If you’re in the market for a new cooling and heating system, you may run into the unfamiliar abbreviation “SEER.” This acronym stands for “seasonal efficiency energy ratio,” and it’s a number that indicates how efficiently your new unit will run.

You can save money and lower your carbon footprint by buying the most efficient new HVAC system within your budget, so the SEER rating is a crucial consideration as you’re shopping for a new HVAC unit. You can think of the SEER rating like your car’s MPG – a higher number indicates a more environmentally friendly unit.

In 2006, the U.S. Department of Energy began requiring all newly installed central AC units to have a minimum SEER of 13, but newer units can achieve a rating in the mid-20s. To qualify for the ENERGY STAR® rating, cooling and heating equipment must have a minimum SEER of 14.5.

Higher vs. Lower SEER Ratings

Your ideal SEER will depend on several factors, including the climate where you live, electricity costs in your area and your home’s square footage and insulation.

As you’re shopping for HVAC equipment, a practical rule of thumb is to buy one with the highest SEER rating you can afford. Though these appliances are big-ticket items with a higher upfront cost, a unit with a higher SEER can more than pay for itself over time by saving you money on your energy bills.

You can evaluate this by calculating your average utility prices to run your HVAC system over time. For illustration purposes, let’s say you use a 20,000-BTU climate control for 1,000 hours per year, and electricity use in your city costs 13.19 cents per kilowatt hour.

Here are the yearly electricity costs of different SEER ratings for this example:

  • 12 SEER = $219.83
  • 14 SEER = $188.43
  • 16 SEER = $164.88
  • 18 SEER = $146.56
  • 20 SEER = $131.90

When you calculate these costs, you can see how buying the 20 SEER air conditioner instead of the 14 SEER one would save you more than $56 per year. In 10 years, that will multiply to over $560. Even if the 20 SEER has a higher initial price tag, you will more than recoup your investment over time.

How to Calculate SEER Rating

You can derive a unit’s SEER rating by dividing its output during a typical cooling season by the total electric energy input during the same period. The formula is as follows:

SEER = (1 × EER100% + 42 × EER75% + 45 × EER50% + 12 × EER250%)/100

SEER calculations also account for the indoor and outdoor temperature. During an average cooling season, the outdoor temperature varies based on weather and climate. SEER math tries to account for this by using a range of possible outdoor temperatures – specifically, 65 to 104 degrees Fahrenheit.

The formula further divides these into eight sets of five-degree increments. Each set’s average temperature gets a fraction of the total annual cooling hours. In contrast, the indoor temperature derives from a consistent 80-degree temperature of the return air, with 50% relative humidity.

Minimum and Maximum SEER Ratings

A SEER rating is a maximum, which means you should interpret it as the absolute best performance your heating and cooling equipment can achieve under ideal circumstances. In other words, if you see a SEER of 21, that doesn’t mean the HVAC unit will consistently perform to that high standard. For instance, if you frequently adjust your thermostat to account for climate fluctuations, you won’t attain your climate control’s ultimate potential for efficiency.

It’s also essential to note that your HVAC equipment’s SEER will decrease over time. For example, if you’ve owned your air conditioner for 10 or 15 years, it may initially have had a SEER of 9 or 10. However, because air conditioners lose efficiency over time, your older unit might only have a SEER of 7 or 8 today.

Units manufactured in previous years were often energy hogs – many with SEER ratings as low as 6. The average central AC unit sold today has a SEER rating between 14 and 18, but if your budget allows, you’ll want to shop for higher-efficiency models with numbers in the mid-20s.

What SEER Rating Qualifies for a Tax Credit?

In some cases, your environmentally friendly HVAC purchase might qualify you for a federal tax credit, which reduces the amount of income tax you owe to the government. Credits aim to reward essential actions that benefit our environment and economy. In most cases, credits cover expenses you pay during the year and have requirements you must satisfy before you can claim them.

Internal Revenue Code section 25C provides a tax credit for the purchase and installation of qualified energy property, which includes residential heating and cooling equipment meeting specific energy efficiency requirements. If you get a new ENERGY STAR®-rated unit installed in your home, you could qualify for a tax credit of up to $300. To apply for the tax credit, you’ll need to fill out IRS Form 5695 when filing your annual tax return. You must provide information, including the Manufacturer’s Certification Statement, to show the efficiency rating of your HVAC system.


As much as half the energy you use in your home goes toward heating and cooling, so why wouldn’t you want to maximize your energy efficiency and lower your utility bills? If you’re ready to invest in a new, environmentally friendly HVAC unit, please reach out to us at Above & Beyond Heating and Cooling for a free estimate on replacing your existing system with a new one. If you’ve already received an estimate from one of our competitors, ask us for a second opinion to ensure you’re not overpaying or getting anything you don’t need.

We have served residential and commercial clients in the Delmarva area for more than two decades, and are proud of the stellar reputation we’ve earned, including an A+ rating with the Better Business Bureau. We’re here for you 24/7, whether you need emergency or preventive service, and we back our work with a 100% satisfaction guarantee.