Here’s a quick schematic diagram of a central air conditioner system.  There’s the outside unit, known as the condensing unit.  There’s everything inside the house, consisting mostly of the evaporator coil, a metering device, and of course the blower fan that blows the cold air through the ducts and into the rooms.

And of course there are two refrigerant lines running between these two parts.

As shown in the diagram by the red color, the liquid line is warm because it’s just been compressed.  When a gas is compressed it becomes hotter.  Then the fan at the condensing unit outside blows over the condenser and tries to blow that heat out into the open air.  But the liquid line is still warm.  We don’t want to or need to insulate this line because we want that heat to be lost to the atmosphere.

The suction line is cold, because that refrigerant has just gone through the evaporator coil and expanded, making it cold.  When a gas expands it cools down.  We want to insulate this line because we don’t want to lose that cold temperature.  We’ve just paid a lot of money to make that line cold and we don’t want to lose that.  So we insulate this suction line.  Over time that insulation will degrade and start to fall off, and if this happens it should be replaced.  Missing insulation means that we’ll lose that cold to the outside air and that’s a waste – it robs the system of efficiency.

The insulation inside the house should also be insulated, partly for efficiency but largely to stop condensation from forming on the cold pipe and dripping down and causing damage.

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