Central air conditioning costs and ways to save money

Installing a central air conditioner costs between $4,000 and $8,000 on average, but can cost as much as $12,000 depending on the unit you buy and its features. Adding, replacing, or changing ductwork will increase the price, as will combining the air conditioner with a smart thermostat or other HVAC equipment.

Despite the initial installation costs, you can save money over time by replacing your existing unit with a more efficient air conditioner (or a heat pump that acts as an air conditioner in the summer). Read on to learn about other ways to reduce your HVAC costs. For more information on HVAC systems in general, check out our guide What Is HVAC and How Does It Work? And if you're looking to buy a central air conditioner, check out our review of the best HVAC companies of 2024.

Factors That Affect the Cost of Installing a Central Air Conditioner
Several factors affect the final cost of installing a central air conditioner, including the size of the air conditioner needed for the size of the home. The compressor type determines the type of technology your air conditioner will have, which also affects the cost. In addition to the cost of materials, there are labor costs for installation.

Cost by Unit Size

The size of a central air conditioner is measured in BTUs (British Thermal Units), or tons. An HVAC technician can perform a load calculation for your home that will determine the size of unit you need to maintain a consistent temperature. Braden Cook, senior director of product management, training and service at Carrier, points out that the larger the space you need to cool, the larger the unit you will typically need to install. However, other factors also come into play, such as the type of insulation, the number of windows and doors, and the local climate.

Cost by Compressor Type

Single-stage compressor: Also known as single-speed compressors, these compressors have only two settings: on and off. They cool a home and shut off once the desired temperature is reached. Single-stage compressors are the simplest type and have the lowest initial cost. However, they are the least energy efficient and therefore expensive to run.
Two-stage compressor: A two-stage compressor has three settings: on (100% capacity), medium (about 70%) and off. It can switch between these modes to better control temperature and humidity. Although an air conditioner with a two-stage compressor is more expensive to purchase, it saves the homeowner on operating costs in the long run.
Variable-speed compressor: These compressors are the most advanced and expensive option, but they are the most energy efficient and therefore the least expensive to run. Mark Woodruff, senior product manager at Trane Residential, explains, “When you set a temperature on your thermostat, a variable-speed system adjusts its output to keep the temperature in your home exactly where you want it. Variable speed systems can operate at between 25 and 100% capacity and always use the least amount of energy necessary to keep your home cool."

Cost by Home Size

The size of your home plays a major role in determining the price of an air conditioner because the more square feet you need to cool, the more powerful your system needs to be. The more powerful a system is, the more it will cost. A 1,000 to 1,500 square foot home will typically need a 21,000 to 24,000 BTU size air conditioner, with an average price range of $3,100 to $5,100. A 2,500 to 2,700 square foot home will need a 48,000 BTU size air conditioner, which costs on average between $4,200 and $6,200. Another factor to consider is that larger homes require more extensive ductwork and more vents, which adds additional costs to homes with larger square footage.

Labor Costs

Labor costs can add another $2,000 to the cost of materials for installing central air conditioning. Several factors affect this cost, such as accessibility to the installation area and contractor prices. If you already have ductwork installed, this will make the job much less time-consuming and can reduce labor costs to as little as $500 for installation. The time of year can also affect labor costs. Spring and early summer are the busiest times for air conditioning technicians, when supply and demand mean they can increase their hourly rates

ductwork. If you want to cool your entire house, York and Lennox explain that a split or forced-air system is probably the better option. This option situates the air conditioner or heat pump outside your home and uses a mechanical blower inside the air handler to force the air throughout the house.

In some climates, hybrid heat pump systems, which include both a heat pump and a furnace, may work better. Hybrid heat pump systems rely on the heat pump to supply heat until temperatures are near freezing. At that point, the furnace kicks in. These systems can save considerable money on your monthly bill because it costs less to run a heat pump at temperatures above 35 degrees Fahrenheit than it does a gas furnace.

Packaged systems offer another alternative. These combine cooling and heating capabilities outside of your home and work best for homes where there isn’t enough room inside for heating equipment.

The best solution for your home depends on everything from the size of your home to how many windows and how much shade you have. To best assess your needs, contact a local HVAC contractor for an in-home evaluation. An estimator or technician will take measurements, check existing ductwork and other systems, and determine the right size tonnage based on your home's size and the climate.

When to Replace Your Central Air Conditioning System
Sometimes it makes more sense to replace your existing central air conditioning system than repair it. Consult with your HVAC technician and consider these factors when deciding whether to repair or replace your AC unit.

Age: Even if your older unit seems to be working well, it can be up to 50% less efficient than newer models and may use R-22 refrigerant, which the government is phasing out in favor of R410a because it's more efficient and doesn' t deplete the ozone layer. In addition to being less efficient, older units also require more repairs. Andrew Hancock, president at Gilman Heating, Cooling & Plumbing, explains, “If your central AC system is near or beyond its life span of 15-20 years, replacing it might be a wise decision. Old central AC systems can break down frequently, and typically, repairs don’t give a long-term effect.”

