Calculating ROI for Commercial Air Conditioning

With hotter summers around the world, the role of HVAC (heating, ventilation, and air conditioning) units for business functions is becoming increasingly important. These systems provide a way to control temperature in vast spaces, bringing a wide range of benefits to all manner of industries. An upgrade to your commercial air conditioning units can improve your energy efficiency, too, and create long-term savings for your business. 

To make the smartest decision for your finances, it’s important to look at the return on investment (ROI) of a new system. Our HVAC experts have weighed in, pulling together everything you need to know. 

The Importance of ROI in Commercial Air Conditioning

ROI refers to the savings or profits you’ll earn after your initial investment. In the HVAC industry, we generally look at cost savings after installing optimised commercial air conditioning or replacing parts of an existing system. 

Calculated as a percentage, your ROI gives valuable insights into whether a new system is worthwhile for your business. It’s also a smart way to match your budget to a commercial air conditioning unit. The most important benefits of HVAC ROI include: 

• Showing which models will give the best returns. 
• Providing an estimation of how long it will take to earn your initial investment back. 
• Highlighting whether a replacement or a repair is better for your finances. 
• Making decision-making easier. 

The higher your ROI percentage, the better investment you’re making. A high ROI can indicate better energy efficiency, too, which is a must for businesses looking to become more sustainable when choosing commercial air conditioning. 

Can You Work Out the ROI of Air Conditioning?

Working out the exact ROI of commercial air conditioning is tricky. 

As our fan supplier, Ziehl, notes on the subject “We wouldn’t like to give a date/figure [for ROI] as each unit and environment is different”. 

Our air conditioning engineers agree, and we’d never give an overall ROI as it’s entirely dependent on your sector and individual circumstances. 

Having said that, there are ways that you can get closer to the ROI of your individual HVAC system. 

How to Calculate the ROI of Commercial Air Conditioning

Calculating the ROI of commercial air conditioning revolves around data collection. You’ll need to know: 

• Current HVAC energy consumption. 
• Efficiency improvements of the new system. 
• All costs involved when installing. 

Let’s take a closer look at each of these to gain more understanding. 

Current HVAC Energy Consumption

Your energy savings are key to working out your ROI. But, to know how much you’ll save, you first need to know your current HVAC energy consumption. 

Manufacturers will include details of kilowatt-hour (KwH) energy usage of commercial air conditioning. However, it’s important to note that older systems will often be less energy-efficient, so the initial ratings may have significantly increased. 

Your needs will also play a part in current energy consumption. Take a look at your utility bills to gauge how much your commercial air conditioning is costing you across different premises. 

All Costs Involved

When working out ROI, you need to factor in all commercial air conditioning costs. This includes the upfront unit cost, as well as air conditioning installation cost, maintenance and repair costs, and the expense of any permits you’ll need to install the system. 

Commercial Air Conditioning Efficiency Improvements

Your next step is to compare existing energy efficiency to the ratings on newer models. You can contact the manufacturer of the commercial air conditioning units you’re looking at to learn more. 

At Weatherite, we’re always happy to chat more about your air conditioning options, including air conditioning unit cost and different efficiency options. 

Once you know how much more efficient your new HVAC system is, you can work out your energy savings. This is a simple calculation of subtracting your new energy use from your previous energy use. So, if you were previously spending £7,000 annually on commercial air conditioning and your new systems will only cost you £6,000 to run, your annual energy saving is £1,000.  

Examples of Calculating Commercial Air Conditioning ROI

After recording all the information you need - from air conditioning installation cost to expected lifespan - you’re ready to calculate your ROI. 

Working out your ROI is fairly simple. To begin with, you need to calculate your yearly energy savings compared to your existing system to create a value in pounds (or your preferred currency) as mentioned earlier. You’ll then follow the formula: 

• ROI = (annual energy savings / cost of investment) / cost of investment) x 100 

For the initial few years, you’ll be in a negative ROI. But, as you compound annual energy savings, the ROI will turn positive, marking your payback period.  

How Long Does Commercial AC Last?

A major factor of ROI is looking at cost savings over time. But how long will your commercial air conditioning system last? 

In general, you can expect around 10-25 years of running time, though this will vary depending on a number of factors, including the model you have, how much you use it, and how well it’s maintained. 

So, if your ROI won’t see a payback until 30 years down the road, you know that it’s unlikely you’ll see a return on your initial investment. If your ROI sees payback within 5 years, you’re making a smart long-term business decision. 

Which Type of AC is Best for Commercial Use?

Our commercial air conditioning experts recommend the three main types of commercial AC: 

• Central  
• Multi-split 
• Variable Refrigerant Flow (VRF) 

To maximise your HVAC ROI, though, it’s best to speak to our experts about your individual needs. We can balance your energy use and budget with high-level efficiency, matching you to the right air conditioning unit for your business. 

Speak to Our Team

When you’re looking to upgrade your commercial air conditioning for improved efficiency, our air conditioning engineers will be happy to help. We’re the leading manufacturer of HVAC equipment in the UK, providing businesses around the world with the right solutions for their needs. 

To learn more, get in touch with our team today. You can also start exploring your options by heading over to Our Products page where you’ll find our full range of commercial air conditioning systems.