Chilled Water System vs Traditional Air Conditioning: Which One Is Better for Large Spaces?

When deciding between a chilled water system and a traditional air conditioning system, consider your space, budget, and efficiency needs. 

From a general perspective, chilled water systems are more suitable for large spaces, as their centralized nature simplifies maintenance, improves energy efficiency, and offers zoning flexibility. However, the cheaper upfront cost appeal of traditional AC units remains strong. 

Which is better for you? In this article, you will learn about both systems for large spaces, comparing factors such as energy use, upfront costs, maintenance, efficiency, and lifespan. 

Chilled Water System vs Traditional AC: Quick Comparison

Here’s how both systems compare in a nutshell. 

From the comparison table above, a chilled water system is suitable for extensive, permanent facilities where efficiency and lifespan are key considerations. 

On the other hand, traditional AC is suitable for smaller or budget-driven projects that require lower upfront costs. Meanwhile, how each system works will also matter in your decision-making.

How Chilled Water Systems Work

Instead of using refrigerant directly at each air unit like traditional AC, a chilled water system produces cold water centrally and distributes it throughout the building.

At the core is the chiller, located in a mechanical room or plant. The chiller cools water to about 42–45°F. This cold water is pumped through insulated pipes to air handling units (AHUs) or fan coil units spread across different zones. 

Warm indoor air passes over a coil filled with the chilled water; heat transfers into the water, cooling the air before it’s supplied back into space. 

The now-warmed water (around 55–60°F) returns to the chiller to be cooled again, creating a continuous loop.

In many systems, a cooling tower is used with a water-cooled chiller. The tower rejects heat from the condenser side of the chiller into the atmosphere, which is why you often see them on the rooftops of big facilities.

A chilled water system is the backbone of cooling in many large buildings (think airports, malls, hospitals, universities, or skyscrapers). 

Pros

• Very efficient at scale

• Handles huge loads

• Longer lifespan

• Flexible zoning.

Cons

• High upfront cost

• Requires mechanical space

• Complex maintenance.

How Traditional Air Conditioning Works (Refrigerant-based)

A traditional AC system (often called a DX, split, or packaged unit) is the most common form of cooling for small to medium-sized spaces. Still, it’s also used in some large commercial facilities where chilled water would be overkill. 

Instead of producing chilled water, these systems use refrigerant directly to absorb heat from indoor air and reject it outside.

An outdoor condenser unit houses the compressor and condenser coil. Refrigerant circulates between this outdoor unit and the indoor evaporator coil located in an air handler or rooftop packaged unit. 

Warm indoor air is blown across the evaporator coil; the refrigerant inside absorbs the heat, cooling the air before it’s supplied back into space. 

The refrigerant then flows outside, where the condenser coil and fans dump the absorbed heat into the atmosphere. For larger spaces, multiple packaged rooftop units are installed, each serving a section of the building. 

For example: A big-box retail store may use 10–20 rooftop units, each cooling a zone. This makes installation simple but can reduce efficiency compared to a single centralized chilled water plant. 

Pros

• Lower upfront cost

• Simple installation

• Widely available parts

• Straightforward maintenance.

Cons  

• Less efficient for very large spaces

• Shorter lifespan (10–15 years)

• Many units mean higher long-term servicing costs

• Limited scalability.

How To Decide: Side-by-side Comparison

It’s essential to define what your ‘large space’ is before selecting the best commercial cooling system for you. Ultimately, you don’t want to go for an overkill, and you also want an option efficient enough. 

So, running through these factors will help you make a more informed decision: 

1. Cost Analysis: Initial Setup vs Operating Expenses

The cost dynamics between the two are very different. A chilled water system carries a steep upfront cost: you’re investing in chillers, pumps, cooling towers, piping networks, and air handling units. 

For example: A 500-ton chiller plant for a hospital can cost 3–4 times more to install than multiple packaged rooftop DX units of the same capacity. 

However, once in operation, chilled water systems prove to be more economical over time. 

Water transfers heat more efficiently than refrigerant coils in multiple DX units, leading to reduced energy consumption per ton of cooling, especially at scale. In contrast, commercial AC units are initially (and relatively) cheaper to install.

2. Installation and Maintenance Needs

When it comes to installation and maintenance, chilled water systems and traditional AC differ just as much as in cost. 

CHILLED WATER SYSTEM

Installing a chilled water system is a major construction project, requiring:

• Laying of insulated piping throughout the building

• Erection of a central chiller plant

• Installation of cooling towers, pumps, and large air handling units.

For instance, in a commercial high-rise, just the piping distribution can take weeks and requires precise balancing for even cooling.

On the maintenance side, chilled water systems demand specialized technicians. Chillers need periodic tube cleaning, water treatment to prevent scaling and biological growth, and regular monitoring of pumps and towers. 

However, the maintenance is centralized, meaning you’re servicing one plant rather than dozens of scattered units.

