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What is SEER Exactly, and How Does It Impact Me Financially?

By: Wharton Services TACLB009531C


The acronym stands for Seasonal Energy Efficiency Ratio.  Simply stated, it is the energy consumption rating that a testing laboratory has assigned to a specifically matched air conditioning system.

While the concept is simple enough, producing the official SEER rating is complex and time consuming.  That is why it must be a certified testing lab that assigns the rating.  Here is what the lab must determine per system:

watts of electricity consumed, per hour,

average operating hours in the course of an entire year

average weather conditions

average structure conditions

Here is an example of the basic financial impact of the SEER rating after it has been determined by the testing lab:

Let’s use a common system.  A 3 ton, 15 SEER system energy consumption would look like this:

3 tons of air conditioning is 36,000 btu per hour (12,000 btu = 1 ton of air conditioning)

Divided by 15 (the SEER rating) is 2400 watts if electricity per hour

However, utility providers do not bill us per watt of electricity used.  We are billed per Kilowatt.  That means simply per 1000 watts.  So, 2400 watts divided by 1000 is 2.4 kwh (kilowatts per hour).

So, in this scenario, every hour our system runs, it consumes 2.4 kwh of electricity.  

So how much will it cost to operate?  To keep the math simple, let’s assume that after the basic rate, all taxes, surcharges and incidental fees, we pay 10 cents per kwh to our utility company.  

Operating cost for this system is 2.4 kwh times $0.10.  That’s only 24 cents per hour to operate our air conditioner.  That sounds like a real bargain.  


Now, let’s finish the rest of our cost calculations.  Here are the main factors that determine annual operating cost:

Where we live

The condition of our house

The condition of the air conditioning equipment

The condition of our air delivery system (duct work)

Where we live:  the closer we are to the equator and/or large bodies of water, the longer our system will run to keep us comfortable

The condition of our house:  The condition and amount of insulation in our house is a factor that the air conditioner has to address.  Air being allowed into and out of our house (called infiltration) impacts the system demand, and thus, the amount of hours it runs.

The condition of the air conditioning equipment:  SEER ratings are assigned under “laboratory conditions”.  Few of our systems run in that environment; but instead in “real life” situations.

The condition of the air delivery system (duct work):  If our duct work is pulling in outside air, or pushing out our conditioned air, the run time of the system will be effected.

For the purpose of our calculations, let’s assume that all conditions are average and we can apply the laboratory assigned SEER rating to our system’s operation.  Then, the only real variable is where we live.  

For this example, we will use the area of South, Central Texas (San Antonio area).

Typical annual operating time in San Antonio is about 2500 hours.  When we apply the 24 cents per hour we calculated above, we see a modest $600.00 operate the air conditioner.  That averages to $50.00 per month.  

Most utility providers remind us that our heating and cooling costs are about half of our utility bill.  Here, we are only addressing the cooling equipment.  Heating costs would need to be calculated separately.  So in this setting, we would anticipate a utility bill in excess of $100.00 per month on the average.

So what if our utility bill seems to be excessive?  Let’s address that in another article.

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When it comes to conditioning your home or business, Wharton Services has the knowledge and resources to deliver comfort and safety in a heating or  a/c system. 

Wharton Services has been a licensed HVAC/R (Heating, Ventilating, Air Conditioning / Refrigeration) contractor in the San Antonio, TX area since 1989.

We are qualified to service and install residential and commercial heating and air conditioning systems.  Wharton Services also offers guidance in energy conservation, IAQ (indoor air quality) surveys and products, and is often called upon to offer second opinions regarding these and a wide array of other HVAC/R issues.​

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