SEER stands for Seasonal Energy Efficiency Ratio and was defined by the Air Conditioning, Heating, and Refrigeration Institute. The SEER rating of a unit is the cooling output of the system during a typical cooling season divided by the total electric energy used in that same period. In the United States, we measure cooling by British thermal units or BTU's.
So you may be asking why you need to know about SEER ratings. This biggest thing that a homeowner needs to take away from this is that the higher the SEER rating, the more efficient the unit is. Let's compare a 13 SEER and 16 SEER 2 ton air conditioning units. By dividing the BTU's per hour by the SEER rating we can get the Watts per hour used by each unit.
13 SEER: 24,000 BTU's per Hour / 13 = 1,846 Watts per Hour
16 SEER: 24,000 BTU's per Hour / 16 = 1,500 Watts per Hour
Now that we have our Watts per hour, we can calculate our costs per hour by multiplying our Watts per hour by our electricity cost. Let's assume that our electricity costs 20 cents per kilowatt hour.
13 SEER: 1.846 kW x 20 cents per kw = 36.92 cents per hour
16 SEER: 1.500 kW x 20 cents per kw = 30 cents per hour
We now have the operating cost per hour, but let us compare the yearly usage savings between the two units. Lets assume that the air conditioner will run 4 hours a day for 125 days a year. We can then figure out that the unit will run for 500 hours a year and can then multiply that by the cost per hour to operate the unit.
4 hours a day x 125 days a year = 500 hours
13 SEER: 500 hours x 36.92 cents per hour = $184.60 per year
16 SEER: 500 hours x 30 cents per hour = $150.00 per year
So in this scenario, the 16 SEER unit would save the homeowner roughly $34.60 a year on the electric bill. That might not sound like much, but when you factor in the savings for 15 years, that $34.60 per year ends turns into $519 of savings and would cover the increased price of the more efficient system.