TRADITIONAL AC SYSTEMS

Traditional AC (DX systems), on the other hand, are much simpler to install. Rooftop packaged units or split systems can be installed in a matter of days with minimal disruption. 

Maintenance, though, can be cumbersome in large facilities since every individual unit has compressors, fans, and filters that need servicing. 

For example: A shopping mall with 30 rooftop DX units will require more frequent filter changes and compressor checks compared to a single chiller plant, even if each unit is simpler to maintain. Over time, this decentralized upkeep can become more labor-intensive and less efficient.

3. Energy Efficiency and Environmental Impact

Energy efficiency and environmental impact are where chilled water systems generally outclass traditional AC, especially in large-scale applications.

Modern centrifugal chillers can achieve efficiencies of 0.55 kW/ton or better, compared to packaged DX units, which often operate at around 1.2–1.5 kW/ton. 

In real terms, if you’re cooling a 1,000-ton office tower, the chilled water system might consume 550 kW under full load, whereas an equivalent DX setup could push closer to 1,200 kW.

That gap translates directly to utility savings and reduced strain on the building’s electrical infrastructure. 

From an environmental perspective, chilled water systems also allow for integration with free cooling (using low outdoor air temperatures to reduce chiller load), thermal storage, and even district cooling, all of which lower greenhouse gas emissions.

4. Noise Levels and Indoor Environment Quality

Noise and indoor environment quality are often overlooked when comparing chilled water systems to traditional AC, but they have a huge impact on occupant comfort.

For example, in hospitals or libraries where low noise is critical, a chilled water system can maintain sound levels below 45 dB, which is comparable to a quiet office. 

Traditional AC systems, especially rooftop packaged units or split units, generate more noticeable noise. 

Compressors and condenser fans are often located closer to occupied areas, and even when roof-mounted, their vibration and fan noise can still transmit into the building. 

For clarity, this doesn’t mean traditional AC units are a terrible choice. 

• For smaller commercial spaces, such as retail shops, restaurants, or a medium-sized office floor, the noise from rooftop units or split systems is often acceptable and may even go unnoticed due to background activity. 

• In fact, many modern DX systems are designed with quieter scroll or inverter-driven compressors and improved fan blade designs to reduce noise compared to older models. 

• The real issue comes when you scale up.

5. Industry Use Cases: Office Buildings, Data Centers, Hotels 

In high-rise office buildings, chilled water is almost always the standard because it delivers stable cooling over hundreds of thousands of square feet, thanks to centralized control. This is essential for multi-tenant towers where energy efficiency and reliability drive operating costs.

Let’s now really contextualize various large spaces: 

• Hotels: Hotels also tend to opt for chilled water, particularly at four- and five-star properties, as centralized plants enable quiet guestrooms, consistent comfort throughout ballrooms, restaurants, and spas, and the integration of energy recovery systems.

• Hospitals: Hospitals follow the same path, as patient comfort and air quality demand tight humidity and temperature control that chilled water systems provide.

Traditional DX systems still have their place in mid-sized retail stores, gyms, quick-service restaurants, and schools, where space is limited, budgets are tight, and the load profile is less demanding. 

For instance, a 2,000-seat cinema might go AC for speed of installation and lower upfront costs, but a 50,000-seat stadium would require the scale and resilience of chilled water.

Chilled Water System vs Traditional AC: Your Decision Checklist

You can use these questions to guide your final decision-making: 

Building Size and Cooling Load

• Is your building over 50,000 sq. ft. or has it been divided into diverse zones (e.g., mall, hospital, university, high-rise)? Lean chilled water.

• Smaller footprint or single-zone large hall? Traditional AC might be enough.

Future Growth and Flexibility

• Do you expect expansions, added wings, or future load increases? Chilled water scales more easily.

• Fixed size, no major changes expected? Traditional AC is simpler.

Energy Costs and Operating Hours

• Will the building run cooling 10–12 hours daily, year-round? Chilled water gives better efficiency long-term.

• Sporadic or seasonal cooling (event center, school)? Traditional AC may be more economical.

Your upfront Capital Budget

• Can you handle high initial costs? Chilled water.

• Limited budget, need faster payback? Traditional AC.

Maintenance and Staffing

• Do you have (or can you contract) skilled HVAC techs for chiller plants, pumps, and towers? Chilled water.

• Want a simple service with widely available parts? Traditional AC.

Space Availability

• Is there enough space for mechanical rooms, a cooling tower, and piping routes? Chilled water fits.

• Tight space, rooftop-friendly install preferred? Traditional AC is easier.

Now That You Know… 

When making a major investment in cooling for a large space, you want more than just equipment. You want quality, reliability, and convenience. That’s where we stand out at HVAC Store. 

We offer a wide range of high-quality systems, from rooftop packaged cooling systems to split AC units. Our collection focuses exclusively on cooling applications for offices, retail centers, and industrial buildings, many of which are available with free shipping.