INVERTER AC SAVINGS

Should lessors upgrade to an inverter AC for rental properties?

Upgrading to an inverter air conditioner can lead to significant savings, but is it a worthwhile investment for rental properties? Let’s analyze an actual case study.

Case Study Details:

Unit Type: Studio

Old AC: 1.5 HP non-inverter Carrier

New AC: 1.5 HP inverter Carrier

Replacement Cost: Php76,000 (including restoration expenses)

Data Collected: One year of electricity consumption (to remove or reduce seasonality effects in time series data) and utility charges before and after the AC replacement

Comparison of Electricity Consumption & Costs:

Before (Non-Inverter) - average 515 kWh - Php2,881.33/mo.

After (Inverter) 250 kWh - Php1,379.11/mo.

Monthly Savings: Php1,502.21 (or 52%)

Payback Period: Approximately 4.22 years per 1.5 HP AC unit

Should lessors upgrade knowing the payback period is 4 years?

Air conditioning is one of the most common concerns in rental properties—including some that were just turned over after the pandemic.

AC problems arise due to various factors: factory defects, underpowered units, lack of maintenance, or simply reaching the end of their lifespan. While manufacturers like Carrier claim that high-efficiency inverter ACs can last 15 to 20 years, non-inverter models typically have a shorter lifespan of 10 to 15 years.

For landlords, replacing outdated ACs (15+ years old) can improve tenant satisfaction, leading to fewer turnovers, lower vacancy rates, and better profitability.

Advice for Tenants

Since tenants bear the electricity costs, they benefit the most from an inverter AC’s energy efficiency. When choosing a rental, opting for a unit with an inverter AC can lead to substantial savings on utility bills over time. The savings shown above apply to a studio unit with just one AC. Now, imagine the potential savings for a larger unit with three or more ACs—it could be significantly higher!