Estimates, Running Costs and Checklists
AC and geyser total cost: worked examples from purchase to 10 years of bills
Step-by-step total cost of ownership for a split AC, a window AC, a storage geyser and a heat-pump water heater in an Indian home, with illustrative rupee arithmetic.
The total cost of an AC or water heater over its life is purchase price + installation + electricity + servicing and repairs, and for an AC used daily the electricity is often the biggest part. A 1.5-ton split AC used 1,200 hours a year can easily use ₹6,000–₹9,000 of electricity a year at common domestic tariffs, so over ten years the bills can exceed the purchase price. A storage geyser used in winter adds less, but standing losses add up if it is left on. This guide shows four worked examples step by step. Every figure is illustrative; replace it with your own quotation, label and tariff.
This is the overview for the estimates section. Related guides: installation charges and copper piping, monthly AC electricity bill, 3-star vs 5-star payback, geyser running cost and installation, heat-pump water heater payback, AC AMC contracts and the buying and installation checklist.
The formula
Total cost over N years = price (incl. GST) + installation + Σ yearly (units × tariff) + Σ yearly servicing + expected repairs − resale or exchange value
Three inputs drive most of the result:
- Units per year: from the BEE label, scaled to your hours.
- Tariff per unit: the rate of your highest slab, because AC units are added on top of normal household use.
- Hours of use: the most uncertain input. Estimate honestly.
Example 1: 1.5-ton inverter split AC, main bedroom
Assumptions (illustrative): price ₹42,000 incl. 18% GST; installation extras ₹4,000 (8 ft extra pipe, stand, drain); label 850 units a year at the label's standard hours of 1,600; your use 8 hours a night for 150 nights = 1,200 hours; top slab ₹7.50 per unit; two services a year at ₹600 each; tariff rise ignored for simplicity.
| Step | Calculation | Result |
|---|---|---|
| Units per year | 850 × 1,200 ÷ 1,600 | 638 units |
| Electricity per year | 638 × ₹7.50 | ₹4,785 |
| Servicing per year | 2 × ₹600 | ₹1,200 |
| Running cost per year | ₹5,985 | |
| 10-year running cost | ₹5,985 × 10 | ₹59,850 |
| Purchase + installation | ₹42,000 + ₹4,000 | ₹46,000 |
| 10-year total | ₹1,05,850 |
Electricity alone is ₹47,850 over ten years, more than the AC's price.
Example 2: 1.5-ton window AC, rented flat
Assumptions (illustrative): price ₹30,000; installation ₹1,500 (no pipe run); label 1,250 units a year at 1,600 hours; use 1,200 hours; ₹7.50 per unit; one service a year at ₹500.
| Step | Calculation | Result |
|---|---|---|
| Units per year | 1,250 × 0.75 | 938 units |
| Electricity per year | 938 × ₹7.50 | ₹7,035 |
| Running cost per year | ₹7,035 + ₹500 | ₹7,535 |
| 5-year running cost | × 5 | ₹37,675 |
| Purchase + installation | ₹31,500 | |
| Reinstallation at a new flat after 3 years | ₹1,500 | |
| 5-year total | ₹70,675 |
For a tenant who may move, a window AC avoids repeated copper pipe and outdoor stand costs, but costs more each year to run.
Example 3: 25-litre storage geyser, family of four
Assumptions (illustrative): price ₹9,000; installation and fittings ₹1,200; each bath uses about 20 litres heated from 15°C to 45°C; 4 baths a day for 120 winter days; ₹7.50 per unit; standing loss about 0.6 units a day if left on for most of the day.
| Step | Calculation | Result |
|---|---|---|
| Energy per bath | 20 L × 30°C × 1.163 Wh | 0.70 units |
| Heating per season | 0.70 × 4 × 120 | 336 units |
| Standing loss per season | 0.6 × 120 | 72 units |
| Electricity per season | 408 × ₹7.50 | ₹3,060 |
| 8-year electricity | × 8 | ₹24,480 |
| Purchase + installation | ₹10,200 | |
| Anode or element replacement once (illustrative) | ₹1,500 | |
| 8-year total | ₹36,180 |
Switching the geyser on only 30 minutes before use cuts the standing loss line sharply.
Example 4: heat-pump water heater instead of the geyser
Same hot-water need as Example 3, using a heat pump with an assumed average COP of 3 in winter.
| Step | Calculation | Result |
|---|---|---|
| Heating units | 336 ÷ 3 | 112 units |
| Tank standing loss (better insulated, illustrative) | 0.3 × 120 | 36 units |
| Electricity per season | 148 × ₹7.50 | ₹1,110 |
| 8-year electricity | × 8 | ₹8,880 |
| Purchase + installation (illustrative) | ₹65,000 | |
| 8-year total | ₹73,880 |
For one family's winter-only use, the heat pump costs more over eight years in this example. With year-round use for a larger household or guest house, the result can reverse. See the heat pump payback guide.
What changes the answer most
| Change | Effect |
|---|---|
| Double the hours of AC use | Electricity line doubles; efficient models pay back faster |
| Your top slab rate rises from ₹6 to ₹9 | Running cost rises 50% |
| Set the AC at 26°C instead of 22°C | Fewer units; BEE campaigns cite about 6% per degree |
| Outdoor unit in a hot, closed space | More units and shorter compressor life |
| Skipping coil cleaning | Gradual loss of efficiency |
FAQ
Should I include the electricity cost when comparing two ACs?
Yes. For daily-use rooms it is often the largest cost. Use the electricity bill estimator for each model.
How long does an AC last?
It varies with use, installation, climate and maintenance. Use a horizon you consider realistic, and check the compressor warranty period.
Do I need to include GST on servicing?
If the service provider is GST-registered, yes, 18% on the service is usually added.
Sources
- Bureau of Energy Efficiency — label annual units and campaign advice on settings
- Your State Electricity Regulatory Commission and DISCOM — current tariff order and slabs
- GST Council — GST rates on appliances and services
