My first summer running central air, I set the thermostat to 72 during the day and 68 at night. My electric bill that July was $310. I live in a 1,200-square-foot house.

The next summer I learned how AC actually works — not just what temperature to set, but why certain settings save money. Here is what cut my bill nearly in half.

The Physics of Air Conditioning

Your AC does not “make cold” — it moves heat out of your house. The compressor is the part that uses most of the electricity. The harder the compressor has to work to move heat, the more power it draws.

The key number is the temperature difference between inside and outside. When it is 95°F outside and you want 68°F inside, that is a 27-degree gap. Your compressor runs almost constantly. When you set it to 78°F, the gap shrinks to 17 degrees and the compressor runs far less.

Every degree you raise the thermostat above 72 saves roughly 3% on cooling costs. Going from 72 to 78 saves about 18%.

The Strategy That Works

When you are home and awake, set it as high as you can comfortably tolerate. The Department of Energy recommends 78°F. I find 78 uncomfortable when I am moving around, so I compromise at 76.

When you are away or asleep, raise it significantly — 82-85°F. A programmable thermostat handles this automatically. The idea that it takes more energy to cool the house back down than to maintain temperature all day is a myth. The energy you save during the hours the system is off far exceeds the energy used to cool back down.

Fans Make a Real Difference

A ceiling fan makes a room feel 4-5 degrees cooler through wind chill on your skin. It does not lower the actual temperature — so turn it off when you leave the room. Running a fan in an empty room wastes electricity for zero benefit.

Combined with a higher thermostat setting, fans let you stay comfortable while your AC runs less. I run the ceiling fan in whichever room I am in and keep the thermostat at 78 when I am home. The fan costs pennies per hour to run compared to dollars for the AC compressor.