Energy efficiency: Regardless of age, you may want to replace your unit to save money on your monthly energy bill. SEER ratings measure how efficient an air conditioning unit is, with high-efficiency units earning a SEER rating of 20 or more. Consider replacing your unit if it falls at the other end of the scale with a SEER rating of 13-15. Hancock says, “Old central AC systems are less energy efficient, which adds to your utility bills. On average, old systems consume up to 40% more energy compared to new systems.”

Repair costs: According to Trane and Amana, if the repair cost multiplied by the age of the unit is more than $5,000, it usually makes more sense to install a new unit. Usually you can make up the difference with greater energy efficiency and reduced repair costs.

Your cooling needs: If your current central air conditioning unit doesn't keep your home comfortably cool, it may be time to shop for a new one along with additional HVAC equipment, such as a smart thermostat, air purifier, or whole-house humidifier .

The best solution for your home depends on everything from the size of your home to how many windows and how much shade you have.

What to Look for in a Central Air Conditioning Installer
A central air conditioner’s performance greatly depends on the quality of the installation. That’s why it’s crucial to find a quality central air conditioning installer and not rely only on installation cost alone. When searching for an installer, look for the following.

Licensing

Anyone that works on your central air conditioner should currently be licensed at the state and/or local level. Depending on where you live, the requirements for licensure may include a certain number of years’ experience, passing a trade exam, or education from an accredited school.

NATE Certification

Obtaining North American Technician Excellence (NATE) certification requires additional training on proper installation and maintenance techniques and tests real-world knowledge of HVAC systems, according to the Refrigeration Service Engineers Society. NATE certification is the highest certification you can achieve in the HVAC industry.

Insurance
You want the HVAC contractor who works on your home to be insured. This protects the company if they damage your property and you if they get hurt installing your air conditioning unit.

Factory Authorization
To become a factory-authorized dealer, contractors must be licensed and insured and hire NATE-certified technicians. Some companies, like Carrier, also require dealers to have a solid business to ensure they will be around to service your equipment over the long term. Factory-authorized contractors’ technicians undergo regular training on the brand’s equipment and how best to maintain it.

Good Reviews

Reviews on Angi and Yelp can provide insight into how the company operates and its level of service. You might also want to check the contractor's Better Business Bureau ratings.

Experience and Responsiveness
Go with a company that has a long history in your area, not a startup that might fold and be unable to service your equipment in the future. And if you can't get someone on the phone when you want to make a major purchase, think how difficult it might be to book an appointment when your AC unit fails in July.

In-home Estimates

Avoid companies that give you estimates over the phone or by email based on your home’s square footage and existing equipment. An HVAC contractor can't possibly give you an accurate quote without taking in-home measurements and inspecting your current equipment.

Tips for Saving Money on Central Air Conditioning Installation
Installing a new central air conditioner can be one of the most expensive purchases you make as a homeowner. However, manufacturer's rebates, tax credits, and strategies like getting quotes from several contractors can lower your final cost.

The Least and Most Expensive Times to Install Central Air
The least expensive time of year to install central air is during the spring and fall when temperatures are milder and AC is less critical. As there are fewer installations taking place during this period, many companies may offer promotions. If you don’t see advertised promotions, you can always ask for an off-season discount. Many companies will also sell their AC units at a discounted rate to contractors during the off season, allowing them to pass the savings on to you.

How to Get the Best Price on Central Air Installation
Central air conditioner prices can vary widely because of installation fees, taxes, and your home's cooling needs. For this reason, some companies, like Goodman and Trane, won’t list price estimates for their equipment online. That's why it's so important to get quotes from at least three different HVAC contractors in your area. This will help ensure you get the best price on the total cost of your system. It also will help ensure you get the right system for your house, since some contractors may try to upsell you on a high-end unit you don't need .

Installing a new central air conditioner can be one of the most expensive purchases you make as a homeowner. However, you can save money if you buy smart.

Avoid purchasing a unit online from a third-party retailer because you’ll need to find someone to install it. This isn't a do-it-yourself project, and an installation that isn't performed by a qualified HVAC contractor (which probably doesn't include your neighborhood handyman) may void the warranty. Plus, most contractors won’t install a unit they didn’t sell because they can’t guarantee that it works correctly.

How to Get Rebates and Tax Credits on Equipment

Several rebate and tax credit programs can help lower the price of new air conditioning equipment. Rebates – which are usually only offered on higher-end, higher-efficiency units – can take the form of instant discounts, cash-back offers, financing incentives, or lower interest rates. You can learn about manufacturer rebates by visiting the manufacturer's website or talking to your local HVAC dealer.

Local utility companies also offer rebates on higher-efficiency units. For air conditioners, these will typically be mail-in rebates or bill credit. You may also be able to get instant discounts if you purchase specified equipment from a particular vendor. You can learn about local utility company rebates directly from the utility company, the manufacturer’s website, or your HVAC dealer. Finally, you can search for rebates from local energy companies at Energystar.gov.

