Air conditioning and heating can make a massive difference to your comfort at home, but they can also make a noticeable dent in your energy bill. If you've ever wondered exactly how much it costs to run your air conditioner or why your bill spikes in summer and winter, you're in the right place.
Let's break down the real cost of running these appliances, what drives those costs, and most importantly, how you can keep them under control.
What uses the most electricity in a home?
When it comes to energy hungry appliances, air conditioners and heaters consistently rank near the top. In most Australian homes, heating and cooling account for around 40% of total energy use, making them the biggest contributors to your bill.
Other heavy hitters include:
- Hot water systems (around 25% of energy use)
- Pool pumps
- Electric ovens and cooktops
- Clothes dryers
But during extreme weather, your air conditioner or heater will likely be your single biggest energy drain.
How much does it cost to run an air conditioner?
The cost of running an air conditioner depends on several factors:
System size and type
Larger systems use more power. A small split system might draw 0.5-1 kW per hour, while a large ducted system could use 5-7 kW or more when running at full capacity.
How you use it
Running your AC all day will cost significantly more than cooling your home for a few hours in the evening. The temperature you set matters too - every degree lower means higher running costs.
Your energy rate
If you're on a standard retail plan, you might be paying 25-35 cents per kWh. But if you're on wholesale pricing (like with Amber), your rate varies every 5 minutes based on what's actually happening in the energy market.
As a rough guide:
- A 2.5 kW split system running for 8 hours might only cost $1.50-$2.50 per day on a typical retail plan
- A larger 15 kW ducted system could cost $14-$21 per day under similar conditions
- Over a summer season (say, 90 days), that's $225-$1,890 depending on your setup and usage
When you're using air conditioning for bedrooms while you're asleep, running smaller units in a few bedrooms is a lot more energy efficient than running a larger ducted system. Ducted systems are great at heating or cooling larger rooms in a home, especially during the day when energy is abundant and cheaper.
These are ballpark figures - your actual costs will vary based on your specific system, how efficiently it runs, and what you're paying for electricity.
The real drivers behind appliance running costs
Understanding the cost of running appliances isn't just about the appliance itself - it's about when you're using it.
Traditional energy retailers charge you a flat rate (or simple time-of-use rates), but the actual wholesale cost of electricity varies dramatically throughout the day. During peak times - typically early evening when everyone gets home, turns on lights, starts cooking, and cranks the AC - wholesale prices spike. During the middle of the day when solar is flooding the grid, prices often drop to near zero (and sometimes even go negative).
If you're on wholesale pricing, you can take advantage of these patterns. Running your air conditioner during cheap periods (like pre-cooling your home in the afternoon when solar is abundant) and avoiding expensive evening peaks can make a real difference to your bills.
Smart ways to reduce air conditioning and heating costs
Here are some practical ways to keep your energy use and costs down:
Time your usage strategically
Pre-cool or pre-heat your home during cheaper periods rather than waiting until peak times. If you're on wholesale pricing, this can deliver significant savings.
Set a sensible temperature
Aim for 24-26°C in summer and 18-20°C in winter. Every degree of difference can increase your running costs by around 10%.
Maintain your system
Clean filters regularly and get your system serviced annually. A well-maintained air conditioner runs more efficiently and uses less electricity.
Improve your home's insulation
Seal gaps around doors and windows, close curtains or blinds during extreme weather, and consider insulation upgrades if your home loses heat or cool air easily.
Consider zoning
If you have ducted air conditioning, only cool or heat the rooms you're actually using rather than the entire house.
Use fans to help
Ceiling fans can help circulate cool or warm air, meaning your AC or heater doesn't have to work as hard.
The Amber advantage: wholesale pricing for heating and cooling
At Amber, you pay the real wholesale price of electricity, which changes every five minutes based on actual supply and demand in the grid. This means you can actively reduce your costs by:
- Running energy hungry appliances during periods of abundant renewable generation (usually midday in summer)
- Pre-cooling or pre-heating your home before expensive peak periods
- Using the Amber app to track prices in real-time and adjust your usage accordingly
Many Amber customers report lower bills than they had with traditional retailers, particularly if they have some flexibility in when they use power-hungry appliances like air conditioners.
If you have a battery, the benefits are even greater - you can charge your battery when wholesale prices are low (or even negative), then use that stored energy to run your air conditioning during expensive peak periods without paying peak rates.
Understanding your options
Every home and situation is different, but understanding the real cost of running your air conditioner or heater puts you in control. Whether you're comparing appliance running costs to decide on upgrades, trying to figure out why your bill spiked, or looking for ways to reduce your energy expenses, the key is knowing what's actually costing you money and when.
With wholesale pricing from Amber, you get complete transparency on what you're paying and why, plus the opportunity to genuinely reduce your costs by making smarter choices about when you use energy.
Ready to see how much you could save? Check out Amber and see the difference wholesale pricing can make to your energy bills.
