SEER stands for Seasonal Energy Efficiency Ratio. It relates to how much energy an air conditioning system will use in operation over the course of one year. The SEER numbering system allows homeowners to compare systems and understand at a glance which system is more efficient. As the number increases, the efficiency of the air conditioning system increases...similar to the mpg rating of automobiles. The number is determined by a testing institute known as AHRI.
Yes, the advanced technology that goes into producing AC units with higher SEER ratings also increases their cost. Often, the higher SEER equipment also has more features and benefits including safety devices to protect the equipment.
The rating system started in 1992. The highest SEER equipment produced in the United States at that time was a 10. Most older ac systems purchased 10, 20, 30 years ago were rated around 10,11, or 12 SEER when they were new. Using an old air conditioning system for decades will erode those numbers yielding a functional seer that may actually be closer to 8 or 9 today.