It’s one of those facts in life… death… taxes… and Energy Prices are Rising… every day, every month, every year we’re told about how our electricity rates, our gas rates, and our even our water bills are going up again… and we’re stuck paying those high rates whether we want to or not. That’s our reality.
So we’re stuck paying high rates for energy. But we do have a choice in how much we are going to pay… What exactly do I mean?
Well as many of you regular readers are aware, I am in the business of delivery cooling comfort, among other things…. air conditioners, heat pumps, cooling equipment. It’s May in Ottawa and every day now I am out doing quotes for people for new air conditioners. This happens all the time, so I thought I would share my thoughts on why it is important to install as high efficient an air conditioner as possible.
Air conditioners use electricity to run, and electricity among other energies has one of the fastest increasing price of all the energies. Here in Ontario Canada, electricity rates have been consistently rising over the past 13 years by an average of 10% per year. Prior to 2002, electricity rates increased at an average rate of 8% per year. What this means, is that with an average increase of 10% per year, electricity rates will effectively double every 10 years.
In Ontario in 2015, we have Time-Of-Use electricity rates. And so not to get into the nitty-gritty of it all… we have an average rate of 18 cents/KwH. (That is what we pay out of pocket, including taxes, delivery, debt retirement, etc). Given the fact that Ontario electricity rates have been increasing at an average of 10% per year for the past 13 years… and given the fact that the Ontario Government has told us that electricity rates will be going up 30% over the next 3 years (again 10%/year)… and because Hydro One (the Ontario Electricity Company) has been so poorly managed for so long and clearly is not getting any better, one can only assume that we will continue to trend at an average of a 10% increase in electricity rates every year from now on… and then some… but for argument sake let’s just assume 10%.
Air conditioners efficiency is rated by a SEER rating. The SEER rating, coupled to the size (example: 3 Ton, 36,000 btuh) will give us hoe much power the given piece of equipment actually draws.
Here in Ontario Canada, electricity rates have been consistently rising over the past 13 years by an average of 10% per year.
A 3 ton 13 SEER air conditioner draws 2.77 KwH. What this means is that at an average electricity rate of $0.18/KwH, you will spend $0.50/hour to run this air conditioner. That doesn’t seem like much does it…. but do the math… $0.50/hour… running on warm days an average of 12 hours/day (super hot days will be more)… okay so that’s only $6/day… but wait that’s $180/month…. or $720 for the cooling season.
A 3 ton 26 SEER air conditioner draws 1.38 KwH. What this means is that at an average electricity rate of $0.18/KwH, you will spend $0.25/hour to run this air conditioner… or $360/cooling season.
So what about when electricity rates double in 10 years. And don’t fool yourself. The air conditioner that you install today will still be running in 10 years, 15 years, and almost certainly 20 years from now.
So… 10 years from now… Take that same 3 Ton air conditioner… When electricity rates are $0.42/KwH… that 13 SEER will cost you $1675 over the cooling season… and the 26 SEER will cost just $837/year.
How about 20 years from now when electricity rates are $0.85/KwH… That 3 Ton system will run you… yes… $3390/year to run… or simply add $847 to your monthly electricity bill.
You get the point. We all have choices. Don’t just think about the bottom line now but think about the future and all the money you could be throwing away, or the money you could be putting back into your pocket… sending your kids through University, or taking an extra vacation. Over the course of 20 years the cheap air conditioner we install now may wind up costing us twice what the more expensive one costs to install.
Do yourself a favor and don’t go with the cheapest price, for the cheapest air conditioner.