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Cost-Benefit Analysis: Purchasing and Running ACs


ACs have become an indispensable part of modern life, especially in tropical countries like the Philippines where temperatures can soar to uncomfortable levels. However, the decision to purchase and run an AC unit involves more than just the initial investment cost. It’s essential to conduct a comprehensive cost-benefit analysis to determine whether the comfort provided by AC justifies its financial implications.

In this article, we delve into the factors influencing the cost and benefits of owning and operating an air conditioner in the Philippines.

Initial Investment Cost

Cost-Benefit Analysis: Purchasing and Running ACs

The upfront cost of purchasing an AC unit varies depending on factors such as brand, capacity, and energy efficiency rating. In the Philippines, a window-type AC unit with a cooling capacity of 1.5 HP (horsepower) can range from ₱15,000 to ₱25,000, while a split-type AC unit of the same capacity may cost between ₱20,000 to ₱40,000. Higher capacity units or those with advanced features can command even higher prices.

Energy Consumption and Operating Costs

Cost-Benefit Analysis: Purchasing and Running ACs

The primary ongoing cost associated with AC ownership is energy consumption. In the Philippines, where electricity prices can fluctuate, it’s crucial to consider the energy efficiency of the AC unit. Air conditioners are rated based on their Energy Efficiency Ratio (EER) or Seasonal Energy Efficiency Ratio (SEER), which indicates their efficiency in cooling per unit of electricity consumed.

For example, a highly efficient AC unit with a high EER/SEER rating will consume less electricity to cool a given space compared to a less efficient unit. In the Philippines, electricity tariffs typically range from ₱8 to ₱12 per kilowatt-hour (kWh). On average, running a 1.5 HP AC unit for 8 hours a day can cost between ₱2,400 to ₱3,600 per month, depending on the energy efficiency of the unit and prevailing electricity rates.

Maintenance and Repairs

Cost-Benefit Analysis: Purchasing and Running ACs

Regular maintenance is essential to ensure the optimal performance and longevity of an AC unit. This includes cleaning or replacing filters, checking refrigerant levels, and inspecting the overall condition of the unit. Maintenance costs can vary but generally range from ₱1,000 to ₱3,000 per year for residential AC units.

There’s also the potential cost of repairs if the AC unit malfunctions or requires replacement parts. Repair costs can vary widely depending on the extent of the issue and the need for professional service.

Health and Comfort Benefits

Cost-Benefit Analysis: Purchasing and Running ACs

While the financial costs of AC ownership are significant, it’s essential to consider the intangible benefits it provides in terms of health and comfort. In a hot and humid climate like the Philippines, air conditioning can improve indoor air quality by filtering out pollutants, allergens, and airborne particles. It also helps regulate indoor humidity levels, reducing the risk of mold and mildew growth.

Moreover, AC creates a comfortable living or working environment, which can enhance productivity, promote better sleep, and improve overall well-being. For individuals with certain medical conditions such as asthma or allergies, air conditioning can be essential for managing symptoms and maintaining health.

Environmental Impact

Cost-Benefit Analysis: Purchasing and Running ACs

It’s crucial to acknowledge the environmental impact of air conditioning, particularly in the context of climate change. AC units contribute to greenhouse gas emissions indirectly through electricity consumption, especially if the electricity is generated from fossil fuels. Choosing energy-efficient AC units and reducing overall energy consumption through conservation measures can help mitigate this impact.

On the other hand, inverter air conditioners are touted for their energy efficiency. They offer a compelling solution to mitigate the environmental impact of traditional AC units. By employing variable-speed compressor technology, inverter ACs adjust their cooling capacity according to the required load, optimizing energy usage and reducing electricity consumption compared to conventional models.

The cost of inverter air conditioners typically ranges from ₱25,000 to ₱60,000 for a 1.5 HP unit, depending on factors such as brand, capacity, and additional features. While the upfront cost may be higher compared to non-inverter models, the energy savings offered by inverter ACs can result in lower electricity bills over time. For example, a 1.5 HP inverter AC unit running for 8 hours a day may consume approximately 1.2 to 1.5 kWh per hour, depending on its energy efficiency rating.

With electricity tariffs in the Philippines ranging from ₱8 to ₱12 per kWh, the monthly electricity cost for running an inverter AC could range from ₱2,000 to ₱3,600, assuming daily usage remains consistent throughout the month.


Cost-Benefit Analysis: Purchasing and Running ACs

The cost-benefit analysis of purchasing and running air conditioners in the Philippines underscores the importance of considering both financial and intangible factors. While initial investment costs vary between ₱15,000 to ₱60,000, ongoing expenses such as energy consumption and maintenance play a significant role in the total cost of ownership. However, the comfort, health benefits, and energy efficiency offered by air conditioning, particularly with inverter models, often outweigh these costs in the long run.

Ultimately, while air conditioning entails financial commitments, its positive impacts on quality of life and energy savings make it a worthwhile investment for individuals seeking relief from the tropical climate of the Philippines. By carefully evaluating their needs, preferences, and budget constraints, consumers can make informed decisions that strike a balance between comfort, cost, and environmental sustainability.

JP Reyes

JP has been in the aircon industry for almost as long as he has been alive. As a child JP would help his tatay fix aircon units at their junk shop in Cavite. After graduating UP in the early 2000's, JP then started his own Aircon servicing business and within 5 years had 10 shops in 8 different cities. Fast forward to today and JP brings all his experience and expertise online to give readers trustworthy advice and reviews about Air-conditioning buying, servicing, cleaning and repair in the Philippines.

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