What Is HVAC Operating Cost?

By Anne Fonda

HVAC operating cost is the total cost of running and maintaining your HVAC system for the year. A newer, more energy-efficient HVAC system will generally have a lower operating cost than an older, less efficient system.

A lot goes into calculating your HVAC operating costs. Specific factors can lower or increase your overall cost. Factors include:

The formula for calculating HVAC operating costs is C=(P∗H∗E_[rate]∗D∗M)/1000

C is the operating costs.

P is the power consumption of the HVAC system in kilowatts (kW).

H is the number of hours the system runs each day.

E_[rate] is the cost per kWh of electricity.

D is the number of days the system operates per month.

M is the number of months the system operates each year.

Look at your energy bill to see what the current kWh rate is. You may need to estimate how many hours the system runs over the day or month because each month will be different. You can also go online and look at the last 12 months’ worth of bills to get precise numbers for your usage.

To determine the power consumption of your unit, you’ll need to know how many watts it uses. Your HVAC company can help you with this.

Once you have all the numbers, calculate the HVAC operating cost by multiplying the power consumption(P) by the number of hours(H) it operates per day, by the cost per kWh of electricity (E_), by the number of days it operates per month (D) by the number of months (M) it operates per year. Divide the result by 1000 to convert it to kilowatt-hours. Then add on the cost of maintenance and repairs for an estimated operating cost.

This basic formula relates to an electric HVAC system, such as a central air conditioner or a heat pump. You would have to use another formula to calculate the operating costs of a gas furnace.

You may find it easier to use this HVAC operating cost calculator to get an idea of what your yearly operating costs are. The more accurate the numbers you put in, the closer the result will be to your actual costs.

Your HVAC system’s energy efficiency and power consumption are big variables in the formula _above. The more energy-efficient your system is, the less power it will use to heat and cool your home, meaning lower operating costs for years to come. This is why it’s so important when you’re planning for HVAC replacement that you evaluate the HVAC energy efficiency ratings and purchase the most efficient system you can afford.

A more energy-efficient system will cost more upfront but can help you save money in the long run, provided you maintain it to keep it operating at peak performance. View our HVAC maintenance tips to optimize the efficiency of your current system.

If you’re thinking about HVAC replacement, compare the efficiency ratings and estimate the operating costs of various systems. An HVAC professional can help you run the numbers to find the most cost-effective system for your home and budget.

A Content Writer with Trane Technologies, Anne Fonda researches topics and writes for Trane® and associated residential HVAC brands. She works in collaboration with Trane Technologies subject matter experts, offering easy-to-understand, informative content on complex topics. Her goal is to help consumers make informed decisions on the products and services they need. 

She has written for HVAC and other service provider websites for over 16 years. Before transitioning to web content writing, Anne had a 14-year stint as an award-winning journalist. She graduated cum laude from the University of Missouri-Columbia School of Journalism. When she’s not working, Anne enjoys playing word games, reading, gardening, spending time with family, and visiting gardens and museums.

Expert review by Kimberly Sexton, Senior Systems Engineer