How to Finance Central Air Installation

You have quite a few options when it comes to financing HVAC installation costs. For example, you can use a home equity loan – often referred to as a second mortgage – to purchase a new central air or HVAC system.

Another option is a home equity line of credit. This option allows you to withdraw up to a set amount during a specified period, which is typically 10 years. You can make interest-only payments or a combination of interest and principal payments. As you pay down what you owe, that amount becomes available to you again.

You can also pay installation costs with a personal loan. Compared to the weeks it can take to get a home equity line of credit, a personal loan may only take a few days, something to consider if your current unit fails. However, personal loans are often for smaller amounts and often have higher interest rates than their home equity counterparts.

You have quite a few options when it comes to financing HVAC installation costs.

While you may be able to purchase a central air system using a credit card, you also have the option of financing through the manufacturer. Most manufacturer websites have pages dedicated to financing options. Additionally, some 

Manufacturers have special programs for those who cannot qualify for traditional credit. For example, Carrier has a lease-to-own program.

How to Save Money While Operating Your AC Unit

Once you install a new air conditioner, you can take steps to ensure it runs efficiently, using the least amount of energy necessary. When your unit uses less energy, you save money.

Maintain a constant temperature

Avoid making major temperature changes or turning your air conditioner off, only to turn it back on when the heat becomes unbearable. Most AC units run best when they run within a controlled temperature range, says Perry Knight, who worked as an HVAC technician for 13 years. He suggests investing in a smart thermostat for optimal efficiency.

Change Your Air Conditioner Filters

Clogged, dirty filters reduce your airflow, making it harder for your air conditioning system to cool your home, according to the U.S. Department of Energy. Additionally, when air can’t flow through the filter, dirt can collect in the evaporator coil and limit its ability to absorb heat. Changing your filters at least twice a year and up to once a month, depending on how dry and dusty it is where you live, can lower your air conditioner's energy consumption by 5-15%. Hancock advises, “You'll know you need to replace a filter if it looks dirty or clogged with dust and debris. While the air filter manufacturer's guide provides recommendations on how often to replace filters, every home is a unique environment, and a visual check is a more reliable way to determine whether the filter should be cleaned or replaced.”

Inspect Your Ducts

Contaminants can build up inside the air handler and ducts, reducing air flow. As a result, your AC unit will have to work harder. It also reduces indoor air quality because not as much fresh air is circulating in the home. He recommends hiring an HVAC specialist to assess your ducts every two years or after any fire or water damage in your home.

Schedule Regular Maintenance

In the spring, hire an HVAC technician to provide preventative maintenance. This should include checking for refrigerant leaks, measuring airflow through the evaporator coil, inspecting belts for wear, and confirming the accuracy of the thermostat. By detecting issues before they become a problem, your unit will run more efficiently, and you can avoid costly repairs. Regular maintenance may also be necessary for your warranty. Cook explains, “Annual air conditioner preventative maintenance can not only increase energy efficiency but may also be a requirement to keep the warranty valid. Many manufacturers state on warranty documentation that installation and maintenance by a licensed HVAC professional are a part of the warranty conditions.”

Inspect Equipment for Air Flow
One easy way to keep costs down is to make sure nothing is impeding air flow. Outside, make sure the condenser unit is clear of any debris, such as grass clippings and leaves, and trim back any overgrown shrubs that could create a blockage. Inside, make sure curtains and other elements don't cover registers, and look inside the registers you can reach to ensure nothing is obstructing air flow.

Keep Your Dryer Vent Clean
A blockage in your dryer vent or lint trap can force your dryer to run longer than normal and unnecessarily heat your house. In turn, your air conditioner will work harder and cost you extra money. You can avoid this scenario – and reduce your risk of a house fire – by cleaning out your dryer vent once a year.

Best HVAC Companies of 2024
Shopping for an HVAC system can be complicated. To help with your search, see our list of top-rated HVAC systems in our Best HVAC Companies of 2024. For more about HVAC systems, see our guide What Is HVAC and How Does it Work?

• American Standard
• Amana
• Bryant
• Carrier
• Coleman
• Frigidaire
• Goodman
• Lennox
• Rheem
• Trane
• York
• Other Ratings From 360 Reviews
• Best Refrigerators of 2024
• Best Dryers of 2024
• Best Washing Machines of 2024
• Best Moving Companies of 2024

Why You Can Trust Us: 17 HVAC Companies Researched

At U.S. News & World Report, we rank the Best Hospitals, Best Colleges, and Best Cars to guide readers through some of life's most complicated decisions. Our 360 Reviews team draws on this same unbiased approach to rate the products that you use every day. To build our ratings, we researched more than 17HVAC companies and analyzed 9 reviews. Our 360 Reviews team does not take samples, gifts, or loans of products or services we review. All sample products provided for review are donated after review. In addition, we maintain a separate business team that has no influence over our methodology or recommendations.