To understand an inverter, it is perhaps easier to first understand the "traditional" air conditioning unit. All aircon units use a compressor (think of it as the engine). A traditional unit uses an "on/off" compressor, which runs at one speed until the desired temperature is achieved, when it then switches off. As the temperature then increases, the compressor switches back on to cool the room again. An inverter uses a variable speed compressor which speeds up and down to maintain the temperature. The principle behind the idea, is it takes far less energy to maintain a temperature, than to be constantly achieving it. Many manufacturers quote saving of over 40% for inverters over traditional models!