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Keep Your Cool (and Your Cash)

The heat is on and a lot of consumers are starting to sweat the AC bill. Given that air conditioning accounts for as much as 70% of summer energy costs, talking about the weather has gone from polite conversational filler to a worthwhile money-saving topic.

According to the U.S. Department of Energy, heating and cooling is the largest energy expense for most people -- blowing about 56% of the energy use in a typical home. For a U.S. family, the average $1,500 annual utility tab breaks down like this, says the Energy Information Administration: roughly 42% on heating/cooling; 14% to heat water; 36% on lighting/appliances; and 9% on refrigeration.

Mr. Electricity puts the costs into everyday context. He says that running central AC for 12 hours a day for three weeks uses more energy than leaving the refrigerator door open 24 hours a day for an entire year. (I'm not willing to sacrifice my fudgesicle stash to fact-check that theory.)

Let's compare cooling bills!
What does it cost to run the AC across the country? The Air-Conditioning and Refrigeration Institute (ARI) took a peek at utility bills to glean the average annual cost of cooling a 2,000-square-foot split-level house (depending on the energy efficiency of your unit). Note that SEER stands for "seasonal energy efficiency ratio."

REGION

SEER 7

SEER 9

SEER 11

Southeast

$757

$589

$482

Southwest

$469

$365

$298

South Central

$964

$749

$613

Northeast

$301

$234

$192

Northwest

$100

$77

$63

North Central

$364

$282

$231



The SEER average in 2005 was 11.2. In January, manufacturers were required to meet new minimum efficiency standards for all newly manufactured central air conditioners and heat pumps. (The minimum rose from 10 SEER to 13 SEER.)

What can you do if your utility bills are way out of whack with the averages mentioned above? Before canning your HVAC unit, consider some smaller measure that can result in summer bill relief.

Saving by degrees
We've all heard it plenty of times -- turning up the thermostat keeps your cooling bill down. But there's no need to suffer in sweltering heat. Even modest adjustments can make a difference.

The pros say that each degree setting below 78 degrees increases your energy consumption by about 8%. And every degree you raise the thermostat equals 1% to 2% of savings on your summer cooling bill. A programmable thermostat makes it effortless to keep the house at a higher temp during the hours when you're not around to fiddle with the dial.

But that's not the only way to crank up the summer savings.

Use AC SPF: If you use a window unit, too much sun directly on your unit's outdoor heat exchanger can lower its efficiency as much as 10%. Keep it shaded with vegetation without blocking the air flow (or the maintenance guy's way).

Embrace the darkness: The cats might not appreciate their view being blocked, but closing the curtains during the day (particularly on east- and west-facing windows) will keep the indoor temp down. Also, try to limit all heat-generating chores (laundry, dishwasher-running, baking) to nighttime.

Sacrifice the spare bedroom: If there are rooms (or entire wings) to the house that you don't use much, close the vents and shut the doors and concentrate your air conditioner's efforts on cooling the high-traffic areas instead.

Go with the flow: All AC operation manuals recommend cleaning or replacing your air filter at least once a month. (Easier said than done in my place, where doing so requires moving a bookcase. Is that bad feng shui?) Most filters cost less than a cappuccino, and a clean one can lower your AC's energy suck by 5% to 15%.

Keep your coolant: According to the Air Conditioning Contractors of America (ACCA), a system that's 10% low on coolant (or freon or the "refrigerant charge") costs about 20% more to operate than a system that's fully loaded. (Leave the topping-off to the pros since it's a hazardous substance.) Additionally, low freon can cause the compressor to overheat and die early. That can result in a big-ticket repair bill if the compressor or condensing unit needs to be replaced.

Clean sweep: During an annual checkup, your AC pro can also look for buildup on the outdoor AC and heating coils and clean them. Ask them how to check and clean the indoor coil, too. Because the coil is moist during summertime, it attracts a lot of dust. The ACCA says that dirt buildup on the indoor coil is the most common cause of poor efficiency.

It IS the humidity!: Actually, it's the dehumidifier that's the problem. The folks at www.1800anytyme.com say that running your dehumidifier while the AC is on forces the air conditioner to work harder and runs up your utility bill. For window units, run the fan on "low" on humid days. The slower air flow through the cooling system will more efficiently cut the moisture. If you have central air and live in a humid climate, put your thermostat on "auto" instead of letting the fan run the entire time.

Keep a lid on it: Grandma was right about drafts being dangerous. Worn out (or nonexistent) weatherproofing can result in serious air leaks that can contribute to more than one-third of cooling costs. (Looks like plastic sheeting and duct tape are handy to have around.) About 30% of the heat in your house is absorbed through the roof. Vents and attic fans can help keep things circulating and prevent your bills from going through the ... well, you get it.

Maintenance matters: Ignore regular maintenance at your peril. Overlooking the small things (like changing the filter and cleaning the coil) can reduce your unit's original efficiency about 5% each year.

Big chill savings: Switching to a high-efficiency air conditioner, though costly, will probably put the most money back in your pocket over time -- cutting your energy use by 20% to 50%.

According to ARI, with regular maintenance, the average cooling unit made in the '70s and '80s will last 15 years. However, a homeowner replacing a 10-year-old unit could improve his or her energy efficiency by as much as 55% by upgrading to a system with a more efficient SEER.

As one Motley Fool GreenLight subscriber posted on my blog, it's not just energy bill savings you'll see by switching to a more efficient system. Uncle Sam smiles on energy efficient taxpayers, offering tax credits -- up to $500 per home -- for certain home improvements.

Roy Lewis wrote about the new tax credits on Fool.com in May. In addition, some states offer rebates on the cost of purchasing energy efficient units. For more on that, see this page on the Tax Incentives Assistance Project (TIAP) site.

And finally, if you're looking for a completely low-tech solution to summer heat, consider the Chillow, a "soft, medical-grade, non-electric thermoregulating device." Sounds delightful!

For regular money-saving tips, access to the advisors' off-the-cuff blogs, and a host of cool money management tools and advice, check out The Motley Fool's new personal finance and beginning investing service -- GreenLight, described in detail here.

GreenLight co-advisorDayana Yochimkeeps her cool in the DC heat by drinking plenty of fluids, using a defrizzing hair balm, and programming her thermostat.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 02, 2014, at 4:42 PM, elizalawrence wrote:

    Running your air conditioner all summer can really add up. Although it is expensive I feel like it is something that I would prefer to use spend my money on. I would much rather go out to eat less and have a cool house over the summer than go out to eat all the time and die of heat. Having a proper heating and cooling system in your home can also help everyone in your home keep good health.

    Eliza Lawrence | http://www.auroramechanical.ca/services.html

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