NSW Climate and Energy Action

Reverse-cycle air conditioners

Family using air conditioning
 

Stay comfortable and save money all year round with an efficient reverse-cycle air conditioner. These systems can cool and heat your home using much less energy than older models or separate heating appliances.  

How it works

A reverse-cycle air conditioner is an all-in-one heating and cooling solution. In summer it works like a regular air conditioner, moving heat from inside your home to outside. In winter, it reverses this process, pulling in warmth from outside (even when it’s cold) to heat your home. 

There are 2 main types:

  1. Split systems which have one indoor unit and one outdoor unit. These are good for heating and cooling individual rooms.
  2. Ducted systems which use a central unit to control the temperature of the building. These are good for heating and cooling a whole home or business.  

Who it’s best for

This is a great upgrade for your home or small business if you want year-round comfort with cheaper running costs and reduced carbon emissions.

Consider an upgrade to an efficient air conditioner if you:

  • are replacing an old, inefficient air conditioner or heater
  • want one system for heating and cooling
  • are looking to control the temperature in specific rooms (single split) or the whole house (ducted).

If you’re a renter, ask your landlord about upgrading to an energy efficient air conditioner. Learn how to ask your landlord.

How much you can save

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$200–$600

per year on your energy bills compared to an old system.

How much it will cost

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$1,500–$10,000+

Costs range from $1,500 for a single-split system to over $10,000 for a fully ducted system.


Get started

  1. Choose your air conditioner

    • Choose an installer by reading reviews and asking friends and family for recommendations.
    • Get multiple quotes from licensed and accredited installers.
    • Select the right size (kW capacity) for your room or home. Your installer can help you choose.
    • Choose features like a thermostat, timer, and eco or fan-only modes to control your comfort and save even more.
    • Check running costs with the Energy Rating calculator.
    • Look for at least 3 stars on the Energy Rating Label. Each extra star will save you hundreds.
    • If two air conditioners have the same star rating and capacity, pick the one with lowest annual energy use in kWh which will be the cheapest to run.
  2. Install your air conditioner

    • Use licensed air conditioning and refrigeration technicians for installations to ensure safety, compliance and warranty coverage.
    • Work with your installer to find the best spot for the indoor and outdoor units.
    • After installation, your installer will:
      • have you sign a declaration confirming the installation meets requirements
      • take photos as proof of the completed work.
    • Recycle your old unit. Ask your retailer or find local drop-off and pick-up points at recycling near you.
  3. Get the most out of your new air conditioner

    • Set your thermostat to 24−26°C in summer and 18−20°C in winter. Every degree higher in summer and lower in winter can cut your heating and cooling costs by 10%.
    • Close doors to unused rooms to heat or cool only the spaces you need.
    • Clean the filters every few months to maintain airflow and efficiency.
    • Use ceiling fans and window shading as well as your air conditioning to stay cool in summer and warm in winter.

How to get financial help

NSW Government's Air Conditioner Energy Saving incentive

Get a discount from the NSW Government to lower the cost of installing a new energy-efficient air conditioner or replacing your old one with a more efficient model. 

  • Who it's for: NSW homeowners and businesses installing a new unit or replacing an old one with a more efficient model.
  • How it works: Get an upfront discount on the quote for the installation. This could be:
    • up to $550 if you install a new 6kW air conditioner system
    • up to $560 if you replace an old air conditioner with a 6kW split system.
  • How to get it: Get multiple quotes, decide which system works best for you, complete the required paperwork from your installer and access the incentive at the time of installation from your provider.

Australian Government's Home Energy Upgrades Fund (HEUF) covers out-of-pocket costs with low-interest green loans from participating banks and lenders.

Other energy efficiency upgrades we recommend