About this calculator
This calculator estimates the annual electricity cost for operating a cooling system based on capacity, run hours, electrical rate, and system SEER. Use it during energy analysis or equipment ROI comparisons to understand the operating cost difference between efficiency levels. The result helps justify higher-efficiency equipment investments. Enter run hours as equivalent full-load hours, since the formula assumes the unit runs at full capacity for every hour entered.
Use when You need to estimate the annual electricity cost for operating a cooling system.
Formula Cost ($) = (BTU/hr × Hours × Rate) ÷ (SEER × 1000)
Variables
Capacity Cooling capacity in BTU/hrSEER Seasonal Energy Efficiency RatioHours Annual equivalent full-load cooling hoursRate Electricity rate in $/kWh
BTU/hr
Cooling load in BTU per hour
Hours
Total run time in hours
$/kWh
Average electricity cost per kilowatt-hour
SEER
Seasonal Energy Efficiency Ratio of equipment
Cost ($) —

How is cooling energy cost calculated?

Annual cooling energy cost is calculated by dividing the cooling capacity by the system's SEER to determine electrical demand, then multiplying by operating hours and the electricity rate. The formula is: Cost = (BTU/hr × Hours × Rate) / (SEER × 1,000), where the division by 1,000 converts watts to kilowatts. This calculation enables side-by-side comparisons between equipment at different efficiency levels. For example, upgrading from SEER 14 to SEER 20 on a 5-ton (60,000 BTU/hr) system operating 1,500 hours per year at $0.12/kWh reduces annual cost from approximately $771 to $540—a savings of $231 per year. These comparisons help building owners evaluate simple payback on higher-efficiency equipment. Actual costs vary with climate, building load profile, and utility rate structure.

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