100s of residential solar, battery and EV charging customers across every state in Australia. He holds an MBA from the Australian Graduate School of Management and is an expert in business strategy and financial analysis.

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