In this study, we designed and developed an air conditioner with a heat recovery function and examined its energy-saving benefits. The heat recovery mode of the conversion air conditioner was first examined. The heat generated by the designed conversion air conditioner system was transferred into a preheating tank through a copper pipe to heat the water in the preheating tank. The operating power of the electric water heater and heat pump was reduced by recovering waste heat. The water temperature was monitored by placing several temperature sensors on the system. The optimal length for the copper pipe was calculated in an experiment. Copper pipes were configured into a one-to-one or one-to-many mode in accordance with the number of air conditioners on the consumer end. According to the experimental results, about 99% of the power consumption could be saved when the electric water heater was set at 45 ℃. As calculated using the commercial electricity rate of Taiwan Power Company, the cost of the heat recovery equipment can be recovered in about two years. The designed air conditioner with the heat recovery function helps achieve energy saving, cost cutting, and environmental protection goals.